The definition of ‘summer’ may have permanently changed in Britain with yet another inclement July - longer daylight but worse weather than winter. For commercial planning purposes it is probably appropriate to assume that the average Briton will be wearing jumpers, eating casseroles and contemplating putting the heating on in August.

As British farmers face deluges of rain, their counterparts in the US Mid-West have been experiencing record high temperatures. Along with storms in Russia & Ukraine, disruptive weather has moved from being conversation at the bus stop to a material influence on the output of the northern hemisphere harvests - the prime source of supply that feeds the world.

There is always nervousness on our behalf at least about speculative comment and reverse broking at this time of the year, but there have now been a number of agency downgrades to anticipated global crop production for 2012, most notably maize, which serves as animal feed, plus cuts in expected stock levels, most recently by the USDA.

” Agencies have downgraded global crop production forecasts”

What this means is that core global food price inflation can be expected to remain more robust for longer. Indeed, without revision, should the harvest come in larger than anticipated, cereal prices can still be expected to remain fulsome for the next few quarters or maybe the full year, with the corresponding implications for the linked livestock sectors. Such news will be greeted with some joy by cereal farmers but more apprehension by pig and poultry farmers, bakers and developing world consumers.

Against this pressure, the global commodity market is a little different in one important respect to that recorded over the past few years, with oil prices coming off their high levels, so providing some support for the trade and consumers alike.

Food price inflation continues to look more likely than deflation for the foreseeable future, and with wage growth looking set to remain subdued, food is expected to account for a larger proportion of household expenditure, perhaps fundamentally challenging the core concepts of Engel’s law?