Food prices forecast to rise by 5 per cent in Canada

Wayne Roberts explains why he believes world food prices will continue to increase because of demand factors, and why the government needs to develop food policies.

CTV Montreal: The cost of eating

Many people are finding it increasingly difficult to fill their pantry -- as the price of some basic food items is on the rise. Maya Johnson reports.

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The cost of some items, such as romaine lettuce, has jumped in recent weeks.

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Who are you trying to kid??? Your comment about food price increases being temporary and prices coming back down is not even rational. This is Canada man. Prices only go up not down. The Canadian business structure has been to gouge the consumer as much and often as possible. "Make your profit on each sale - not on volume. Has been that way for years.

Johnny Canuck

Food prices forecast to rise by 5 per cent in Canada

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Food prices forecast to rise by 5 per cent in Canada

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Andy Johnson, CTV.ca News

Date: Sun. Feb. 6 2011 6:42 AM ET

Canadians can expect their monthly grocery bill to go up significantly this year, according to a new projection that says rising agriculture prices will soon trickle down to supermarkets.

The report from Capital Economics says food price inflation is set to increase from its current rate of just below 2 per cent, to nearly 5 per cent later in 2011.

That would mean a monthly grocery bill of $600 for a family of four, would climb to $630. A $9.99 box of chicken wings would go up by .50 cents and a loaf of bread worth $3.20 would increase by .16 cents.

David Madani, an economist with Capital Economics, and the author of the report, said the "strong increase" is a direct reaction to rising agricultural prices.

"Given the past increase in agricultural commodity prices, that this will lead to substantially higher consumer price index food price inflation later this year," he told CTV.ca.

"It's definitely going to be a strong increase but what's important to understand is it's entirely consistent with historic movements between global agriculture prices and consumer price index food inflation."

The increases in those prices have been broad-based, affecting everything from grains, rice and sugar, to oils and fats.

Madani said there tends to be a lag of between six months and a year between the time agricultural prices go up for manufacturers, and the time that the increase is reflected on supermarket shelves.

He also said the 2011 increase will be temporary, blaming weather-related calamities such as the flooding in Australia as the primary driving factor for the rising prices.

"What that means is production, harvesting, will be down," Madani said.

"That will lead to stronger drawdowns on available inventory and this results in tighter global supply and demand balances, so as a result of that we get higher prices."

The approximately 3 per cent rise in food inflation will add .8 percentage points to Canada's overall inflation rate later this year, he said.

While consumers will feel the pain in the short term, with grocery bills increasing, Madani said the rise will be short-lived and the food inflation rate will return to normal next year.

"Our expectation is that next year we'll see these prices come back down because presumably production will rebound, weather permitting," he said.

"With the rebound in production we would expect that a lot of these prices will fall back down again and of course what that means at the end of the day is that the spike...will prove to be temporary."

A food inflation rate of 5 per cent isn't unheard of.

In 2007 and again in 2004 the rate was close to 4 per cent, and in 2001 the rate approached 5 per cent, Madani said, noting that in every case, the rise was directly linked to world commodity prices.

Statistics Canada's consumer price index summary for December showed an increase in the price of many food products, from a year earlier. Overall, food prices went up 1.7 per cent.

Following are some typical grocery story products with the price increase or decrease between December 2009 and December 2010 shown as a percentage.

Meat: 3.8 per cent
Fish and seafood: -2.8 per cent
Dairy products and eggs: 0.7 per cent
Bakery products: 1.4 per cent
Rice: -2.4 per cent
Pasta: 5.7 per cent
Fruit and nuts: 1.7 per cent
Vegetables: -3.0 per cent

Comments are now closed for this story

Bobby BubbleBath
said

Lets not forget that were not even talking about real food here, were mostly talking about poisonous genetically modified food. In a recent study, rats fed GMO food became sterile after 3 generations... think about it ! (and see for yourself what companies like MONSANTO are doing in your back yard, Canada) I know it costs more, but you should consider eating organic. Furthermore, food, energy (gas, oil, electricity etc) ISNT EVEN USED TO CALCULATE INFLATION. Thats right ! Apparently it "makes Politicians look bad" so they started to calculate the rate of inflation by excluding all of the things that fluctuate the most in price, which also happen to be the things we cannot live without.Food for thought.

Irritated in Saskatoon
said

Food prices have already gone up since Christmas. Probably more than the "expected 5%" in this article. And, it is yet another nail in the backs of the poor. I DARE the Conservatives in government to live on what my children and I live on. I want each politician - who is supposed to be servant of the people, not the other way around - to live on what this family of 4 does. They couldn't, because they're greedy & not living in reality.

