M. Shahbandeh
Research expert covering agriculture & FMCG
Food price inflation in Canada - statistics & facts
Countries all over the world have experienced a disruption in many aspects of the economy due to both the COVID-19 pandemic and the Russia-Ukraine war. Rising gas prices and food prices are some of the biggest direct impacts felt by consumers. In addition, global supply chain disruptions have impacted the ability to obtain products that are in high demand after the early stages in the COVID-19 pandemic is 2020. With all these factors, consumers are witnessing high inflation rates. The inflation rate for food in Canada reached 10.4 percent in January 2023, its highest level in nearly forty years.
Consumers are not the only ones feeling the pressure of rising prices. Milk prices are set to increase due to the costs that farmers and dairy producers face for farm costs and animal feed. Many commodities used for animal feed have been heavily impacted by the conflict in Ukraine. Coupled with increased gas prices, farmers are pushed to raise their prices. Last year, the average price of yogurt in Canada was three Canadian dollars for 500 grams, but in several provinces, the cost is up to about two Canadian dollars per liter.
Price increases for many products
Across Canada, prices for basic food items have increased. The price of fresh products like fruit and vegetables increased up to 12 percent and had the highest growth after baked goods compared to other food products in 2022. Food prices vary across the Canadian provinces, with the consumer price index (CPI) for food almost 40 points higher in some provinces. However, every province has experienced an increase in the CPI of food purchased from grocery stores. Despite price increases, grocery store retail sales in Canada have been increasing over the past three years.Consumers are not the only ones feeling the pressure of rising prices. Milk prices are set to increase due to the costs that farmers and dairy producers face for farm costs and animal feed. Many commodities used for animal feed have been heavily impacted by the conflict in Ukraine. Coupled with increased gas prices, farmers are pushed to raise their prices. Last year, the average price of yogurt in Canada was three Canadian dollars for 500 grams, but in several provinces, the cost is up to about two Canadian dollars per liter.
Consumer behavior
Canadians have started to adjust their habits because of the price increases, such as eating out less frequently or cutting back on more expensive products like meat, alcohol, or fresh fruits and vegetables. Nevertheless, the annual expenditure per household in Canada is still expected to increase in 2023, with a six-person household expected to spend over 21 thousand dollars per year on food. Many Canadian consumers are also shifting towards locally made or produced products when shopping. Some reasons behind the shift to local products are a higher perceived quality and to be more sustainable. The most common reason, however, is to support local businesses.
