Ministry predicts egg, milk prices to rise 17%

Coming days after bread prices went up, Agriculture Ministry study attributes rising costs to drought, global grain prices.

By NADAV SHEMER, BEN HARTMAN, GIL STERN STERN HOFFMAN.
eggs in hand 521 (photo credit: Ron Tarver/Philadelphia Inquirer/MCT)
eggs in hand 521
(photo credit: Ron Tarver/Philadelphia Inquirer/MCT)
Egg, milk and chicken prices are expected to rise by up to 17 percent by the end of this year, the Agriculture Ministry forecast Wednesday.
A study conducted by the ministry’s Research, Economy and Strategy Division said the price increases can be attributed mainly to the prolonged drought in the US, which has triggered a rise in the cost of agricultural commodities.
Grain prices, it added, are expected to increase by 50% by the end of the year.
Consumers, the study said, can expect to see a 13% rise in milk prices and a 14% increase in the price of chicken and turkey. The largest price increase outlined in the report, however, was for eggs, which it said could become 17% more expensive.
The report was published just one day after the price for a loaf of bread under government supervision rose 6.53%.
The Industry, Trade and Labor Ministry, which is responsible for bread, said the hike was caused by sharp appreciation in the global price of wheat in the past month that inflated the price of flour.
Labor chairwoman Shelly Yechimovich issued a statement following the Agricultural Ministry’s announcement Wednesday, in which she said that although the reasons for the price increases are external, the government is exacerbating the situation.
“Instead of easing the situation of the poor and the middle class, whose purchasing power is weakening, [Prime Minister Binyamin] Netanyahu and [Finance Minister Yuval] Steinitz are worsening the situation through their economic directives and value-added tax increase,” she said.
MK Amir Peretz (Labor) slammed the government for not holding a proper discussion on how to deal with the rising cost of living. The continuous decisions to increase the price of basic products are “putting everything on the backs of the sectors that bear all the burdens in Israeli society – the poor, the middle class and young couples.”
“Unfortunately the government isn’t even holding discussions before it makes a decision on this,” he said.
Closing down his butcher shop at Tel Aviv’s Carmel Market late Wednesday afternoon, Kobi Matityahu said the imminent price hikes “just make a hard situation harder.”
The family business his father opened decades earlier has already felt the bite of higher consumer prices over the past year, according to Matityahu, who said “we already see people buying less than before. It’s the type of thing that could close down the business.”
With typical Israeli dismissive optimism, the 39-yearold added “but we have these ups and downs a lot, we’ll get through it.”
In central Tel Aviv, Tomer Levi, 38, the owner of the ice cream store chain “Fruity” said the expected price hike on milk will merely be the latest blow to a business that has been steadily declining over the past year.
“We already feel it. In 11 years we never had a year like this. People I used to see every day I maybe see once a week now.”
Levi added that higher taxes and price increases on supplies like milk are falling on consumers who are increasingly choosing to pocket the expendable income they would have spent on ice cream on a hot summer day.
“It’s bad now but just wait, after the holidays, it’ll only get worse,” Levi added.
In September, gas prices are expected to rise 40 agorot to a record high NIS 8.25 per liter.
The higher price is comprised of a 30 agorot per liter increase due to oil prices and the one percent increase in value-added tax set to take effect.
The final price of a liter of gasoline may be adjusted before the end of the month, but in any case fuel is expected to cost more and for the first time pass the NIS 8 per liter benchmark.