Low Canadian dollar contributes to higher food costs for average Canadian family
HALIFAX, Dec 6, 2016 /PRNewswire/ - Canadians will pay more to put food on their tables in 2017, according to "Canada's Food Price Report 2017." The report forecasts a rise in food prices between 3% and 5% higher than last year's increase and considerably higher than the general inflation rate. For the average Canadian family, food expenses in 2017 could increase by as much as $420. The 7th edition was released today and is published for the first time by Dalhousie University.
"Food prices are top of mind for everyone. Every single day we have to feed ourselves and we're victims of fluctuating food prices," says Sylvain Charlebois, lead author of the report and Dean of the Faculty of Management at Dalhousie University. "Canadians are very engaged consumers when it comes to food. We hope the "Canada Food Price Report, continues to provide them with the information they want, not just about food prices, but about issues around food safety, quality of food, trends and the region in which they live."
Charlebois points to a number of factors contributing to the price increase. "The biggest factor will be the falling Canadian dollar. Given how many food products we import from abroad our food economy is vulnerable to currency fluctuations. We're also expecting the upcoming Trump administration to have an impact on Canada's food prices."
Charlebois says the new administration could create a period of U.S. protectionism aimed at improving domestic issues at the expense of the international community, impacting agri-food and seafood exports. The administration's support of infrastructure and the development of the States next farm bill, may result in subsidies to farmers and increased expenses, which could trigger a super cycle in grain prices and further push food prices higher.
Vegetables, fruits and nuts, are all expected to experience a sharp price rise in 2017, due to the need for imports. Vegetables are expected to increase by 4% to 6% and fruit and nuts by 3% to 5%. Pork, fish and seafood are all expected to see increases in 2017.
Expected Price Increases:
Dairy and Eggs – 2% to 4%
Fruit and Nuts – 3% to 5%
Bakery and Cereals – 0% to 2%
Meats – 4% to 6%
Vegetables – 4% to 6%
Fish and Seafood – 4% to 6%
Restaurants – 2% to 4%
Other food items – 4% to 6%
This is the first time the report has looked at anticipated increases in food prices by province. Both Ontario and British Columbia are likely to have above average increases in food prices. Newfoundland and Labrador, New Brunswick, Quebec, Manitoba and Alberta are likely to experience lower than average, due to a weaker economy and a competitive distribution environment.
"Canada's Food Price Report 2017" also looked at potential food trends for 2017.
"The Celebration of Canadian food as part of Canada's 150 birthday, is something we are sure to see in 2017," says Charlebois. "We'll also continue to see public outcry for safe and all natural foods. Food fraud awareness with consumers will continue and that will be a continuing challenge for industry and regulators alike."
Dr. Charlebois developed the "Canada Food Price Report" while at the University of Guelph and for six years was the lead author. When Dr. Charlebois accepted the position of Dean of the Faculty of Management at Dalhousie University in July 2016, his work on the food price report came with him. Dalhousie colleagues Jay Harris, Vlado Keselj and Colin Conrad, Faculty of Computer Science; Peter Tyedmers and Sarah Chamberlain, Faculty of Management; Megan Bailey, Faculty of Science; and Gary Grant and Simon Somogyi, Faculty of Agriculture, were part of the team this year. This year the team tapped into the data and analytics expertise at Dalhousie University. Using a machine learning model, they imputed a number of variables, including household income, population, unemployment, commodity futures, fuel prices, crude oil prices, and CDN exchange rate.
"It's difficult to predict the future," says Charlebois. "We have to look at all sorts of independent variables in the marketplace. The technology really helps us. But it is the skill set of the team that allows us as advisors to look at those numbers, and use the expertise around the table to determine how we really think those factors will ultimately impact food prices and Canadians."
For more information, read the complete Canada's Food Price Report – 2017.
SOURCE Dalhousie University