Small Increases Expected for Food: Food Price Report 2015

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Canadians’ grocery bills will increase slightly in 2015, but lovers of bacon, steak, shrimp and vegetables should prepare to dig deeper into their wallets another year, says a forecast by University of Guelph researchers.

Overall food prices are expected to increase marginally by between 0.3 and 2.4 per cent in the coming year. Grain prices are expected to remain nearly unchanged, and some staples, such as dairy and eggs, could even be less expensive in 2015. Jumps of three to five per cent are expected for meat, fish and other seafood, and vegetables.

The report was covered by various media, including CTV Kitchener, CTV News Channel, CBC Newsworld, CBC Toronto and Global News.

The annual Food Price Report is prepared by researchers at the Food Institute of the University of Guelph. It examines and discusses Canadian food prices, including restaurant prices. The Food Institute’s predictions for 2014 were mostly accurate, but there were some unexpected upturns in price.

Sylvain Charlebois, a Marketing and Consumer Studies professor in the College of Business and Economics, said these price increases could lead to some changes inside stores.

“Consumers become more strategic when prices increase, and so do food distributors; since they don’t want to lose market share, they look for better bargains to offer to consumers,” he said.

“Stores and processors may procure from places around the globe they had considered as much before. They also hedge against the currency as much as they can. In processing, packages and portions will likely continue to shrink.”

Specifically, the report notes meat prices skyrocketed last year, jumping 12.4 per cent. Fish prices also jumped, by 5.9 per cent, and are expected to go up again this year as sustainably minded consumers look for specific products.

Bacon-loving Canadians paid the most, as prices jumped 25 per cent. Ham and pork chops also climbed by 18 per cent.

The report points to higher slaughter fees for cattle in recent years and diseases that affected hog prices, including porcine epidemic diarrhea.

Meat prices are expected to rise by no more than five per cent in 2015, as increasing demand around the world has an impact.

“Global issues are affecting Canada more than ever,” said Charlebois.

“Even as agriculture becomes more efficient, the demand for meat protein around the world is growing at a very rapid pace, driving up prices here. Climate change is also compelling Canadians to pay more for food and make different choices.”

Droughts in California led to an increase of three per cent in vegetable prices in 2014; those prices are expected to continue to rise, since California is a key source of vegetables imported to Canada in winter.

Nearly half of Canada’s food is imported, the report said, and faraway changes in weather and climate can have a big impact on prices. In addition, a lower Canadian dollar is expected to push prices upward.

Canadians can expect to see smaller grocery outlets closer to their homes, especially in urban centres, the report said.

“Grocery sales at stores closer to home, which are walkable, are of increasing importance to Canadians,” said Charlebois.

Forecasts and expected price increase:

  • Meat – 3% to 5%
  • Fish & Seafood: 3% to 5%
  • Dairy & Eggs: -1% to 1%
  • Grains: 0% to 2%
  • Fruit & Nuts: 1% to 3%
  • Vegetables: 3% to 5%
  • Restaurant Foods: 1% to 3%

The Food Price Report 2015 also involved Guelph professors Michael von Massow and Erna van Duren (Hospitality, Food and Tourism Management); Francis Tapon (Economics & Finance); Paul Uys (The Food Institute), and graduate students Warren Pinto and Amit Summan.