N.Pervez
said

Wake up Canada! We are an Oil exporting country so every time the price of Oil goes up, we should be paying less for fuel and for food cause it�s costing us less as our Dollar value increased too. We are just being robbed by these inept bureaucrats and politicians.

Tan
said

I'm not sure there is much we can do about the prices going up, but at least sell us good food. I went to the grocery store today and all the vegetables were garbage, if you want to charge me x amount of dollars for a head of lettuce fine but I won't pay for a head of lettuce that's the size of an orange or pay for broccoli that's almost moldy. Sell me good food at least.

Saskatchewan Mom
said

You can feed a family of four for a month on $600? If only.

Dayton
said

Would one MSM reporter please backtrack the price of a loaf of bread and see where $3.20 per loaf relates to the $.16 a farmer gets today? Who is getting all the profit in the loaf? If bread is rising 16 cents per loaf were farmers producing wheat for nothing? It takes 1 bushel to produce 90 loaves of whole wheat bread. 1 bushel has risen approximately $4.50 or .05 cents a loaf or doubled in one year. Today at $3.36 per loaf the commodity ( wheat) costs 16 cents.

Kevin
said

How about those $9.99 watermelons no bigger than a soccer ball at Loblaws. You must have to be a government civil servant to afford them because I see lots of them paired up, married plopping them in their grocery carts without blinking an eye because they know they're taxpayer guaranteed salary will be adjusted with another raise so they can keep buying $10 watermelons, driving a Lexus SUV and living in a $300,000.00 condo.

agn
said

that's why i left canada. and for the better. my wife and i can buy groceries for 250.00 a month.

Bob in Surrey
said

We can no longer sustain our socio-economic system. Prices will continue to rise, people will continue to be forced into un-payable debt, and soon the whole entire mess we have created will come crashing down.

Frank Schlesser
said

On one hand it's good that food prices go up...we have too many obese people in Canada and that is due to over consumption...on the other hand, people will have to learn how to eat with a budget and buy groceries wisely.

Norma
said

Its unbelievable the amount of monet is needed to buy the everyday needs, ie bread, milk. Kids have to live on kraft dinner. The cost of milk is atrocious, and I dont blame the farmers for any of this, as they are badly treated by the Government. Its the people who make the products who have down sized the packages but the cost remains the same. As a senior I have to watch for sales and cut coupons, even day old bread is fine. No wonder people shop in Buffalo etc the retailers need to wake up . I noticed quite change in the retail stores just before Xmas when shoppers went to the USA to shop, all of a sudden the prices were being slashed, of course it didnt last long. The strength is in people ( as we see in Egypt ) we need to boycott stores, and demonstrate outside Queens park,maybe they will then take notice (maybe ) I received a big raise in my pension $2. 63 in Jan, I wonder what that will buy, a loaf of day old bread maybe. My heart goes out to families with children and the parents making minimum wage, how can they afford milk etc. and the government talks about obesity, give me a break.

rachelle
said

what is this everything is going up the food the gas the heating the lights etc everything, but not our salarys,I gust they want us to died paying everything, I gust who win in this game is the gov again, this has to stop,I think we should all go on the roads and bum money from everyone on the corners like they do in all the citys with buckets more money please

Ed
said

You people are idiots! Ever hear of typos? I would like to see you people keep up with the changing world. As for food prices, everything has been going up since the beginning of time. including our salaries. I can understand people who can't afford internet complaining but are you all worth what you earn in a week?

reidjr
said

Northern Princess It does not cost more to eat heathy most times your bill will be the same.

reidjr
said

George VOr avoid buying junk food.

sick of lefty hypocrisy
said

@10-78 I assume then that you will not be partaking in the advantages of being a Canadian such as medicare, CPP, etc...

reidjr
said

R.M.Thats really not true its very easy to eat healthy for not that much money.You can buy a pack of chicken legs and vegies for $20 that would feed 4 people.You could even buy a bbq chicken and french fries for $10 the list goes on eating healthy does not cost $$$ as some think.It has more to do with people beeing lazy its easy to put a tv dinner in for the kids or toss a pizza in the oven then take time to cook a good meal.

Zhimmy
said

How do you live in a country where there is so much agricultural going on? I'll tell you why "Globalization!" YOUR LOCAL FARMER realizes that he can sell his product to the world at a higher price then he can sell to you. This is rubbish there is so much food in Canada that we should not even feel this sort of thing. The Government should limit their ablity to sell abroad and feed Canadian Families first!

intrepix
said

Keep in mind that this is an understatement because this statement was made by a Federal source which has no idea about the additional fees that will be added to those in BC. Vancouver container port handlers will have an impact on raising food costs as well as further increases by BC Ferry cost increases. Both will affect the cost to consumers on Vancouver Island and the Gulf Islands. BC Hydro is also going to add some to this due to cost of refridgeration and stores with large freezers and coolers. Fuel costs will also provide some consideration to upward prices.

