Food prices set to rise faster than inflation next year
The price of food is going to go up faster than the overall inflation rate and vegetarians won't be spared the bite to their wallets, one of Canada's biggest agricultural schools says.
The Food Institute at the University of Guelph in Ontario put out its annual report on food prices Tuesday, and it predicts prices for just about everything to rise for the second straight year.
This time last year, the school forecast that prices for 2014 would go up anywhere between 0.3 and 2.6 per cent. As it turned out, that prediction was on the low side, as overall food prices rose 2.8 per cent.
- Higher meat prices in store for Canadian consumers
- As bacon prices rise, packages are getting smaller
Most of that increase came in the prices for meats and fish, which went up by 12.4 per cent and 5.9 per cent, respectively. Meat prices were driven by problems on the supply side, most notably a devastating outbreak of porcine epidemic diarrhea or PED, which led to a huge decrease in the number of Canadian pigs, which translated into price hikes in the neighbourhood of 25 per cent or more for things like bacon and ham.
The hikes in meat prices aren't expected to be quite as large this year, but they'll still go up to the tune of between three and five per cent. Fish prices will provide no relief, as they're forecast to increase by the same amount.
"The damage of PED on the hog supply is fairly short-term and prices will abate by mid next year," the report said.
Across all food types, here's what price increases the University of Guelph says to expect in 2015:
- Meat: 3-5%
- Fish: 3-5%
- Dairy and eggs: -1 to +1%
- Grains: 0-2%
- Fruit & Nuts: 1-3%
- Vegetables: 3-5%
Astute readers will note that the price of vegetables are expected to increase by just as much as meat — meaning vegetarians won't be spared.
The main factor affecting vegetables, as always, will be the weather. But a suddenly weaker loonie is also changing the game. Many vegetables eaten in Canada are imported, which means Canadians can expect to pay more for them because of the weaker dollar.
The weak loonie "will continue to have upward pressure on produce prices on the horizon since produce import levels tend to increase in the winter and spring," the report said.
That could be a good incentive for Canadians to buy more locally grown food, which would save them money and stimulate Canada's economy.
"Due to the nature of produce imports, Canadians will notice the increase in vegetable prices in the winter months, or perhaps later in the year," the report said.
All in all, food prices have increased by about 35 per cent since 2004, the report said.