Rising transport, packaging and ingredient costs, combined with soaring crop input prices for farmers have sent food prices into their biggest leap in 10 years.
Restockers and good seasonal conditions also continue to keep pressure on livestock markets and have subsequently kept meat prices high.
Consumers should be bracing for further food price rises in coming months, warns Rabobank, as the impacts of more transport costs, supply chain disruptions, fuel and fertiliser rises, and other increased input costs continue to make their way through the system.
Latest quarterly Consumer Price Index data from the Australian Bureau of Statistics showed food price inflation accelerated in the quarter to March to deliver the highest year-on-year rise since 2011.
Headline numbers for food were a 4.3 per cent increase year-on-year, or 2.8pc up on the final three months of 2021.
The biggest contributors to food's price rises were a 6.6pc lift in vegetable; juices and soft drinks, up 5.6pc; fruit up 4.9pc, and beef up 7.6pc.
Overall, grocery prices jumped 4pc.
"There is broad-based price inflation across the "food complex", with rises recorded across all major grocery food categories," said Rabobank senior analyst, Michael Harvey.
"There was also inflation in foodservice, but this was `softened' by meals eaten out and takeaway foods (up 0.7pc), which saw price rises partially offset by voucher schemes reducing out-of-pocket costs for consumers in some cities."
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Horticulture, which struggled with unusually wet conditions in some eastern Australian production areas, was a notable contributor to food inflation, but the higher cost of meat, seafood and dairy were also significant.
Mr Harvey said higher transport costs, supply chain disruptions and increased input costs were the main background causes for the price rises.
He said the impacts of flooding in NSW and Queensland had also affected supply chains, although the flooding disruption primarily only hurt food prices towards the end of the quarter.
Overall, consumer prices have risen by 5.1pc in the past 12 months - the fastest increase in nearly 20 years.
Soaring housing costs were a core contributor in the latest data, with building costs for new homes up 5.7pc, fuel prices up 11pc and tertiary education fees up 6.3pc.
New home cost rises were the result of a shortage of building materials and demand, plus rising labour costs, and the government's HomeBuilder subsidy being scaled down after buffering home renovators and builders from higher costs during 2021.
The ABS noted a record-high retail cost for unleaded petrol at $1.83 a litre during the March quarter, with fuel prices recording their seventh consecutive quarterly rise and their biggest annual increase since the first Iraq war began in 1990.
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Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
