Inflation at high levels hurts the most vulnerable families, taking a larger share of the monthly budget for basic products such as foods and energy. August CPI data shows annual food price increases averaging 13.8%, with milks up 25.6%, oils 24%, eggs 22.4%, cereals and derivatives 21.7%, and bread 15.2%. Chicken prices rose 17.6% and fish 9.9%, while baby food climbed 17.7% over the year.
Experts note that prices do not always reflect rising initial costs. This is acknowledged by Andoni García, head of Agricultural Markets at COAG, who says the trend is difficult to predict in the coming months. The view is shared by others in the food industry, including sectors for oils, milk, bread, and eggs. As production costs rise, there is concern about whether higher costs will reach supermarket shelves or be absorbed along the chain—manufacturers, processors, distributors, retailers, and consumers. The trajectory of energy and raw material prices will partly determine how resilient each link can be against future shifts.
Highest paid producers
Farmers and ranchers are not immune to price pressures. COAG data indicate average increases in producer costs around 40%, with fertilizers up to 150%, fuels up 90%, and animal feed up 38%. Producer wages rose about 34%. While not matching the cost rise, this gain is linked to the reform of the food chain law enacted in December 2021 to help producers cover their costs. Data from the Ministry of Agriculture confirm sharp price changes: milk paid to farmers rose 38.6% versus 2021, chicken meat 68%, lamb 10.28%, beef 31.9%, and pork 37%. Yet these broad gains come from specific sectors that struggle to keep up with input costs and face farm closures.
Olive oil: 13.2% increase
In this sector, the food chain law has pushed payments to farmers higher by about 40% even before the Ukraine war. Rafael Pico, director of Asoliva, cites a second driver: robust demand after the war’s onset and a sharp drop in sunflower oil supply, which pushed prices up by more than 71%. A third factor is the expectation of a smaller olive harvest due to drought, which could pressure prices further. Pico argues that despite a smaller harvest, price pressures should remain moderate because the market can still meet domestic and export needs, supported by sufficient reserves and production capacity.
Eggs: 22.4% increase
María de Mar Fernández Poza, director of Inprovo, highlights that higher poultry feed costs mostly drive the 22.4% rise in egg prices. The feed cost jumped from about 252 euros (2018–2020 average) to 421 euros by late August. Feed accounts for 65%–70% of production costs, with energy use on farms and in processing adding further pressure, along with a 50% rise in packaging. Sustainability concerns add cost differences between cage-raised and free-range or organic eggs, with free-range options carrying up to a 50% premium. Bird flu and tight world supply further bind prices. The delayed pass-through of higher costs to consumer prices has become evident as producers face a gap between cost increases and the ability to transfer those costs to shoppers, Fernández Poza notes.
Bread: 15.2% increase
The bakery sector faces higher production costs tied to wheat and energy. Eduardo Villar, leader of Ceoppan and UIBC, explains that the industry cannot fully shift cost increases to consumers. Some bakeries have reduced loaf weight in a practice known as refluffing, while others resist price hikes despite rising costs. The broader industry is seeking public sector support, with protests in various provinces to press for relief measures.
Milk: 26% increase
Even as energy and raw material costs rise, milk prices to consumers climbed 26% in August. The federation’s general secretary notes that higher prices paid to producers, along with elevated production costs and farm closures, contribute to the uptick. August data show milk paid to farmers up 38.6% from 2021. A key concern is guarding future dairy supply; if private-label milk prices retreat, the yearly impact on a typical family could be around 41 euros based on average consumption. The industry argues that cost-sharing and targeted public support are essential to maintain ongoing milk availability for consumers and producers alike.