Chicken will cost more because of Ukraine crisis, says minister warning of 8% food inflation

Soaring wheat costs will soon ‘feed through’ to the supermarket, says George Eustice

Cost of farmers’ chicken feed has soared (Getty Images/iStockphoto)

The price of chicken will soon spike at the supermarket because of the Russian invasion of Ukraine, environment secretary George Eustice has warned.

The minister also warned that Britons face food prices rises of up to 8 per cent this summer, as the chancellor Rishi Sunak comes under pressure to help families struggling with the mounting cost of living crisis.

Mr Eustice warned that the impact of global price rises in wheat – with Ukraine a major exporter around the world – would impact on living costs in the UK.

In a speech to the Food and Drink Federation, the minister said the rising costs of feed used by poultry farmers would have a particularly strong impact of the price of chicken at the supermarket.

“Speaking roughly, there are three or four very large poultry producers in this country,” the environment secretary said.

He added: “They have a situation where feed costs account for around half of their input costs, and they’re seeing a cost pressure of around 20 - 30 per cent. At some point, that’s got to feed through the system.”

Mr Eustice said officials had estimated that food and drink inflation could reach 6 per cent over the summer, but price rises could increase by as much as 8 per cent.

Experts have warned that the invasion of Ukraine could see the bulk of the country’s grain exports wiped out this year, leading to big price rises and adding to the financial pressure on British households.

Known as “Europe’s breadbasket”, the country was expected to account for 12 per cent of global wheat exports and nearly a fifth of global maize production this year, according to ING Bank and the US Department of Agriculture figures.

Last week Ronald Kers – chief executive of the 2 Sisters Food Group, one of the country’s biggest food producers – warned that food prices in the UK could soar 15 per cent by the middle of the year.

He warned of particularly acute spike in chicken production costs, set to be made worse by the Ukraine crisis. “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,” he said.

“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 per cent in a year,” Mr Kers added.

Mr Eustice also revealed on Tuesday that the government’s food resilience forum set up to deal with the Covid and Brexit crises was now meeting once a week.

It comes as opposition parties, business groups and consumer experts all called on Mr Sunak to step in with support with energy costs as he prepares for Wednesday’s spring statement.

Money Saving Expert founder Martin has told MPs that families are facing a “fiscal punch in the face” on 1 April with the imminent rise in the price of energy.

Mr Lewis stressed that the chancellor current package of measures aimed at taking the sting fuel bills, including a £200 rebate to be repaid, were “clearly not enough”.

Meanwhile, several business groups, representing both big and small firms, told MPs the government is listening to their concerns – but there has been very little action so far.

“We argue that, given the scale of the cost increases that businesses are facing, that it would be right for the chancellor to step in and provide something analogous to that support that was provided to households,” said Paul Wilson, policy director at the Federation of Small Businesses.

Mr Sunak is reportedly preparing to cut fuel duty by up to 5p per litre. However, a 5p-per-litre cut in fuel duty would fail to reverse even half of the increase in prices inflicted on motorists over the past fortnight, according to new figures.