The goose is getting fat - at far greater expense

Two years ago, buying a goose for Christmas dinner would set you back £35. This year it's more like £70. Merryn Somerset Webb looks at the soft commodities boom that's pushing up the cost of Christmas.

Two years ago, after too much reading of Sunday newspaper supplements, I decided to have a Christmas party at which I would cook one of every size of winter bird for dinner.

So I bought and roasted in various ways a goose, a couple of ducks, a brace of pheasant, a few partridges and a tray of quail. It was extremely easy and looked pretty impressive, so this year with my in-laws over for Christmas lunch for the first time - I thought I might do it again.

Now I'm having second thoughts. Why? The goose. In 2005, it cost me around £35. This year it's going to be more like £70. Stop to think about this and I suppose it makes sense: geese eat corn and the price of corn, along with that of most other grains, is soaring. Wheat prices are up almost 70% this year alone, soybeans now at a 34-year high, and the average UK family is now spending £750 a year more on food than only 12 months ago.

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Christmas sticker shock

Add it all up and I don't think I'm going to be alone this year in suffering from Christmas sticker shock: according to the British Retail Consortium the price of buying the ingredients for the average turkey and trimmings lunch is up by around 14% on last year, and still rising. Over the last 20 years, global food output has risen at 1.3% a year, which would be fine were it not for the fact that the global population has risen at more like 1.35% over the same period, and that it is still rising at speed: it is forecast to jump from its current 6.6bn to 8.3bn by 2030.

At the same time, rising wealth across the world is driving a shift towards increased consumption of protein: when people have surplus income their first inclination is to chuck a bit more chicken in the pot. This matters for the very simple reason that it takes around 7kg of grain to produce 1kg of meat.

So the more meat we all eat, the more grain we need. Add to this the huge demand for grains from the biofuels industry and you can see why prices are rising at the speed they are.

Cover the cost of next Christmas

Analysts calculate that global food production will have to rise at about 3% a year from here to keep supply and demand in some kind of balance and prices stable but at the moment there seems scant chance of that happening: productivity rises have slowed it's tough to get our land to produce any more per acre than it does already and the supply of agricultural land around the world is being limited by urbanization and desertification: China loses 0.6% of its agricultural land a year, says Credit Suisse.

On the plus side there is now a way for consumers to mitigate the effect of prices rises without actually having to sign up for their own allotment. There are various London-listed ETFs that will give you exposure to price rises of various grains and one (AGGP) that tracks the average price of a basket of grains. Buy into this, as I have, and with a bit of luck you may find that proceeds go some way towards paying for next year's Christmas lunch.

First published in The Evening Standard 4/12/07

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.