Canadian families will pay $1,065 more for groceries in 2023, report says

HALIFAX –

Canadians will not escape meals inflation any time quickly.

Food costs in Canada will proceed to escalate within the new 12 months, with grocery prices forecast to rise as much as seven per cent in 2023, new analysis predicts.

For a household of 4, the whole annual grocery invoice is anticipated to be $16,288 — $1,065 greater than it was this 12 months, the thirteenth version of Canada’s Food Price Report launched Monday mentioned.

A single lady in her 40s — the typical age in Canada — can pay about $3,740 for groceries subsequent 12 months whereas a single man the identical age would pay $4,168, in keeping with the report and Statistics Canada.

Food inflation is ready to stay stubbornly excessive within the first half of 2023 earlier than it begins to ease, mentioned Sylvain Charlebois, lead writer of the report and Dalhousie University professor of meals distribution and coverage.

“When you look at the current food inflation cycle we’re in right now, we’re probably in the seventh-inning stretch,” he mentioned in an interview. “The first part of 2023 will remain challenging … but we’re starting to see the end of this.”

Multiple components may affect meals costs subsequent 12 months, together with local weather change, geopolitical conflicts, rising power prices and the lingering results of COVID-19, the report mentioned.

Currency fluctuations may additionally play a job in meals costs. A weaker Canadian greenback may make importing items like lettuce dearer, for instance.

Earlier this 12 months the loonie was price greater than 80 cents US, however it then dropped to a low of 72.17 cents US in October amid a strengthening U.S. greenback. It has hovered close to the 74 cent mark in latest weeks, ending Friday at 74.25 cents US.

“The produce section is going to be the wild card,” Charlebois mentioned. “Currency is one of the key things that could throw things off early in the winter and that’s why produce is the highest category.”

Vegetables may see the most important worth spikes, with estimates pegging value will increase will rise as excessive as eight per cent, the report mentioned.

In addition to foreign money dangers, a lot of the produce offered in Canada comes from the United States, which has been battling extraordinarily dry situations.

“The western U.S., particularly California, has seen strong El Nino weather patterns and droughts and bacterial contaminations, and that’s impacted our fruit and vegetable suppliers and prices,” mentioned Simon Somogyi, campus lead on the University of Guelph and professor on the Gordon S. Lang School of Business and Economics.

“The drought is making the production of lettuce more expensive,” he mentioned. “It’s reducing the crop size but it’s also causing bacterial contamination, which is lessening the supply in the marketplace.”

Prices in different key meals classes like meat, dairy and bakery are predicted to soar as much as seven per cent, the researchers discovered.

The Canadian Dairy Commission has permitted a farm gate milk worth enhance of about 2.2 per cent, or simply beneath two cents per litre, for Feb. 1, 2023.

“The increase for February is reasonable but it comes after the unprecedented increases in 2022, which are continuing to work their way through the supply chain,” Charlebois mentioned of the 2 worth hikes of practically 11 per cent mixed in 2022.

Meanwhile, seafood is anticipated to extend as much as six per cent, whereas fruit may enhance as much as 5 per cent, the report mentioned.

Restaurant prices are anticipated to extend 4 to 6 per cent, lower than grocery store costs, the report mentioned.

Rising costs will push meals safety and affordability even additional out of attain of Canadians a 12 months after meals financial institution use reached a report excessive, the report mentioned.

The rising reliance on meals banks is anticipated to proceed, with 20 per cent of Canadians reporting they may possible flip to group organizations in 2023 for assist feeding their households, a survey included within the report discovered.

Use of weekly flyers, coupons, bulk shopping for and meals rescuing apps additionally ticked up this 12 months and is anticipated to proceed rising in 2023, the report mentioned.

“We’re in the era now of the smart shopper,” mentioned Somogyi, additionally the Arrell Chair within the Business of Food.

“For certain generations, it’s the first time that they’ve had to make a list, not impulse buy, read the weekly flyers, use coupons, buy in volume and freeze what they don’t use.”

Last 12 months’s report predicted meals costs would enhance 5 to seven per cent in 2022 — the most important bounce ever predicted by the annual meals worth report.

Food prices truly far exceeded that forecast. Grocery costs had been up 11 per cent in October in contrast with a 12 months earlier than whereas total meals prices had been up 10.1 per cent, in keeping with Statistics Canada.

“We were called alarmists,” Charlebois mentioned of the prediction that meals costs may rise seven per cent in 2022. Critics known as the report an “exaggeration,” he mentioned.

“You’re always one crisis away from throwing everything out the window,” Charlebois mentioned. “We didn’t predict the war in Ukraine, and that really affected markets.”

This report by The Canadian Press was first revealed Dec. 5, 2022.