The 11th annual Canada’s Food Price Report forecasts an overall price increase of three to five per cent for the upcoming year — which equates to roughly $695 per household. Dalhousie University, along with  24 collaborators from multiple universities, published the report which predicts the most significant increases in food prices will be in the meat, bakery, and vegetable sectors.

“There’s nothing wrong with food inflation — the challenge of course, is to measure whether or not the food inflation rate will outpace the general inflation rate, and 2021 won’t be an exception unfortunately,” says Sylvain Charlebois of Dalhousie University, one of the co-authors of the report, in the interview below.

The meat, bakery, and vegetable categories will be the main drivers of the price increase and, as Charlebois explains, breads and pastries represent about 11 per cent of expenditures at retails — not as much as meat, which follow an explainable price pattern — but that that’s actually quite a lot.

Why would the bakery category drive price increases, even when wheat prices are still so low? What happens at the farm gate is not necessarily reflected in retail prices, says Charlebois. “It’s a cycle thing, our models are telling us that we’re about to see a new cycle — the last time we saw this was in 2008,” he says. Although, the model and researchers weren’t aware that there was a price-fixing scheme in place then.

As for the vegetable category, many are imported from other parts of the world, such as the U.S., and the wildfires in California really affected the harvest. Importers are looking to other countries, which could mean more expensive vegetables from elsewhere.

“You never know what’s going to happen but hopefully the dollar can stay between $0.75 and $0.78, and if it does then we should be ok, if it doesn’t then you should expect to visit the frozen food aisle a little bit more often,” says Charlebois.

The report does not explore the impact carbon taxes may have on the retail price of groceries, though some are asking if the increased cost of packaging, logistics, and transport because of carbon pricing, may be factoring in to prices.

Within the report, the effects of food price hikes as it impacts different family structures shows more serious implications for low-income families, and less so for single people, which make up 26 per cent of the population.

Listen in on the full conversation for more on the complexities of this year’s study and how COVID-19 will affect the upcoming year:

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