Thursday, December 10, 2015

Canada’s food inflation tops in world

Canada’s food prices are rising faster than anywhere else in the world, according to a University of Guelph research team led by Sylvain Charlebois.

The Food Institute team says Canadian prices will rise by two to four per cent next year, which will be much higher than the general rate of inflation.

Food prices rose by 4.1 per cent this year, pushed by meat and higher costs for imports from the United States, thanks to the plunging value of the Canadian dollar.

The loonie has fallen 14 per cent to about 73 cents US, pushing up prices for the 81 per cent of vegetables, fruit and nuts imported from outside of Canada.

Here's what the Food Institute study says to expect in 2016:

Food price inflation %
2016 price increase
Fish and seafood
Dairy and eggs
Fruits and nuts
Overall food costs

Charlebois says the average Canadian household will spend $8,631 on food in 2016, an increase of about $345. That figure includes $2,416 spent at restaurants.

"Canada is the only industrialized country where you find the food inflation rate to be above 2.5 per cent. That's significant. Right now we are sitting at 4.1 per cent," Charlebois told CBC News.

"Europe food inflation's barely at one per cent. There's too much food in the market. The U.S. inflation rate is much lower than ours. The currency clearly is not helping families that are in need of affordable foods."

Charlebois said the high prices are hardest on low-income Canadians and people in remote communities, who often have difficulty affording fresh food.

"We need to figure out a way to offer affordable foods to northern communities," he said.
Another factor that could affect food prices is climate change, according to the Food Institute study.

The drought in California has pushed up fruit and vegetable prices in 2015, but in 2016 a big El Nino should mean a lot of rain that will restore crops in the U.S. southwest and could help keep prices down. El Nino is a Pacific current that affects weather patterns.
Charlebois said what Canadians choose is changing.

As meat prices, especially beef, rose to record highs, people switched to other proteins, such as lentils and beans.

They are "looking for local products …,and they're concerned about the ethical treatment of animals, the ingredients, the naturalization of food."

"Throw  in a lot of different things that may drive prices — like McDonald's this year to go cage-free cured chicken without antibiotics — all these things will only drive prices higher," he said.