Grocery prices are continuing to increase well ahead of general inflation, with a rate of 5.3% recorded for the 12 weeks to 15 June.
This has been the trend in 2025 and high grocery price inflation isn’t confined to Ireland.
In the UK, Kantar reports that grocery price inflation for the four weeks to 15 June was 4.7%, its highest level since February 2024 and up from 4.1% in May.
Unsurprisingly, higher beef, sheepmeat and dairy prices are contributors to the increase in food price inflation. This can cause heated debate between those who understand and appreciate farmgate prices and those who expect food prices to either stay the same or increase gently if they must.
Food as share of household budget
The reality, of course, is that food has never been so relatively cheap in developed countries.
In 2024, United States department of agriculture (USDA) data shows that US consumers spent just 10.6% of their disposable income on food, which was down from 10.8% the previous year.
This compares with 15% in the mid 1960s and what is even more striking is that in the past 10 years, US consumers now eat more food outside the home than inside.
The split in 2024 is 5% of food was purchased for in-home consumption while 5.6% was consumed outside the home. Looking back to the mid 1960s, the split was almost 12% consumed in the home and just over 3% outside.
Irish household expenditure
Irish data published by the Central Statistics Office (CSO) has different numbers, but trends are the same.
Here, the expenditure on food as a share of the household budget has increased to 16% in 2022/23, having fallen as low as 14.7% in 2015/16. This was half what it was in 1980, when almost 28% of household budgets were spent on food.
The difference between Irish and US share of spending on food reflects the fact that the US has tended to be ahead of Ireland in money expenditure trends.
Also, there isn’t a standard global definition of what is included as food in household budgets and this would also contribute to a difference in US and Irish food expenditure share of household budgets.
What is important to note is the fact that over recent decades, food has become relatively cheap compared with other household expenditure.
Recent increases
No doubt current inflationary food prices are in part caused by higher prices being paid for agricultural produce. However, it is important to recognise that these increases aren’t all profit for farmers, as rising production costs on farm have swallowed up a large share of the higher prices.
The recently published Teagasc farm survey data shows that for most sectors of Irish agriculture, many farmers would struggle to reach the minimum wage payment for the time they spend farming.
All direct costs in farming have increased significantly, especially this decade following the global pandemic and Russia invading Ukraine.
There is also an important issue for Irish and EU farmers that doesn’t apply globally. That is that EU legislation demands that livestock cannot be fed growth-promoting hormones, unlike elsewhere in the world.
This means that European productivity lags considerably behind other countries, the cost of which is picked up by farmers.
The cost of meat and dairy products may have increased, but, in a historical context, they have never been more affordable.
Read more
Good news on incomes hides structural issues in Irish farming
Grocery inflation tops 5% as prices continue to rise
High grocery inflation changing consumer behaviour
Grocery prices are continuing to increase well ahead of general inflation, with a rate of 5.3% recorded for the 12 weeks to 15 June.
This has been the trend in 2025 and high grocery price inflation isn’t confined to Ireland.
In the UK, Kantar reports that grocery price inflation for the four weeks to 15 June was 4.7%, its highest level since February 2024 and up from 4.1% in May.
Unsurprisingly, higher beef, sheepmeat and dairy prices are contributors to the increase in food price inflation. This can cause heated debate between those who understand and appreciate farmgate prices and those who expect food prices to either stay the same or increase gently if they must.
Food as share of household budget
The reality, of course, is that food has never been so relatively cheap in developed countries.
In 2024, United States department of agriculture (USDA) data shows that US consumers spent just 10.6% of their disposable income on food, which was down from 10.8% the previous year.
This compares with 15% in the mid 1960s and what is even more striking is that in the past 10 years, US consumers now eat more food outside the home than inside.
The split in 2024 is 5% of food was purchased for in-home consumption while 5.6% was consumed outside the home. Looking back to the mid 1960s, the split was almost 12% consumed in the home and just over 3% outside.
Irish household expenditure
Irish data published by the Central Statistics Office (CSO) has different numbers, but trends are the same.
Here, the expenditure on food as a share of the household budget has increased to 16% in 2022/23, having fallen as low as 14.7% in 2015/16. This was half what it was in 1980, when almost 28% of household budgets were spent on food.
The difference between Irish and US share of spending on food reflects the fact that the US has tended to be ahead of Ireland in money expenditure trends.
Also, there isn’t a standard global definition of what is included as food in household budgets and this would also contribute to a difference in US and Irish food expenditure share of household budgets.
What is important to note is the fact that over recent decades, food has become relatively cheap compared with other household expenditure.
Recent increases
No doubt current inflationary food prices are in part caused by higher prices being paid for agricultural produce. However, it is important to recognise that these increases aren’t all profit for farmers, as rising production costs on farm have swallowed up a large share of the higher prices.
The recently published Teagasc farm survey data shows that for most sectors of Irish agriculture, many farmers would struggle to reach the minimum wage payment for the time they spend farming.
All direct costs in farming have increased significantly, especially this decade following the global pandemic and Russia invading Ukraine.
There is also an important issue for Irish and EU farmers that doesn’t apply globally. That is that EU legislation demands that livestock cannot be fed growth-promoting hormones, unlike elsewhere in the world.
This means that European productivity lags considerably behind other countries, the cost of which is picked up by farmers.
The cost of meat and dairy products may have increased, but, in a historical context, they have never been more affordable.
Read more
Good news on incomes hides structural issues in Irish farming
Grocery inflation tops 5% as prices continue to rise
High grocery inflation changing consumer behaviour
This is a subscriber-only article
SHARING OPTIONS: