UK: Dairy inflation hits 14-year high

As milk production volumes hit a five-year low in July, dairy prices have been among the biggest contributors to Britain's double-digit food inflation rate. Food inflation has reached 12.8% year-on-year -the highest value recorded since August 2008- fueling a higher-than-expected general consumer price index (CPI) of 10.1%, the Office for National Statistics ( ONS) revealed. Dairy products have been hit particularly hard by inflation due to a combination of soaring production costs, stable demand and a long hot spell. According to detailed data published by the ONS, skimmed milk (34%) and whole milk (28.1%) had the highest annual price increase, closely followed by butter (27.1%), cheese (17.9 %), yogurt (14.2%) and ice cream (12.9%); other products, including soy milk, reached 10%. The farmgate price of milk is rising, but farmers are barely keeping pace with increasingly unpredictable input costs, the Agriculture and Horticulture Development Board (AHBD) said recently in its ...