Chicken, Dairy and Vegetable Prices Set to Rise Again as Another La Niña Forecast

This will have a ripple effect on dairy products in general. Prices for fridge staples such as butter, cheese, cream and ice cream have already risen, according to data from Frugl.

The price of margarine has risen the most, up 51 percent from August last year, while cooking oil and potato chips now cost 33 percent more than a year ago. Milk, peanut butter and feta are 14 percent more expensive than before, while butter is 12 percent more expensive, data from Frugl shows.

Dairy and food giant Bega Chief Executive Barry Irvin confirmed it was raising prices “across all channels” including milk, cheese, yoghurt, spreads and jam, juices and more.

The managing director of restaurant supplier United Foodservice, Ayman Zoghaib, expects dairy prices to rise 40 percent in the next 6 to 12 months.

“I’m sorry for the [food producer]they will have to be more conservative in how they make their products, they will probably downsize or drastically increase their prices.”

Bega is passing on higher costs to customers through its products.

Bega is passing on higher costs to customers through its products.

However, the chief economist for the National Farmers Federation, Ash Salardini, noted that milk prices were coming off a historically low base. Cooking oil prices would also remain high, he said.

“The [Russia-Ukraine] uncertainty is going to create risk and with risk, increased costs”, he said.

Another La Niña would create vegetable shortages, again

While the price of fresh produce, such as vegetables and fruits, has come down from recent spikes (KFC had to substitute lettuce for cabbage, while some Subways did without), the likelihood of another La Niña event The end of the year threatens to cause more shortages and supply chain disruptions along the East Coast.

Perishable foods would bear the brunt if La Niña caused flooding, as it did earlier this year.

“If it rains at the wrong time, if it rains just before and during the harvest, [there will be] issues around grains and legumes and things like that, so it’s going to have a pretty broad impact on plant-based products,” Salardini said.

Fresh produce such as lettuce and eggs would also be affected, said Flavio Macau, associate professor at Edith Cowan University, an expert on supply chains, as the floods would again cause delays in local supply chains.

“Those delays are usually what keep the shelves empty,” Macao said. Supermarket giants like Coles and Woolworths tend to work with fewer but larger suppliers, which means less protection when those supply chains are disrupted, he said.

Amid more frequent unusual extreme weather event warnings, shoppers should get in the habit of emptying supermarket shelves from time to time, Macau said.

“We can expect now that this year there could be a wildfire, next year there will be a flood, God knows when a hurricane or typhoon will come and hit the wrong place. [We’re] not prepare for the end of the world, but prepare for these interruptions to become more frequent…and learn to live with it.”

A greater shortage of fresh produce will also create a greater demand for frozen vegetables, a trend that Woolworths has observed.


“We’re seeing some customers switch from beef to more affordable protein sources and switch from fresh vegetables to more affordable frozen and canned offerings,” Woolworths boss Brad Banducci said on Thursday.

Another severe wave of COVID-19 would be “very difficult” to endure for Ingham’s, whose operations have yet to fully recover from January’s Omicron wave due to labor shortages. The poultry supplier was forced to cut some product lines and reduce manufacturing volumes amid COVID-related absenteeism, which also meant the ASX-listed company had to pay temporary higher wages.

Over the last two and a half years, food suppliers and retailers have been forced to get used to supply chain uncertainty.

“We have a record amount of stock, just to make sure we have consistency in the market and to make sure we have a supply for our customers,” Zoghaib said. “It’s costing a lot of money and putting a lot of pressure on cash flow right now.

“If you talk to me next week, there will be another new product that I won’t be able to get.”

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