Ronald
said

A member of the conservative party said to Micheal Harris that food is quite affordable to all Canadians and that we are lucky. I wish that a conservative would live on the amount of money a poor worker in this country gets every two weeks ,they would be starving. the arrogance of a member of this gov. to say that food is affordable what nerve. That is why I cannot wait to get rid of this Harper and the rest of his cabinet in the next election.

10-78
said

If you are lucky enough to live near the US border, this is just one more reason to shop there. 90% of my family grocery bill is purchased from the US. I save 75% on cheese, 65% on milk, 50% on bread...the list goes on. Throw in 80 cent/litre gas and the savings add up to about $100.00 a week.

Michael D
said

GREED GREED GREED GREED GREED!!!!They LIE to Canadians that they have to raise the price of food and give them lousy excuses as to why and then Canadians complain for a couple of weeks and then grin and bare it...

rowann
said

i sure am glad i have enough room in my backyard for a garden, and i have joined a community garden as well. i still have potatoes and frozen carrots and swiss chard left over, and should still have enough until next harvest time. living on disability, if i didnt have that, i'd be pretty hungry.

Peterborough Johnston
said

Bakery Products up 1.4% ??? Who would of supplied that wrong manipulated number. What a crock - bread alone has gone from $2.00 to $3.00. and in my books that is 50% and still rising.

Lz in Edmonton
said

Hum inflation? Must be new....1970 Stamp 6 cents, 1980 15 c, 1990 37 c, 2000 43 c, 2010 57c 2011 63 c.....If people don't understand that it is a constant and inevitable fact of life, then you truly don't belong on this planet.

Archie
said

In 1900 the average North American spent approx. $76.00 of every $100.00 made for food, shelter, and clothing. Today that amount is approx. $37.00. If you are an average wage earner it would take you tens of minutes to earn the cash to buy your food, some more tens of minutes to buy your new clothing and maybe an hour or two to pay for the gas, electricity and oil you might need today. Earning the money to pay for the rent or mortgage may take until noon, after that the money earned can be put towards the big tv, vacation, satellite tv subscription, entertainment, mobile phone, new toys for big and little kids, savings and income tax. Back in 1900 most of the stuff that would fall into these groups you could not get because they had not been invented. Price increases in a way also spur the invention of new, safer, more efficient products. This is what progress is all about, you must look beyond the rising price of a single commodity. Even looking back only to the 50's , 60's and 70's you will see the same trend. It's more, "what you can get for the time you have to put in to get it" that is a sign of progress. As long as the price increase trickles through the economy which should lead to increases in efficiency everyone, the consumer included, should benefit.

Will
said

If you are going to debate this price change (small change) then look at the root cause. What is the single commodity that our modern society depends on for everything and what has happened to prices there? Oil and it costs more. Even here in Canada where we have the 3rd largest accessible reserves in the world, we are paying market prices that are shaped by events int he middle east. Of course there is some reflection in food prices when oil costs more: farm chemicals are mostly made from oils, fuels are made from oil, packaging is mostly oil or oil dependant, transportation requires oil. Do I really need to say more?! Time for industry to look seriously at alternative energy (including that big boogy-man nuclear) and move forward. Time also for people to take some responsibility. Remember the vegetable garden? Not wasting so much? Compost? and so many other options that don't require mindless complaining.

SVCR
said

The biggest problem is the profit the food stores make out of plain greed. Low quality and high prices.The 'No-Name" label was suppose to bring down the high prices that companies like Kraft and French's etc want for their processed products. WELL that no longer holds true on the shelves. Then there is "The Superstore" that can't fill their shelves efficiently since before Christmas and their prices have really increased. Why should we pay more for poor service and lack of product availability. You wouldn't know we have been through a recession with the price of food and gas now!!!So much for protecting the consumers!!!

R.M.
said

There is so much information being put out regarding weight increases in children, how can you blame people when the cost of food keeps going up. To eat healthy you have to buy expensive vegs, fruits ,grains etc and most families cant afford that. Its cheaper to eat junk food, as you get more for the money, but it is not healthy. When families have to stretch the almighty $ its survival that counts. Health is very important and we have to look after ourselves, but at the same time if the money isnt there after you pay the utilities, rent etc whats left. Maybe the Governments should put their money where their mouths are and help families and seniors instead of shoving obesity issues down our throats. People are not blind or stupid, they can see that weight is a problem, jusdt give the tools to manage it.

