Kellogg’s Australia hikes cereal prices thanks to ‘worst drought in 400 years’
The drought – which began in 2017 – has driven up the wholesale price of Australian-grown wheat, corn, oats and rice – core ingredients in Kellogg’s popular brands, including Corn Flakes, Coco Pops, Nutri-Grain, Foot Loops, Special K and Rice Bubbles.
Climate change
According to the Bureau of Meteorology, the rainfall between January 2017 to September 2019 have been the driest on record, with last month’s rainfall being ‘below’ to ‘very much below’ average for most of Australia.
Farmers in New South Wales, the worst struck region, are bracing for ‘Day Zero’ – the point in time at which rivers and dams run completely dry – forecast by weather experts to happen in the next six to 12 months.
A recent study by the University of Melbourne – published in Climate of the Past, an interactive open access journal of the European Geoscience Union – found the country’s recent droughts to be the worst on record in the past 400 years, possibly even the worst in 800 years.
Unable to offset increased costs
In a statement, Kellogg’s said the decision to hike the price of its breakfast cereals was not taken lightly.
‘We’ve worked hard across the business to drive efficiencies and find opportunities to absorb as much of the increase as possible – including our recent announcement to invest in the Beryl Solar farm for our energy needs – but unfortunately, we’ve not be able to offset all of the increased costs.’
‘This wasn’t a decision we took lightly, but we are committed to always do everything we can to buy locally and support Australian farmers.’
It added it has been using 100% Aussie grains for most of its cereals made at its NSW factory for 90 years and will continue to do so, despite drought conditions.
Study:
Multi-century cool- and warm-season rainfall reconstructions for Australia's major climatic regions
Authors: Mandy Freund, Benjamin J. Henley, David J. Karoly, et al
Clim. Past, 13, 1751–1770, 2017
