Canadian households can expect to pay a lot more for food next year, according to the latest Food Price Report by Dalhousie University and the University of Guelph.
“2020 will be surprisingly expensive for consumers at the grocery store,” Sylvain Charlebois, lead author of the study, told BNN Bloomberg in a phone interview.
Overall, food prices could increase two to four per cent next year, above the current rate of inflation, according to the study. It predicts households will pay an average of $12,667 in total for food in 2020, an increase of $487 compared with 2019 figures.
The study warns that, from a macro perspective, climate change will be a “very significant” driver of the increase in food costs.
“In 2020, the elephant in the room is climate change and its impact on our food systems … Canadian farmers will face challenges in the future dealing with unpredictable crop yields, heat-wave livestock threats, pasture availability and pest and disease outbreaks,” the study states.
The study notes that 10 per cent of Canada’s greenhouse gas emissions currently comes from crop and livestock production. That figure doesn’t include emissions from fossil fuels or fertilizer production.
It also states that the federal carbon tax rolled out in the country earlier this year is not expected to have a meaningful impact on food prices.
“Those who claim that a carbon tax increases the cost of food for consumers in Canada have not closely looked at the data. Industry is absorbing most of the costs by focusing on operational efficiencies.”
Of all categories identified in the study, meat prices are set to rise the most — compared to bakery, dairy, fruit, vegetables, restaurants, seafood and other — at four to six per cent. While the rise of plant-based alternatives could place downward pressure on meat prices, global demand for meat will inevitably increase domestic prices, according to the study.
The rise in food prices is expected to put additional pressure on households amid a stagnant wage environment.
“Food affordability remains a challenge for consumers, especially in light of what happened in 2019 with vegetables,” Charlebois said, referring the 12 per cent rise in the cost of vegetables this year, well above the estimated two to four per cent.
The study links the astronomical rise in produce prices to unforeseen circumstances, in particular the outbreak early this year of E. coli infections linked to romaine lettuce grown in northern and central California. The outbreak has affected prices of both other leafy greens such as kale and vegetables as a category. More recently, health officials in the U.S. and Canada disclosed late last month another illness outbreak linked to romaine lettuce.
With the cost of vegetables expected to rise another two to four per cent next year, Charlebois said more domestic greenhouses and additional processing capacity are needed to reduce reliance on foreign imports and to temper future price increases.
“The more you support food processing, the more you’ll see innovation strive in Canada. That’s kind of missing,” he said.
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