Trevor in the Hat
said

A couple years ago gas prices were ovr $1.20 per litre nd all the transport companies, cab companies and everyone else imaginable raised prices, they say, because of the gas prices. A few months later gas prices fell, right along the time the recession came along, and yet none of those transport or taxi etc. prices went down with the price of gas. Now they are predicting gas will once again go over $1.20 per litre this spring and all the transport and taxi etc companies are already saying they will have to raise prices yet again to account for the higher price of gas even though they never lowered prices since the last time this happened. What does this have to do with the above article? This goes to show that once prices are raised they are NEVER temporary, Income tax was a temporary measure to pay off the world war, GST was temporary and was supposed to only last for 5 years. On top of the prices going up for the supposed food shortages due to weather (how much food does Canada even buy from Australia?) prices will go up even more due to higher transport costs.

Margaret in Cambridge ON
said

Excuse me but obviously it hasn't been noticed that in the past weeks Bread has jumped up in price, and the size of the loaf is smaller by about 3 slices, and lots of products, especially canned and packaged goods, have gone up in price while the package or can has been reduced in size. Someone is not doing their homework. Go shopping and see for yourself.!

rmsbl4
said

Does anyone know of anything that has gone down in price

Nathan
said

When you print money, this is what happens. Essentially the same amount of goods are available but there is more money in circulation, increasing the prices and decreasing the value of the money. The odd crop shortage definitely helps. I only have one other thing to say and it's to "senior" the pension guy. Just be happy that you have a pension right now. I'm 23 years old and am planning on not having a pension even though I pay into one. The way our government spends more than it makes it; pensioners, and the working middle class is the one who will be squeeze out. It's unfortunate, but these are your real world indicators that deep economic problems are still present.

Northern Princess
said

I remember vividly going to the store as a child with a whole dollar in my pocket and picked up 5 breads for a dollar. Don't believe me, too bad as there are many people where I grew up that could vouch for that. What happened? Companies thought profit was better than helping people. $3.5 for a little bag of walnuts (1/4 cup worth). Who in heck can bake all the Christmas goodies that we used to have as a child, in today's prices? How in the hell can families afford to 'follow the food guide' with unbelievable prices that we see now, forget later? How can senior citizens eat healthy when their pensions don't go up with everything else?This is extremely sad! Where's Robin Hood cause there sure are a hell of a lot of people gouging people?

LM
said

I was raised on a family farm that was pretty much self sufficient, selling or trading surplus. That way of life is gone. There were more than a dozen farms on our road- now only 2 and tey are only hobby farms. One of the big problems is that a farmer gets about $.70 a pound for his beef on the hoof, that does not pay for fuel,time,loss of animals, or utilities. Does that relate to $10.00 a pound for a steak at a suppermarket?

heidi's mom
said

I think if the people who buy junk food will pass it by and go for foods with proper nutritional value, their food bill will work out about the same. I know I'd sooner have fresh fruit and vegetables than a lot of salt loaded "snack" food. While the junk food is quite often cheaper, you still have to weigh in the consequences of it; junk food equals unwanted calories, and fresh fruit equals better taste and less around your waist!

wo't be fooled
said

I am getting really ticked off with the garbage that mainstream media is feeding us. Do you really think that we have no eyes with which to see nor a brain with which to think? Firstly, prices have already risen more than 5% within the past year. 6 months ago, one could buy skinless boneless chicken breast on sale at $2.99 per pound. Now, the sale price is $4.99 per pound with a note from the grocer stating that the savings is abour $3.00 per pound. According to my mathematical skills that comes to quite a bit more than 5%. Secondly, none of the money-grubbing grocery retailers will reduce their prices when temporary shortages, caused supposedly by weather conditions around the world, are over. Did they reduce their price increases when gas prices went down? Have they reduced their prices in the wake of a rising dollar (which means greater foreign buyig power)? Will they be honourable and reduce their prices a year from now? Of course not. How silly! The retailer gains not only from charging us - the hostage consumers - but also gains by charging absorbitant fees to producers of grocery products in order to even carry their products. How many consumers are aware of this double-dipping?

Dave cleme.
said

Pension increase 1.2%, cost of food increase 5.%,this cost increase does not take into account the increase in the cost of rent, fuel, clothes and utilities to just name a few.

A senior
said

It's high time to address pension income. Pensions have not kept pace with expenses for years now and seniors are having a tough time year after year to suck up these increases. Sure, we could all sell our houses - bringing down the overall value of all houses due to the large increase in houses available- use up all the equity and leave nothing for the next generation. No transfer of any wealth will bring down purchasing power etc. and the spiral spins downwards. Give seniors a decent pension - even with any supplement who can live on $1200 a month????

