Rising Food Costs : Resulting From COVID-19

Increased food prices in Canada, 2021. Getty Images

"What impacts food prices is essential to so many different aspects of our existence."

"We talk about consumer demand, the rights of workers, fluctuations in exchange rates, plastics, waste. The way we get food itself is influenced by so many different things. But we all recognize that price is important."
"Our biggest increase that we predict is 4.5 to 6.5 percent for vegetables. And that range is even a little bit conservative -- during the coming winter, prices could b e higher than that."

"But people can remember that for a lot of the fruits and vegetables that can be bought from the frozen aisle -- peas, corn, carrots, berries -- they may not taste as good, they might not look as good, but they've been snap-frozen at the point of harvest."

Professor Simon Somogyi, Arrell Chair, Business of Food, University of Guelph

Frozen fruit/vegetables just as nutritious, cheaper. Getty

"This was the most work I've put into a report ever. We soon realized that this was going to be a complicated year, and felt early on this was the year to expand our breadth of knowledge [by involving institutions from the West]."

"Early on this year, beef was the big story, then pork went up a little bit and now it's chicken. The main driver is cost."

"Because as soon as you take California off the table, it tends to get more expensive."

Sylvain Charlebois, director, Agri-Food Analytics Lab, professor, Dalhousie University

The big story for the consumer market this winter and perhaps through 2021 is for perishable products without which humanity cannot exist; the cost of food, fresh produce and fresh protein-source products are on the rise, and it was inevitable in this time of a global pandemic when labourers like field workers are more difficult to find, farmers historically dependent on work-visa-driven workers from abroad when a new virus has become transportable with ease and the focus is on closed borders. That, in conjunction with extreme weather events in an era of twin disasters; environmental change and a global pandemic.

Governments and their public-health arms everywhere are struggling to contain the SARS-CoV-2 virus causing COVID-19, and problems with transportation, just-in-time warehousing and food delivery have been vastly complicated. Populations are faced with diminished employment, vanished savings in a battle to stay economically afloat leading to reduced spending power which a significant rise in food prices will serve to impact to an even deeper degree. Food banks and charities are appealing as never before for those who can, to charitably contribute so that their neighbours can set a table with food for their families.

 

The price of the average family grocery bill is expected to rise next year at its fastest pace since food professor Sylvain Charlebois started keeping track of them 11 years ago. (Carlos Osorio/Reuters)

 

In North America, wildfires in California, outbreaks of COVID-19 at meat processing plants, closed borders and lockdowns closing restaurants, and the recognition of grocery store employees as facing hazardous work conditions in infection potential leading to bonus pay, have all contributed to rising food prices. Canada's Food Price Report for 2021 now forecasts an overall increase of food products between three and five percent -- where a family of four as an example will spend $13,907 next year for food, representing an increase of $695 over last year. 

The report's authors recognizing the challenges this year's costing presented, deciding to augment contributors to the report beyond the authors and advisers from Dalhousie University and the University of Guelph, to include collaboration from the University of Saskatchewan and the University of British Columbia for the 11th annual report predicting the state of food availability and prices in Canada for the coming year.

The most average  household in Canada now is recognized to be one-person households where one in six adults live alone. From there all variations of family size and combinations will be impacted by increased prices for food. Overall pricing is expected to be increased by up to five percent in the coming year, while the report's authors anticipate  a number of food categories will reflect even grater increases in cost: bakery for example, up to 3.5 to 5.5 percent; meat, 4.5 to 6.5 percent; and vegetables, 4.5 to 6.5 percent in price increases.

 

Shoppers line up for groceries in Toronto on Saturday, November 21, 2020. THE CANADIAN PRESS/Frank Gunn

 

Growing demand for bakery products is projected as driving the increase in that category, w8ile meat is recognized as being cyclically impacted on price variations. The rapidly changing system of food access and delivery over the past 11 months has made forecasting prices of food "incredibly difficult", notes Dr. Somogyi, given that the pandemic has impacted all aspects of the food supply chain. In particular, food service, where Canadians typically would spend 38 percent of their food budgets, has declined as a result of lockdowns.

In the spring of 2020 food service declined to nine percent of food budgets, in reflection of restaurants having to close to interior food service and switch to take-out. Now, according to the report, the estimated food service spending has risen again to approximately 26 percent with no expectation that it will rise further to its previous level, in 2021. Grocers, restaurants and suppliers have been forced to invest in e-commerce "resulting in a more democratic and open food supply chain", where their increased costs of operation will inevitably be passed on to the consumer.