THERE is building pressure in the food industry for higher costs to be pushed through to the market.
In the past few weeks we have we seen a fundamental change in the supply/demand balance in world grain markets as Russia decided to put its internal food security ahead of earnings roubles from trade.
The effect has quickly rippled across grains and oilseeds as the interdependency of markets and growing choices becomes apparent.
Higher costs will put pressure on a number of food and feed user segments which rely on grain as a primary feedstock.
But the cost of grains is only a new development - costs of other business inputs have also been steadily rising.
For the past year, the average rate of cost inflation for utilities has been rising at about 14 per cent a year, while the cost of vehicle fuel is running at more than 7 per cent a year.
Food companies have weathered tight times as they have firstly watched the drift of consumer spending towards cheaper lines and now frustratingly wait for the return to better margins.
The return to "premium" is being delayed by both lingering uncertainty for many people who remain nervous of the times, and the fact that many find cheap foods not too bad at all and are sticking with them.
The world's biggest food company Nestle recently announced its annual results and bemoaned that it was too dependent on the sluggish developed world.
Green buds of prosperity are returning to Europe and the US, although the recovery indicators are patchy.
What are the chances of food suppliers getting away with that in Australia?
In Australia consumer confidence has been steadily improving.
Looking at the Westpac-Melbourne Institute index - confidence has rarely been higher in the past 10 years.
However it is quite hard to discern whether people are feeling happier because interest rate rises are slower than expected or they feel the economy is strongly on the rebound.
Retailers have bemoaned with the latest reporting of retail sales that the most important reason they are holding up their sales line is that they have been forced to slice the price to keep attracting shoppers.
Ask people running some of the pricier restaurants around town and they reckon times are much better than a year ago.
It's like the double-edge of the MasterChef effect - people want to cook like the legends in their own kitchens, but the appearances of big names on TV is also drawing bigger queues to "name" outlets to see what all the fuss is about.
This situation is also symptomatic of a multi-speed recovery in consumer spending.
And for this reason it would be a brave call to assume that shoppers can be quickly weaned off "value". Price relief is needed, but it should be steady and gradual.
