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Food prices

Great value dairy products

Food prices have risen sharply over the past year, and dairy products have not been immune to this trend.

In general, the increases are due to global trends. For dairy, production growth has not kept up with demand growth, as consumers in developing countries want to eat more dairy.

Costs on farms and in factories have also risen, due to the well documented increase in inputs like feed and fertiliser, labour, energy and plastic resin. These cost rises are filtering through to the supermarket shelf.

In the context of the past 50 years, however, dairy products remain great value. Prices have emerged from a decade of deflation in real terms. Consumers recognise that foods like cheese and milk provide important nutritional benefits, as well as being a tasty part of a balanced diet. As a result, volume sales of dairy products are relatively resilient to price increases.

The UK's dairy supply chain is one of the leanest and most efficient in the world. Future consolidation and investment will make it more efficient still, helping to minimise production costs.

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