DanC
said

These comments go to show that consumers have no idea where their food comes from or what it takes to put food on your table. Farmers are struggling to make ends meat (no pun intended) so that you can put as little of your income into filling your faces. No other industry would reduce the cost of their product to the point where, without subsidization, the industry would fall. No other industry thinks "this is great, consumers are using LESS of their money towards our products". The cost of food needs to increase to the point where consumers are actually paying what the food is worth.

Amanda
said

Maybe it's time for everyone to really start growing our own food and putting these gougers out of business. If everyone pulled together as a community and grew a bunch of our own veggies, wheat and built our own geodesic solar greenhouses we wouldn't have to go to the grocery store and pay ridiculously high amounts for our food. Our towns and cities have surplus money that could fund this, and people aren't working so they have time to produce the goods. But people are lazy!Our canadian gov't is profiting from trading and barely has any farmers, when a person actually grows enough food and sells it themselves at a local farmers market, they are fined and shut down by local bylaws. This also should be stopped.

Goldens
said

5%. Whoever says five percent hasn't been to the store lately. Food price continue to rise but the price to the farmer doesn't.. I have been told that margins at the store level have gone from 15% to 55%. Terrible!

Mitch in Kitch
said

These spikes are never temporary. Once they are up, they stay up. why would they bring them down if people are still buying?I'm sorry but a loaf of bread is never worth $4!!

CTV web editor
said

Thanks to all commenters who pointed out the $ error in this story. We apologize for the error and hope you find everything in good order on your next visit to the site.

Greg in Cambridge
said

As consumers, it seems like we're just always shelling out more for everything. If it's not more taxes,higher taxes,new taxes,hidden taxes,higher electricity ( thanks mcguinty),gas prices,insurance and now food up, again. There really has to be an end to this constantly gouging us for more and more.Milk just went up over 10% this week and for what?

Fact Check
said

This may solve the obsesity problem. China is getting rich thanks to Obama. China is buying up the food as they switch to higher protein diets. Buy Canadian or North American it is the only answer and it is patriotic or buy China products then compete against your own dollar.

Harold
said

Food prices have been rising all along. Have you not noticed the packages getting smaller while the price stays the same.That's what I call a sneaky price increase.

J.C.
said

The cost of groceries is already up and it is very difficult for anyone on a fixed income to eat properly as it is. When the cost of groceries go up you also get the side effects of these costs on the health care system as well.

Anonymous
said

My grocery bill has increased approximately $140.00 per month. Fortunately, I make everything for my family. The cost of processed food is outrageous and over the long term affects your body. Although fruits and vegetables are very expensive, they are far better for you than the processed food that's on the shelf. A week's supply of fresh fruits and vegetables can provide the proper nutrition for your family.The people who suffer the most are those that live below the poverty line, such as those receiving social assistance and disability. It's almost impossible for these people to maintain a healthy lifestyle since their take home pay is minimal.

Johnny Canuck
said

5�0tip of the iceberg
said

ANOTHER 5%?? Looked at a loaf of Dempsters bread lately? Same price for a smaller loaf or looked at many cereal boxes lately? Same price but smaller box. Prices have been up for a while now or the quantity is reduced for the same price. Food prices are up far more than 5% and this only adds to the inflation. We now shop food discounters over well known iconic grocers. Savings are substantial. The "Mystery Meat" aisle is always an issue so we get meat at big box stores.

Mke Goldstein
said

"Forecasted"???What book of English grammar are you guys using? The same ones the Americans use, when they state that..."The target has been attrted!"???Please arrange that your grade-school English teacher reads your work, before it's published. Be prepared to go stand in a corner. Are all your editors out having coffee?

George V.
said

Who is kidding who? when food prices go up they stay up, very little if any trckles back to the farmer or the producer, Prices sooner or later will lead to people doing their own canning, or putting to use the old preserve jars. When possible having their own vegetable garden, and when the garden produces to much will share with family and neighbors. It already has lead to people shopping very selectively, closely watching sales and doing without the high ticket items like steaks roasts types of fish.

FSN
said

Maybe CTV should proof read prior to posting on the web. A grocery bill of $600 isn't going to climb to $430, now is???

JS
said

Actually food prices have already gone up. Bread has already shot up substantially. It wasn't that long ago that it was about $2.00 a loaf for a good quality grain bread. Now it is almost $3.00 or more for a loaf of the same bread. Coffee was recently about $6.00 a can, and the same can of coffee is more than $7.00 a can today. Considering the strength in our dollar, these really are huge increases.