How are prices determined for German food prices?

Last week, German consumers were faced with an unfamiliar phenomenon: rising food prices, especially for milk products. The reasons given were growing world demand and thus a shortage of raw materials. The portion that raw materials account for in food processing can be very small, however. In a fictitious kilo of bread there is only 7.5 cents of grain according to the old price. Even if the grain price were to increase by 75 percent, as it has since last year, this would lead to a price increase of 5.6 cents per kilo. This is at most 2 percent of the current price if the kilo bread costs 3 euros, according to Ifo calculations. There are many indications that agricultural raw materials for the production of food and beverages will indeed become lastingly more expensive. But we can only attribute the price increase to raw materials to price hikes at the counter according to the percentage to which these raw materials are present in the food product. In the case of butter, with a high raw material content, this could mean a stronger price hike, but for other milk products the content is comparatively low, he argues. It is the responsibility of consumers and consumer advocates to keep a close watch over price increases and voice their criticism accordingly.