Food prices expected to increase slightly next year

While food prices are expected to stay relatively stable in the upcoming year, shoppers can expect to see an increase when it comes to meat, grains and vegetables.

Overall food expenditures for 2015 are predicted to increase from .3 per cent to 2.4 per cent, says the University of Guelph’s annual Food Price Report.

Impacting on prices will be catastrophic weather conditions, the declining loonie, and energy costs, which have been in decline in recent months and might help mediate prices for imported produce.

The shrinking Canadian dollar will account for rising prices on organic foods and juices, says the report.

Droughts in California and Brazil will push retail prices upward on imported fruit and coffee, while dry weather in southeast Asia has boosted costs of cooking oils.

“Global issues are affecting Canada more than ever,” said Dr. Sylvain Charlebois, lead author of the report.

Last year Canadian food prices rose 2.8 per cent, with the greatest increases in meat (12.4 per cent ) and fish ( 5.9 per cent.) Bacon, steak and shrimp in particular are expected to see significant increases this year, and as shoppers push for sustainable products, we can expect to see meat and  fish prices rise between three and five per cent.

Charlebois notes that while consumers are particular with their food choices, so are food distributors. The result, he says, is more global sourcing and “ in processing, packages and portions will likely continue to shrink.”

The study points out that some consolidations in the past year. Metro’s purchase of Première Moisson, Agropur's purchasing of plants and Loblaw’s acquisition of Shoppers, for example, would lead to stabilization in the competitive food marketplace and help keep prices in check.

The study says it expects dairy and egg process to remain stable. Increased competition, not only from Walmart, Target and Costco, but pop up farmer’s markets, increasingly popular with consumers, will also help steady prices.

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

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

The report suggests the falling Canadian dollar calls for co-operation with government to help ensure favourable environments for food production as well as encouragement for Canadians to eat local produce.