Nfld. & Labrador

Food producers in N.L. struggling to adapt and survive amid 'astronomical' increases

While everyday consumers have been feeling the cumulative effects of price increases at the grocery stores, the volatility has been especially painful for food producers in Newfoundland and Labrador.

From flour and fuel to plastic trays, prices are skyrocketing

The Dark Tickle Company has been around for more than 100 years, and has reinvented itself to stay alive after events like the cod moratorium. Recent price increases have left the company struggling to make a profit. (Submitted by Kier Knudsen)

Skyrocketing prices in just about every category of life have been a source of pain and frustration for most people in recent months, but for people producing and shipping food around the province, it's been devastating.

Roxanne Weinheber used to be concerned about small increases once or twice a year on staples like sugar and flour. But now, the owner of Chatman's Bakery in the Terra Nova community of Charlottetown, is dealing with daily increases that make her head spin.

"A few years ago if you saw an increase of four per cent come across your desk you'd be like, 'Oh my gosh, four per cent.' Now four per cent is a joke," she said. "Now it's daily. It's just astronomical and amazing."

For those who buy flour in huge amounts, the price increase over the past few months has been tough to absorb. (CBC)

Chatman's Bakery makes cookies and other baked goods from scratch with family recipes. It buys flour in bulk, which has gone from about $20 a bag, to around $26.50. A bulk package of eggs has nearly doubled, from $39 in December to $71.50 in recent weeks. Plastic containers for the cookies went from their usual 50 cents apiece to $1.06.

Then there's the cost of shipping. Chatman's sell to retailers around the province and as far away as Ontario. Even before the cost of goods went haywire, Weinheber said she was at a disadvantage just because of geography. Shipping goods from an island has always been expensive, but it's becoming unrealistic as fuel prices soar.

"To compete outside the province, it's a struggle," she said. "Being on an island, the freight to get on and off throws us out of the ballpark anyway. Now with such increases, it's so difficult to even compete."

The cost of everything involved in baked goods, from flour and sugar to plastic trays, is on the rise. (CBC)

The cost of fuel is also wreaking havoc on her workers. Chatman's Bakery had a hard time finding enough workers during the pandemic and turned to Canada's foreign worker program to stay afloat. However, the three workers brought in from outside the country were immediately offset by three employees who could no longer afford to commute to Charlottetown.

"We actually lost staff who were full-time staff, who just can't afford to drive back and forth so they took seasonal jobs in their own community. The impact is sad. It's just sad."

Weinheber said most people wouldn't connect global problems, such as global oil production or the Russian invasion of Ukraine, to the price of bread in rural Newfoundland, but it all factors in.

Rural businesses feeling the hurt

On the tip of Newfoundland's Northern Peninsula, the Dark Tickle Company is also wondering how it's going to turn a profit on its products this year. In fact, owner Kier Knudsen is pretty sure the company founded by his grandfather in 1919 will break even at best.

"The price of everything has inflated," he said. "From the price of sugar, to the price of bottles and jars we put our jam in."

The cost of jars has gone up 50 per cent in two months, Knudsen said. Sugar used to cost about $24 per kilogram, but now it's up over $30.

The Dark Tickle Company ships its ice cream from the Northern Peninsula to St. John's every year. Those trips are going to cost a lot more this summer. (Submitted by Kier Knudsen)

Diesel, however, is the biggest killer. Being a rural business, they have to truck all their inputs north before sending the finished products south again. The company also owns a truck to transport its ice cream to St. John's. A trip used to cost about $1,600 return. Now it's going to be nearly $3,000.

"I don't even know how we're going to pull it off, to be honest with you."

There are benefits to being an old family business, Knudsen said. They don't have to balance these increases with a mortgage or any startup costs like a new business would have to incur.

"That's who I feel sorry for. We've got young couples that are throwing all their savings into a small business.… It must just be a nightmare."

Read more from CBC Newfoundland and Labrador

With files from Leigh Anne Power

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