Food prices at grocery stores across Canada are expected to continue rising in the fall, but not entirely due to Covid-19: recent adverse climate change has caused scorching heat and drought conditions, which are expected to translate to less transitory forces of food inflation.
According to a CTV News interview with Dalhousie University professor in food distribution and policy Sylvain Charlebois, Canadians can expect to pay more for their groceries in the coming months, due to factors stemming not only from Covid-19, but also climate change. Canada’s Food Price Report, of which Charlebois is the lead author of, forecast that food prices will increase anywhere between 3% to 5% in 2021; now, the professor is pointing out that prices have indeed risen to the upper bound of the estimate, and will likely continue to increase.
“Already this year, beef is up nine to 10 per cent, pork is up 5 per cent,” Charlebois said. As Canadian farmers face constrained yields due to crop damage amid significant drought conditions across the country’s agricultural regions, the cost of livestock feed is expected to remain elevated.
However, even as some farmers will be forced to sell their livestock to help offset costs, Charlebois contends that prices will still continue to rise. “We are expecting inventories to get lower in the fall, and prices typically go higher, so we are expecting beef prices to go even higher in the fall,” he explained.
Similarly, this year’s poor crop yields will also have an impact on the price of bakery items. “We’re expecting bread to become more expensive and bakery in general is going to be more expensive, for sure,” the professor said. “For the first time in many years we are expecting an increase of 5 to 6 percent in that section of the grocery store.”
But that’s not all Canadian consumers’ wallets will face come fall: according to Charlebois, typical pantry items such as cookies and crackers will also be subject to accelerating prices, but in a different way. “Shrink inflation is coming back, so basically, they’re not necessarily playing with the price all that much, but they’re reducing quantities,” he warned. “It’s a subtle way to actually make sure that consumers aren’t necessarily spooked at the grocery store.”
Information for this briefing was found via Canada’s Food Price Report and CTV News. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.