Food prices rising as 10% of household budgets, but historically low from 25% of budget 30 years ago. We know that cost, should we think about value?
Video: Canadian food prices jump 4.8%
Canadians, on average, devote about 10 per cent of their household budgets to food, a share that has ebbed from three decades ago when it was about a quarter, according to Sylvain Charlebois, associate dean and professor of food distribution and policies at the University of Guelph.
He, too, expects it will now eat up a larger share.
“The era of cheap food has ended,” he said. “What we’ve seen over the last few years is the start of a new era, where consumers will be compelled to invest in their nutrition.”
Much of the recent increase in prices stems from a lag effect, he added. Increases in raw-material prices typically take six to nine months to show up at the consumer price level. Thus, hot commodity prices from the spring may be playing a role in November’s price increases.
Food and gasoline costs may be the most visible signs of inflation for Canadians – but other costs are escalating too, from financial services to tuition and airfares. Overall inflation stayed at 2.9 per cent last month. For the year, it’s on track to post its biggest annual gain in 20 years.
Basic food items are running much hotter than they were a year ago. Egg prices rose 12.3 per cent from a year ago, their fastest pace since 1981. Potato prices are 20.3 per cent higher, a jump industry experts peg to lower yields after a wet spring in the Maritimes, Ontario and Manitoba.
Global shifts are also showing up. Restrictions on exports in a range of countries – from Argentina’s soybeans to Vietnam’s rice and Russia’s wheat – are driving world food prices higher, and that’s also contributing to higher prices in Canada, said Ryan Cardwell, associate professor in agricultural economics at the University of Manitoba.
Statistics Canada November reports cited at “High food prices are here to stay” | Tavia Grant | Dec. 20, 2011 | The Globe and Mail at http://www.theglobeandmail.com/report-on-business/economy/high-food-prices-are-here-to-stay/article2277431/.