Big Bite: How to combat high food prices

The Calgary Eyeopener's Big Bite explains why your food costs have skyrocketed twice the rate of inflation and what you can do about it.

The Calgary Eyeopener explores why food costs have risen and what to do about it

Economist Lindsay Tedds explains why prices are spiking and looks at the effect it has on families. 2:14

We don't need to tell you that food prices are up.

You feel it every time you see that pound of beef scanned at the grocery store, and don't expect a break anytime soon — food prices are going nowhere but up.

For our series Big Bite, we look at how this affects Calgarians and what you can do to keep your costs down.

This issue will be explored all week on the Calgary Eyeopener and CBC Calgary's website. We'll hear tips from a thrifty shopper on how to get your food costs down, a cattle rancher on soaring beef costs and how the Calgary Drop-in Centre has changed its food habits.

We asked Calgarians how they're coping with their rising grocery bills. 1:01

To understand up, look down

You can explain the rising costs primarily by looking south, according to Lindsay Tedds, visiting professor at the University of Calgary's School of Public Policy.

Lindsay Tedds is an economics professor at the University of Calgary and scientific director of fiscal and economic policy at its School of Public Policy. (CBC)

"The biggest driver in food prices over the last year has been the decline in the exchange rate with the American dollar. Because we import most of our food from the United States, the decline leads to increases we see in the grocery store," she said.

The single largest increase in food prices is with beef, which has skyrocketed 40 per cent over the past five years.

There are many reasons for that: supplies are tight after many ranchers reduced their herd sizes after the BSE crisis, the drought has forced the cost of hay to go up and the costs of running a cattle operation (machinery repairs, land purchases) are also up.

Tedds says although families are seeing food take up a bigger part of their monthly budget, it's single and non-working Calgarians who really feel the pain.

"People at the low-income spectrum are just not able to afford the transportation costs to go out and buy foods in bulk. They tend to be income constrained so that they can only buy small amounts of food at a time. And the smaller amounts that you buy, the more you pay per unit price."

Rising food costs are having an impact of Canadians across the country. Here is a look at the increase from last year, according to Statistics Canada. (CBC)

Doesn't leave bad taste for everyone

There are benefits to the rising cost of food, according to Sylvain Charlesbois of the University of Guelph's Food Institute.

Charlesbois says stores are reinvesting their profits into stores, creating a "better in-store experience."

He says quality is also improving.

"Higher food prices have allowed the industry to refocus on quality and that's why you're hearing of a lot food processors get rid of artificial flavours and putting in natural products."

Charlesbois refers to the recent decision by McDonald's to only use eggs from cage-free chickens for its Egg McMuffins as a game-changer.

"Consumers are willing to pay more. They actually value better practices."

When food prices are too low, it chokes local processors out of the game, which ultimately leads to increasing prices.

"Between 2004 and 2009 when prices were much lower, we actually lost 150 manufacturing plants in the country."

Charlesbois, who currently lives in Austria where people spent upwards of 20 per cent of their household budget on food (compared to Canada's 9.5 per cent and 6.5 per cent for Americans), says Canadians should expect food prices to keep rising, though at a "modest rate."

A look at the Consumer Price Index since 2010. (CBC)


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