Food security is set to crumble in light of potential hyper-inflation caused by the ongoing war in Ukraine, according to the boss of the UK’s largest poultry manufacturing company.
Ronald Kers, 2 Sisters Food Group CEO, said he believed hyper-inflation could be the highest since the 1970’s oil crisis with food inflation rocketing to 15% by the middle of this year.
The unfolding Ukrainian agricultural crisis could have massive repercussions for global commodity supply and Kers is urging cross-territorial collaboration to insulate states from future geo-political crises.
Commenting on the Ukrainian crisis, Kers spoke of an incredibly worrying time for colleagues and supply chain partners in the country: “This conflict brings a major threat to food security in the UK and there is no doubt the outcome of this is that consumers will suffer as a result. War disrupts the free flow of trade and the impacts for us are severe. For example, the input costs of producing chicken – with feed being the biggest component – have rocketed. Prices from the farm gate have already risen by almost 50% in a year.
“Before this war began, 4-5% food inflation was being forecast by mid-2022. But we could now see a hyper-inflationary environment at closer to 10-15% – more than it has been for 50 years – if this conflict isn’t resolved quickly.
“Our concern is that a lot of people haven’t realised the food production clock is ticking. Ukrainian farmers should be sowing crops in March, instead they are fighting for their country. If this war is not stopped now, the UK could experience a major drop in supply of products like wheat, barley, corn, rapeseed and sunflower oil. So, a European supply chain issue escalates to become a global commodity price crisis, and none of us can escape this.”
Kers added that the 2 Sisters traded globally, and the smooth flow of trade links was vital: “Without measures to isolate states from food security risks, ultimately there will be less food and higher prices to pay, with the poorest in society hit hardest.”
Poultry producers are also saying supermarket prices for poultry have to rise. Yorkshire poultry and pig producer, Matt Donald, said it was very worrying for his business where feed prices were going: “The consumer must pay more for a chicken than they do a cup of coffee.”
In its latest supply/demand report focusing on the Russia/Ukraine water, the US Department of Agriculture said wheat exports from the 2 nations are set to fall by 12%.