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We can expect food prices to continue to outpace inflation

Fall harvest season means there are plenty of fresh, local food choices in the stores, farmers’ markets and at roadside stands, typically at the lowest prices of the year. But we’re generally seeing higher food costs, with more increases on the horizon as we head into the winter months.

The coronavirus pandemic had already pushed prices up – even higher when the cost of delivery is added in as many of us were in lockdown at home – and the fires burning across much of the U.S. west coast, particularly in California, bode ill for both the price and availability of produce over the winter.

Canada’s Food Price Report for 2020 had early on predicted food prices to jump two to four per cent this year – bringing the predicted annual cost of food for the average Canadian family to $12,667, an increase of $487 over 2019 – but that was revised upwards to at least four per cent as we settled into the pandemic response.

Those increases will add to food costs that typically outstrip inflation each year: we now pay about 240 per cent more for food than we did 20 years ago, for instance.

Such above-inflation price hikes are what we’ve seen in recent years, with some grocery items taking big jumps. Meat has certainly been one of those items, often leading the price increases. (The latest consumer price index figures from Statistics Canada show food prices were the leading contributor to inflation.)

Other factors to watch for include the price of oil – transportation costs are a key part of the equation, particularly with imports – and the value of the Canadian dollar. We can also expect online orders and delivery charges to increase the cost of food.

Restaurants have been among those businesses hardest hit by the COVID-19 measures, with the drop in the number of patrons having a direct impact on farmers, agri-food producers and supermarkets, all of whom were forced to deal with supply chains and shifting consumer demands. That, too, came at a monetary cost.

Throw in all the uncertainty in the U.S. – from electoral upheaval to climate-related crises such as wildfires, hurricanes and flooding – and food prices may take yet another hit.

While consumers won’t be turning cartwheels over higher prices, there is a silver lining if it leads to greater health in the farming sector. That’s a big if, however, as farmers don’t always share in the revenues generated by increased supermarket pricing.

Yo-yo pricing, at times lower than the cost of growing crops, has wreaked havoc in the industry. It has also led to all kinds of government subsidies and support programs, which we all pay for indirectly. Although farmers feel unloved by governments – witness the increasing tendency for protests – casual onlookers may figure plenty is being done for the agricultural sector, but Canadian producers facing a volatile marketplace don’t see anything like the support offered by the governments of two major competitors, the U.S. and European Union, where subsidies amount to tens of billions of dollars.

Government money should be directed toward longer-term strategies to keep the agricultural sector alive and kicking, rather than going to emergency aid for a sector that seems to be lurching from crisis to crisis.

For most urban dwellers, food is something found on store shelves – how it got there is the same kind of mystery behind the lights turning on when they flick a switch. In Woolwich and Wellesley townships, straddling the divide between rural and urban, agriculture remains an everyday part of life. We know that if farmers prosper, rather than middlemen, we could all benefit.

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