On 1 February and 1 July every quarter of a year, food prices in Norwegian groceries are adjusted. These are the dates when suppliers to the grocery store have the opportunity to change their prices. Because of this, the grocery trade is changing its prices again. Many of them will be seen in the store from Friday 1 July. Senior adviser at the Norwegian Institute for Bioeconomics (Nibio), Siri Voll Dombu, does not rule out that prices will be higher throughout the summer as well. Siri Voll Dombu. Photo: Nibio – We expect that there will be noticeably higher food prices because the suppliers have adjusted the prices. Whether we see the full effect at once is difficult to say. Food prices often go up significantly in July, and down again in August, she says. The last time prices changed, it was the biggest price jump on food in over 40 years. Behind these price adjustments are several factors that affect the price level. The agricultural settlement Every spring, the farmers negotiate their organizations with the politicians in what is called the agricultural settlement. Simply put, the agricultural settlement is the framework for how much a farmer can earn from being a farmer, whether he has livestock, grows food or other things. Farmers often mark themselves during the agricultural negotiations. Here from last year. Photo: Erlend Kinn / news In the settlement, the parties among other things agree on a target price, which is simply the maximum price the farmers can get for the goods. In Norway, the target price is for grain, milk, potatoes, apples and a few more vegetables. The target price was increased in the agricultural settlement this year. The target price is the maximum of what the farmers can charge for the food when they sell it on, but it is not certain that the farmer will get it. The farmer also has costs, for example fertilizer. Fertilizer prices have risen sharply, and this is one of the reasons why the agricultural settlement this year had a high limit. The grocery chains Ultimately, it is Kiwi, Rema or Meny that decide what price they will charge for a liter of milk or a packet of cocoa. Some goods they can earn a lot on, while others they can of course sell for less than the store has bought them for. The grocery industry has been blamed for collaborating on prices, something that led to them receiving billions in fines last year. Politicians and the Norwegian Competition Authority are trying to create a framework that, among other things, means that choirs far from each other’s stores will not lead to higher prices. And there are more players than politicians who influence what price the shops charge. Among other things, they must use electricity in the shops, and those who work there must be paid. The food industry The food you buy in the shop does not look quite the way it does when the farmer picks it up from the ground or out of the barn. In a city, someone has to wash the food, wrap it or mix several ingredients to make something. It may be obvious, but still: Before an animal can become dinner, someone must work with the body. Like here at Nortura in Førde. Photo: EMILY LOUISA MILLAN EIDE / news This industry, like the farmers and grocery chains, has to live with what different things cost while they wash, pack and make. – Large cost weeks in the value chain can explain price weeks, says Dombu at Nibio. And with that, we are close to the next point. Raw material costs We have been talking about the fertilizer the farmers use. In addition, both farmers, grocery chains and industry must live with what the electricity and fuel cost. The situation has made food more expensive throughout the EU. In fact, EU prices have risen more than prices in Norway since before the corona. – Food prices in the EU may be adjusted faster than in Norway, says Dombu. As is well known, both electricity and petrol have become quite much more expensive in recent times. And thus we are over to the last point, which is very much about a Russian surname of five letters. The war in Ukraine Although the food you buy often does not come from Ukraine, the war has a lot to say. For what the electricity costs, and for what the petrol costs. And for what the food costs. Ukraine is an important producer of, for example, sunflower oil, which is used to make, for example, Norwegian potato chips. And the international grain markets are nervously watching to see if Ukraine can export its grain. – The war and the energy crisis have led to a large price week internationally, and it has lasted for a while. But for example, it has not increased so much in Norway, says Dombu.
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