Food Prices to Remain Pointed Higher in 2023: Report 



Already struggling under the weight of the highest rate of food inflation in 40 years, Canadian consumers are not expected to see any relief in 2023.  


In fact, the pain is forecast to get even worse. 


Released Monday, Canada’s Food Price Report projects overall food prices will rise by 5% to 7%, or at least another $1,000 in 2023, pushing the annual food bill for a family of four to an average of $16,288.41.  


That compares to a year earlier, when the same report forecast that food prices would rise by as much as 7% to an average of $14,767, the largest predicted annual increase in 12 years. But even that proved to be an underestimation, as actual prices increased by more than 10% on average, mainly due to the Russian invasion of Ukraine and weather-related impacts on harvests around the world. 


Another unforeseen factor in 2022 was the decision by Canada’s central bank to aggressively hike interest rates. While the rate hikes are helping to slow inflation, they have put more pressure on consumers and food-based businesses. 


Canadian food inflation has typically run hotter this year than the overall nation inflation rate, which peaked at around 8% in the summer. 


The report blamed much of the expected increase in food prices in 2023 on rising geopolitical tensions, high transportation costs, high oil prices and a falling Canadian dollar. 


Vegetable prices are expected see the largest increases in 2023, in the range of 6% to 8%, although meat, dairy and bakery items are also expected to see increases of 5% to 7%. Restaurant prices, too, will continue to rise as food outlets contend with rising food costs, rent increases and ongoing labour challenges, the report said. 


“Conflicts in other parts of the world can impact food prices in Canada by restricting trade and exports and disrupting the supply chain,” said price report project co-lead Dr. Simon Somogyi, a professor in the University of Guelph’s Gordon S. Lang School of Business and Economics. “The ongoing war in Ukraine has especially impacted the supply of wheat, fertilizer and sunflower oil, which is widely used in processed foods.” 


Still, there is some good news. There is the possibility for food prices could stabilize or ease later in 2023, as the economy cools and the Canadian growing season comes back online, Somogyi said. 


The annual food price report is jointly prepared by researchers at the University of Guelph, Dalhousie University, University of British Columbia and the University of Saskatchewan. To arrive at their predictions, the researchers used historical data sources but also collaborated with data scientists to integrate machine learning algorithms and predictive analytics tools to strengthen the accuracy of food price predictions across the country. 


The food price report in its entirety can be seen here: 

https://cdn.dal.ca/content/dam/dalhousie/pdf/sites/agri-food/Canada's%20Food%20Price%20Report%202023_Digital.pdf 




Source: DePutter Publishing Ltd.

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