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Why meat prices in Spain will rise if the war in Ukraine continues

Rising cereal prices caused by the war in Ukraine are having a knock-on effect on meat prices in Spain, and things could get worse if the war continues.

La Boqueria market in Barcelona, Spain in 2017.
La Boqueria market in Barcelona, Spain in 2017. Photo: Z S/Unsplash.

You might not have known that cereals are key to the meat industry, but you may have noticed meat and poultry prices rising on supermarket shelves. The feed eaten by animals, such as pigs, is usually made up of around 20 percent corn, and the rise in cereal prices is now affecting the rest of the food chain, and meat prices in Spain in particular.

Experts are now warning that prices could continue to rise if the war in Ukraine continues. This is because Russia is the world’s main producer of grain crops, a key ingredient in many animal feeds. A continuation of the war could therefore lead to further price increases that could indirectly affect all animal products such as ham, eggs, and milk.

READ MORE: Products that are more expensive than ever due to the war in Ukraine

Meat prices in Spain were rising even before the outbreak of war in Ukraine, and have climbed by 18 percent in the last year. 

The added economic shock of war, though, has caused meat prices to spike: beef prices, for example, have risen by almost 1 percent a week since March.

Jesús, a livestock owner, explained to Spanish outlet La Sexta that feeding his animals accounts for around 80 percent of the cost of production for his business, therefore, if cereal prices continue to climb, so will the price of his product.

This extra cost will then be passed on to consumers in supermarkets. “The [price of the] shopping cart is going up and it is logical, there is no other way to do it, products are going to be much more expensive,” he said.

The conflict-induced price spikes come amid tough economic times in Spain, not only because the country is still recovering from the COVID-19 pandemic, but also because Spaniards have been feeling the pinch of inflation in the last year. 

READ MORE: Products made more expensive than ever due to inflation

Last October, electricity bills were sixty-three percent higher than the previous year, according to statistics from Spain’s Instituto Nacional de Estadística (INE). Spain’s Consumer Price Index (CPI) ended 2021 at 6.5 percent – fractionally lower than forecast but still the highest level in almost thirty years.

According to a recent survey by the Bank of Spain, 60 percent of national companies plan to raise their prices in the coming year. 

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MONEY

One in three Spaniards can’t afford to go on holiday this summer: study

One third of Spaniards can't afford to pay for a holiday this summer and almost half the population is having trouble making ends meet, according to new data from Spain's national stats agency.

One in three Spaniards can't afford to go on holiday this summer: study

Data from Spain’s national statistics body, the Instituto Nacional de Estadística (INE), has revealed that one in three Spaniards cannot afford to take a week’s holiday.

The 2021 Living Conditions Survey, published this week, also concluded that over one in four Spaniards (27.8 percent) were at risk of poverty or social exclusion, a figure which represents an increase of 1.6 percent on the 2019 study.

The INE considers someone at risk of poverty if their income level is below the the national average; that they are suffering “severe material and social deprivation”; or that their household is classified as “low intensity in employment.”

There are 13.2 million people who meet at least one of these criteria in Spain.

The study, which the INE publishes once a year, is the most detailed reference for measuring poverty at the national level, and the numbers also reveal that there are 10.3 million people in Spain with incomes below the poverty line.

In 2020, that threshold was €9,535 per annum for a single-person household and €20,024 for a household of two adults and two children.

Furthermore, there are another 4 million Spaniards facing “severe material deprivation,” which is defined as people who cannot afford expenses such as going on holiday for at least one week a year (32.7 percent of Spaniards), eating meat or fish every two days (4.7 percent), having the financial capability to deal with unforeseen events (33.4 percent) or maintaining a comfortable temperature at home (14.3 percent), something particularly important during the summer months in Spain but made much more difficult by increasing electricity prices.

READ ALSO: How much does it cost to have air conditioning at home in Spain?

North-South divide

Many countries have a famous North-South divide – Italy, England, and the United States, to name just three. Spain can be included on this list, and this is especially true when delving into the INE data.

According to the study, economically speaking Spain is increasingly divided into horizontal halves: in southern Spain poverty levels even double those in the north.

A third of people living in Andalusia and Extremadura are at risk of poverty, for example.

In the Canaries, Murcia, Castilla-La Mancha, and Valencia, the figure is one in four.

Contrast that, however, with the data from northern Spain: only one in ten people in Navarra and Basque Country are at risk of poverty; in Madrid (admittedly central Spain but it is the capital) and Catalonia, the figure is slightly higher but still only around 15 percent.

Inflation

The economic hardship comes amid not only Spain’s recovery from the pandemic, but also the double shock of skyrocketing inflation, which reached a 37 year high this week, and crippling energy bills caused by knock-on effects from war in Ukraine.

A loss of earnings during Covid-19 lockdown, combined with Spaniards feeling the pinch of inflation in their shopping baskets and rapidly increasing energy bills, means that more Spaniards are being pushed into poverty and the gap between the rich and poor in Spanish society is widening.

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