Why Canada’s Food Inflation Goes Before It Goes Good-National

When it comes to food prices, Canadians may have an expensive winter.

Inflation in Canada reached 4.7% in October, the fastest rise in almost 19 years. Food inflation was 3.8% this month, but as Canada and the United States end the growing season for many types of fresh food, Canadians could be further shocked by stickers at grocery stores.

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Food inflation is notorious for its instability. For example, prices can fluctuate significantly depending on the weather.

Michael von Masou, a food economist at the University of Guelph, says it’s not uncommon for agricultural prices to rise by more than 10 percent in winter just because they are imported from farther away.

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However, the roar of supply chains involving world trade complicates the challenge of continuing to supply Canada with unseasonable fruits and vegetables.

Take the blueberries. Shipping from Peru usually takes 10-12 days to arrive in Toronto, says Larry Davidson, CEO of North American Produce Buyers, an Ontario-based buyer and wholesaler of international products.

But lately, Davidson says it takes 20-25 days for the berry container to reach its destination.

“For us, as a receiver, we receive the products that arrive in pain,” he says.

According to Davidson, the causes of delays include a port backed up by a shortage of containers, a shortage of workers to load and unload ships, and a longer than usual wait time for trucks to receive produce.

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One workaround is to fly fresh and perishable produce, which is expensive, says von Masou.

High energy prices also put upward pressure on food costs, he says. This is especially true for agricultural products imported from the United States and other parts of the world where they have to travel long distances, he points out.

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Next is climate change.

“Climate change is a supply chain problem. Production disruptions can have long-term implications for both product supply and price,” says Fonmasou.

Severe droughts in western Canada and the western United States have resulted in lower yields in these areas. As a result, many pastoralists have been forced to liquidate their herds, reducing the supply of animals on the market in the future, according to von Masou.

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Beef prices in October were already 14% higher than they were a year ago, but von Masou believes they could rise to 20% and even 25%, depending on the persistence of the drought. There is.

The British Columbia floods are also having a major impact on Canada’s food supply chain.

Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University, said the main transportation route disruption was milk, eggs, etc., just because farmers in Fraser Valley, BC, currently have no trucks to bring their products to market. Means that you have to dump your fresh food.

“Unfortunately, there is a lot of waste,” he says.

Pedroan Tunes, Chief Economist of the Canadian Conference Committee, said more expensive foods would remove the greatest burden from the budget of low-income Canadians.

“Currently, looking at household balance sheets, we’re in pretty good shape compared to 2019,” he says.

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This also applies to many low-income households, thanks to the COVID-19 Income Support Program developed by the federal government.

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But now that these programs are ending, “inflation is eroding the savings and extra income we find very quickly,” he says.

© 2021 Global News, a division of Corus Entertainment Inc.

Why Canada’s Food Inflation Goes Before It Goes Good-National

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