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Stress baking, restaurant closures and the price of oil: the factors impacting your food bill right now
A grocery store worker restocks limes in the produce section.
VANCOUVER -- With empty shelves, line-ups outside grocery stores and runs on yeast and toilet paper, many are wondering if the food supply chain in Canada is sturdy enough to weather COVID-19 without any major disruptions.
“If the world runs out of food, the last country to run out of food is probably going to be Canada,” says Sylvain Charlebois, the director of the Agri-Food Analytics Lab at Dalhousie University. “And you can quote me on that. We’ve got plenty of food.”
In a new Food Price Report released Tuesday, the lab shared an update to the food cost projections it made last year. And it found while costs may not jump significantly, we will see a few changes.
“There are disruptions in the supply chain of course, but the question I get is whether or not we’re going to run out of food – and the answer is absolutely not. But you shouldn’t be expecting perfection either,” Charlebois says.
A weak Canadian dollar, major changes in buying habits, the price of oil and so many more people cooking at home while in isolation are all having some impact on food. But when the lab made its food cost predictions last year, it expected 2020 to see a four per cent rise overall - and that’s going to stay the same, despite COVID-19.
“We are expecting meat prices to go up as much as six per cent, and this is something we were forecasting in December,” Charlebois says. “The Canadian dollar, because it is weaker now, we are expecting produce, particularly vegetables, to be more expensive. So we’ve revised our forecast for produce and the same for bakery (products) just because access to ingredients will be challenging. People are baking more and we are expecting prices to impact bakers overall.”
Dalhousie’s lab found that while food prices are not expected to increase any more than already predicted this year, 2021 could be a different story. Those projections will be made in the fall.
‘Extreme pressure’ on grocery stores
Right now, the food retail and processing sectors are under “extreme pressure” to change many of their practices. Grocers have had to hire extra staff and raise wages, step up cleaning efforts, and in many cases install plexi-glass to protect consumers and employees.
They’re also forced to limit the number of people coming into stores, and while Charlebois says more than 50 per cent of Canadians are actually actively trying to avoid the grocery store, the demand has still increased.
Many restaurants could close permanently
Meanwhile, the food service industry, which used to make up a whopping 40 per cent of the entire food sector, has virtually evaporated overnight.
“Because people are spending more time at home, we all become different food consumers,” he says. “And so it is absolutely unreasonable, as far as I’m concerned, to expect shelves to be full everywhere all the time across the country – it’s just not reasonable right now to think like that.”
When restaurants do open back up, Charlesbois says menu prices could drop up to two per cent, which is great for the consumer but a symptom of the sector’s current ills.
“Restaurants close and open all the time, but of course COVID will probably create a huge wave of closures over the next little while for sure, unfortunately.”
Price-gouging not expected
He adds that despite the increasing pressures on grocery stores, the lab is not expecting price-gouging to become an issue in Canada, despite consumer anxieties. Social media shaming has such an immediate, deleterious impact on grocers that the risks are just too high.
Charlebois says with so much happening at once, it’s no wonder the stores are struggling to keep up.
“Be patient. Food will come. And if the product is not there that you’re looking for and that’s the product you need, come back the next day. I suspect that the product will be there.”