Dairy prices skyrocket in Hungary, the worst would come in the spring

Some dairy products were up by 80-90 percent in November. After the panic-like price rises, rising costs could push inflation even higher in the spring, warns the agricultural expert.

Inflation hit another record high in November, wrote forbes.hu. The 22.5 percent rise was mainly driven by food prices, which rose by 43.8 percent. According to RTL.hu, dairy prices increased even more:

• the sales price of Trappista cheese increased by 91 percent,
• curd cheese by 81 percent,
• kefir and 2.8 percent fat content fresh milk in sachets by 78 percent,
• natural yoghurt by 77 percent,
• 1.5 percent fat cartoned UHT milk by 76 percent,
• butter by 74 percent,
• sour cream by 73 percent,
• 2.8 percent fat cartoned fresh milk by 71 percent,
• fruit yoghurt by 64 percent,
• 2.8 percent fat cartoned UHT milk by 61 percent,
• cream cheese by 57 percent,
• and natural butter cream increased by 37 percent.

Previously, the price per kilo of the 82 percent fat content, 100 gram package of producer-brand butter had already crossed the psychological threshold of HUF 10,000 (EUR 23.91), writes Forbes.

Underlying inflation-related psychosis

According to agricultural economist György Raskó, due to low profitability, many processors thought they had to raise prices immediately, because inflation is driving up all prices insanely. This is what we call inflationary psychosis: even those who would otherwise not have thought of it or would not have had the opportunity to do so are raising their prices, he commented on the phenomenon to RTL.hu.

“The increase in producers’ costs and the rise in the price of imports due to the weakening forint make the price increase fully legitimate,” said György Raskó.

Consumers will stop buying dairy products

Customers will not take dairy products off the shelf when they run out of money. The HUF 1,800 billion of election money that the government has given out this year is already running out. Many of those who received it thought they had something to spend. They spent quite a bit. We have to see the terrible trap: if this money runs out, or if households’ money for food decreases, inflation will not decrease, and neither will food inflation.