We have some good news and some bad news.
Late last year, Canada’s Food Price Report revealed food prices were expected to rise above the acceptable inflation rate in 2017, climbing three to five per cent (and costing Canadians an extra $420 a year in groceries). Now, the mid-year Food Price Report indicates that the climb won’t be quite so high (three to four per cent), but that meat products might cost consumers a few extra dollars.
In fact, the report, published by Dalhousie University, suggests meat prices could increased by seven to nine per cent.
According to the report, farmgate prices for cattle have gone up 15 per cent on average, but have not yet affected beef retail prices. However, the report notes, researchers observed that some cuts have increased in by as much as 20 per cent in price since January.
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For that reason, researchers are expecting consumers to start absorbing the increased costs next year.
“We do not expect beef prices to be affected until early 2018,” the report reads. “It is slightly the same story for hog futures, but so far pork prices have not been affected. Unlike beef, we could see pork prices at retail rebound much sooner. Perhaps as soon as early fall. Chicken is expected to remain steady for the remainder of the year. “
Interestingly enough, the food price increases noted in the report don’t quite jive with those laid out in the Consumer Price Index (CPI). According to researchers, the CPI is already naturally imperfect and appears to be inaccurate in regard to this year’s food inflation.
“According to recent reports, since January food inflation has run anywhere between 0.1 per cent to 0.3 per cent per month. But with several price spot-checks around the country, food inflation in Canada could in fact be much higher than what is being reported by Statistics Canada,” the report reads.
The report notes that CPI data released since September 2016 indicates food prices have either dropped or have remained somewhat stable. However, Dalhousie collects data a little differently.
“Back in January, Dalhousie University recorded prices of over 100 randomly selected food products from several stores that may not normally be captured by the CPI. Meat products are generally higher by more than 11 per cent when compared to January prices,” the report reads. “Striploin grilling steak, lean ground beef and pork sirloin chops roast are all much higher.”
The report also notes that produce prices are up in most stores, with blueberries, lettuce, pears, and broccoli increasing nine per cent in price since January. Several grocery products are also higher priced than at the beginning of the year, but prices seem to have softened in the dairy and fish categories.
“This non-scientific survey suggests food prices in grocery stores may have increased by more than five per cent over the last five months or so, which is a sharp contrast to what is being reported,” the report reads.
As far as major increases go, the report says that lettuce is “this year’s cauliflower.” Researchers noted that the price of lettuce spiked in April and May due to rain in the typically drought-ridden California area.
There is also a chance that the fluctuating Canadian dollar could impact prices, but that impact remains to be seen.
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