‘Perfect storm’ to strike grocery aisles
Report cites ‘disastrous’ year in predicting steep price rise
A family of four in Canada can expect to spend almost $1,000 more on food in 2022 than in 2021.
Driven by climate change and supply chain disruptions, food prices will rise at an even faster pace in 2022, particularly for restaurants and dairy, according to the latest Food Price Report from Dalhousie University’s Agri-Food Analytics Lab.
From floods to fires to the continued effect of COVID-19, “2021 was a disastrous year,” said Sylvain Charlebois, the lead author and Dalhousie professor in food distribution and policy.
The 12th annual report predicts food prices will rise between five and seven per cent overall. Certain categories are expected to be higher, such as the cost of dairy and restaurant menu prices, at six to eight per cent.
Other categories will remain more stable, with meat and seafood expected to rise as much as two per cent in price, according to the report, conducted in partnership with the University of Guelph, the University of Saskatchewan and the University of British Columbia.
Michael Graydon, CEO of Food, Health & Consumer Products of Canada, said the costs of manufacturing food products are steadily rising, from labour costs to transportation costs to the costs of ingredients. Canola, for example, skyrocketed in price in 2021, he said, causing the price of canola oil to rise with it.
“When all of these input costs continue to go up, the manufacturer just can’t absorb the continued inflation,” he said.
“It’s kind of that perfect storm, unfortunately.”
The report predicts how much money individuals will spend on food in 2022, with variations for gender, age and factors such as whether they are pregnant or nursing.
A family of four — a man, a woman, a boy and a girl — will spend up to $14,767 in 2022, the report predicts, an increase of $966 over 2021. That’s the highest predicted increase in both percentage and dollar amounts since the report’s first release.
General inflation was at its highest in recent years in 2021, driven by prices of oil, housing and food, according to the report.
Over the past two decades, food price inflation has outpaced regular inflation, and certainly outpaced wages, the report notes: a typical grocery bill went up by 70 per cent between 2000 and 2020.
Last year’s food price report predicted prices would rise between three and five per cent in 2021, and for the most part they did, but a few items skyrocketed beyond expectations, notably meat at almost 10 per cent.
However, meat prices are expected to stay relatively level in 2022, while dairy is expected to go up more due to incoming price hikes by the Canadian Dairy Commission.
Broadly speaking, any food product requiring grains — bakery, meat, eggs — will see prices go up if they haven’t already, said Charlebois.
At Toronto independent grocer Fiesta Farms, the cost of getting staple products from suppliers went up in 2021 — meat in particular, say the managers there, as well as dairy and eggs.
They’ve also got their eyes on rising prices for edible oils like olive oil, as well as dry imported pastas. And like most businesses in the food industry, Fiesta Farms is having a hard time hiring.
But that doesn’t mean they can just turn around and pass on those costs to customers, percentage point for percentage point, said store manager Joe Furfaro. Instead, they have to take a look at their margins and take any increases slowly.
“We just take it little by little so that the customer doesn’t freak out,” he said.
Luckily, since the onset of COVID-19, managers say Fiesta Farms customers seem to be more aware of what’s going on along the supply chain, and therefore more understanding when prices go up.
Though overall employment in Canada has reached pre-pandemic levels, restaurants continue to have labour force challenges, as many workers have left the industry.