Canada’s Food Price Report 2021 – annual food expenditures could rise by as much as $695
The 11th annual edition of Canada’s Food Price Report forecasts an overall food price increase of 3 to 5% for 2021. The most significant increases are predicted for meat at 4.5 to 6.5%, bakery at 3.5 to 5.5%, and vegetables at 4.5 to 6.5%. For the first time, the report is a cross-country collaboration, jointly released by long-time research partners Dalhousie University and the University of Guelph, as well as the University of Saskatchewan and the University of British Columbia. This year’s report is more robust than ever, with national expertise and collaborations between economists and data scientists strengthening the accuracy and interpretation of price forecasts and reflecting the regional differences in the Canadian food system.
This year’s report also takes into account the diversity of Canadian families by calculating average food expenditure by individual consumer based on age and gender, rather than for an ‘average’ Canadian family. For example, based on a family including a man (age 31-50), woman (age 31-50), boy (age 14-18) and girl (age 9-13), the annual food expenditure is predicted to be $13,907 in 2021, an increase of up to $695 (5%) compared to 2020.
“Families with less means will be significantly challenged in 2021, and many will be left behind,” says Dr. Sylvain Charlebois, project lead and Director of the Agri-Food Analytics Lab at Dalhousie University. “Immunity to higher food prices requires more cooking, more discipline and more research. It’s as simple as that.”
The COVID-19 pandemic led to border and facility closures, shifting consumer demand and unemployment, as well as modifications in production, manufacturing, distribution and retailing practices to enhance safety — all of which impacted food prices. An oil price war and the devaluation of the Canadian dollar were also significant factors.
Dr. Simon Somogyi, project co-lead and Arrell Chair in the Business of Food at the University of Guelph, was most surprised by the increase in the price of vegetables and has some advice for consumers. “Health Canada wants us to eat more vegetables and that’s going to be harder. Hopefully when the Canadian growing season comes online in summer 2021, prices will soften and more families will have access. When folks go to the grocery store, they should have a look in the frozen food aisle, particularly for peas, broccoli, carrots and corn. Frozen vegetables are snap frozen just after harvest, so their nutrients are locked in. They can be just as nutritious as fresh vegetables, but at a lower price.”
Last year’s report predicted the average Canadian family would spend up to $12,667 on food in 2020. Based on the 2020 inflation rate to date, this figure is likely to be closer to $12,508, largely because consumers ate at restaurants less frequently.
“The COVID-19 pandemic will potentially have long-lasting effects on Canadians’ relationship to food,” explains Alyssa Gerhardt, a PhD Student in the Department of Sociology and Social Anthropology at Dalhousie University who worked on the project. “We’ve seen more demand for online services in both food retail and food service, an increase in Canadians gardening and preparing meals at home and renewed interest in local food supply chains.”
While the impacts of the pandemic and the uncertainty that accompanies it will continue into 2021, Canadians can be confident in their food supply. “Canada has one of the safest food systems in the world that has, over the past 10 months, shown just how resilient it is when it comes to responding in an efficient and timely fashion to ensure that consumers are guaranteed a constant provision of safe, nutritious food products,” says Dr. Stuart Smyth, project co-lead and Agri-Food Innovation and Sustainability Enhancement Chair at the University of Saskatchewan.
Dr. James Vercammen, project co-lead and Professor in the the Faculty of Land and Food Systems and the Sauder School of Business at UBC, agrees. “With the exception of some short-term hoarding of high-demand food products, the various food supply chains continue to function remarkably well. But consumers need to understand that Canada imports a sizeable fraction of its fresh fruits and vegetables from the U.S., Mexico and other countries. The potential exists for significant disruptions in these imports if there is a second wave of the COVID-19 pandemic.”
Food price factors to watch for in 2021 include the continued impact of COVID-19, the effects of climate change, the growth in e-commerce and online services, the continued loss of the food manufacturing sector, the national ban on some single-use plastics and the impact of the U.S. presidential election on food policy and the Canadian dollar.
The research team uses historical data sources, machine learning algorithms, and predictive analytics tools developed over many years to make predictions about food prices in Canada. This year’s research team included Dalhousie University colleagues Vlado Keselj, Stacey Taylor and Mitchell Kane (Faculty of Computer Science); Kathleen Kevany, Stefanie Colombo and Janet Music (Faculty of Agriculture); Elizabeth Fitting and Karen Foster (Faculty of Applied Social Sciences); and Don Fiander (DalAnalytics). University of Guelph researchers included Erna Van Duren (Gordon S. Lang School of Business and Economics), Paul Uys (Ontario Agricultural College), Jess Haines (Family Relations and Applied Nutrition), Graham Taylor (School of Engineering) and Ethan Jackson (Vector Institute & School of Engineering), and Maria Corradini in Food Science. They were joined by University of Saskatchewan’s Rim Lassoued (Agricultural and Resource Economics) and University of British Columbia’s Kelleen Wiseman and Richard Barichello (Faculty of Land and Food Systems) and Matias Margulis (School of Public Policy and Global Affairs).
Photo: Farm Credit Canada