For the past three or four months, the recognised experts have been predicting a continued rise in food prices through the spring. The first signs of a plateau – let alone a decrease – were expected to show up in late summer or fall of this year…
Is the cart half full or half empty? It amounts to the same thing.
The vast majority of Canadians are buying (and eating) less
meat and fresh produce as food prices continue to rise…
Hoped-for price relief nowhere in sight
That marginally hopeful scenario, of course, depended on further reductions in overall inflation over the next 9 months. But the latest food price forecast says that’s not likely to happen. Oddly, the general inflation rate is expected to remain stable or continue to fall slowly over the period.
In spite of recent high-level consultations between the federal government and top tier food industry executives, no solutions have been found to the food price crisis.
Theory of ‘compounding’ vindicated
As an aside, I am gratified that certain economists and others have come out in support of my theory. I recently suggested that food prices will continue rise to due to compounding. That was also the reason put forward by economists in the talks between the feds and supermarket titans a few weeks back. But compounding didn’t get a lot of play in the news because the word of the day then was ‘greedflation’. Slick, snappy, sexy, and with hard connections between food prices and supermarket greed…
To further weaken the position of those who supported the supermarket side, one witness after another demonstrated that retailers’ profits didn’t increase on a percentage basis, even though the raw prices numbers continued to rise. That, of course, ties right into the compounding theory, but…
The cold, hard numbers
The Agri-Food Analytics Lab at Dalhousie University, in collaboration with authors and advisors from several reputable Canadian universities and research institutions, calculated annual food price increases for the period ending last September as follows:
The same group is forecasting total 2023 food price increases as follows:
Food prices will continue to rise
“We were hoping to have better news for Canadians, given the difficulties experienced in 2022, but our models tell us a different story,” the Dalhousie report states.
“At 7 percent, our forecast a year ago was considered by many to be alarmist, yet here we are with a food inflation rate above 10 percent,” this year’s report admits. “Like 2022, we anticipate 2023 to be challenging for Canadians at the grocery store, especially for households with lower means.”
The report says fresh produce prices will rise fastest of all food categories through 2023.
My take
The increased increases in food prices forecast in the latest Dalhousie Report are no less than I expected and no more than I had hoped for. If you adhere strictly to the compounding theory, prices won’t have a chance to fall until overall inflation begins to subside faster the compounding rate. Who knows when that will happen.
~ Maggie J.