The National Institute of Statistics has returned to quantify a reality many Spaniards feel every time they shop: living costs are rising, with a year-long climb near 13.8 percent. This pattern appears to repeat month after month, fueled by several factors and carrying an uncertain outlook for the months ahead.
The latest figures speak with clarity: most foods and soft drinks were about 13.8 percent more expensive in August than in the same month a year earlier. Milk, cheese and eggs, meat, bread, and cereals posted the sharpest increases, marking the highest annual rate since January 1994 and showing a 0.5 percent uptick from July 2022. [Source: National Institute of Statistics]
Several forces drive this surge. Rising production costs—electricity, water, grain, and diesel—along with weather-related disruptions and scarce raw materials due to drought, interact with broader international market imbalances spurred by the ongoing conflict in Ukraine.
Antonio Khalaf, the commercial director of IRI Retail consultancy, told Efe that predicting the duration of this rise is not feasible. He notes that energy costs remain a core driver and that shortages of essential inputs are closely linked to the war. [Source: IRI Retail, Efe]
“As long as energy costs keep climbing, companies will pass them along,” Khalaf observes, leaving little room for quick relief through cost-cutting or tax adjustments. The agri-food sector is vast, and even the most inflation-prone sub-sectors share this experience, though each sub-sector has its own particular dynamics.
Milk
Milk leads the annual gains with a 25.6 percent rise, a figure still smaller than the 38 percent paid to farmers for origin milk in the prior month, according to Luis Calabozo, executive director of the National Federation of Dairy Industries (Fenil), in July. [Source: Fenil]
Calabozo emphasizes that the cost of milk—the key raw material for dairy products—has risen further and, with some lag, will likely be reflected in consumer prices. This trend, he says, is unsustainable unless producers are compensated downstream.
Since production costs began climbing in 2021, primary producers faced tighter margins. In many cases, farmers culled older cows because meat production appeared more profitable, a pattern observed globally and one that further reduced supply and pushed prices higher. [Source: Fenil]
Liquid oil
Teresa Pérez, director of Olive Oil Interprofessional, notes that olive oil has risen by about 13.2 percent over the past year, driven by higher packaging and distribution fuel costs.
She adds that the spike was anticipated after two campaigns with unusually low prices. The forecast for the next campaign predicts another 13.2 percent increase, with production cost pressures still rippling through the raw material side, though the full impact is not yet fully understood. [Source: Olive Oil Interprofessional]
Eggs
Egg prices have climbed as input costs in animal feed surged up to 78 percent, according to the employers’ group Inprovo. Increases in energy, transport, packaging, and overall egg production and marketing costs have all fed into higher prices. The industry is also adjusting to a cageless system transition, which involves a shift from cage to floor-based housing and is estimated to raise production costs by about 18–20 percent.
Add to this a decline in EU egg imports, a Ukraine share that once accounted for half of total imports, rising exports, and the effects of avian flu that hit many laying hens. These factors tightened supply and contributed to market tension. [Source: Inprovo]
Grains
In response to the CPI increase in grains and derivatives, which jumped about 21.7 percent, José Manuel Álvarez, general secretary of Accoe, points to multiple drivers: reduced supply due to harsh weather, the Ukraine conflict, and disruptions in the U.S. market. Spain remains a net importer of wheat and barley, a stance that shapes prices as international forecasts anticipate lower harvests. [Source: Accoe]
The president of Accoe underscored ongoing market uncertainty, even as global forecasts anticipate a slowdown in harvests.
Chicken
Poultry has become more expensive, rising about 17.6 percent annually, according to Jordi Montfort, general secretary of Avianza, the Spanish Interprofessional Poultry Association. He cites high input costs in feed and energy as the main drivers. The current price increases, he argues, do not always cover production costs, posing concerns for producers.
Looking ahead, Montfort warns that the coming winter could keep energy problems front and center, with a real risk of supply shortages if costs remain elevated. [Source: Avianza]