Canadians can expect to fork over more at the grocery store in 2021 — especially on fruits, vegetables and meats — as the impacts and uncertainty of the pandemic continue to play out.
That’s one key takeaway from Canada’s Food Price Report for 2021. Released today, the 11th annual report is a collaboration between researchers at Dalhousie University, the University of Guelph, the University of Saskatchewan, and the University of British Columbia.
The annual report forecasts what Canadians are likely to pay for food in the upcoming year, and the 2021 outlook suggests overall food prices will increase by 3% to 5%.
That means the average family will pay $695 (5%) more per year on their annual grocery bill than they did in 2020. This excludes food service and represents a total annual household food expenditure of $13,907 for 2021.
The authors note that in dollars, this is the highest predicted increase in the annual report’s history.
“In the report we talk about how food inflation has outpaced general inflation since the 1970s, and especially in the last 20 years. And at the same time we’re seeing wages stagnating, declining, and definitely not rising at the same levels of inflation,” Alyssa Gerhardt, a Dalhousie University PhD student and one of the report’s co-authors, explained in an interview.
“I think that the pandemic has really brought to light and made unignorable this issue about do we need a living wage for all Canadians? We saw during the pandemic that food banks had increased their services by 20 to 50% in some areas.”
The report notes that the typical grocery bill for Canadians has risen about 170% over the last 20 years. This means Canadian households — especially those in Eastern Canada — have been spending a greater proportion of their household budgets on food.
The food items likely to increase most at the grocery store as we move into 2021 include fruits, vegetables, and meats. All three commodities are expected to rise between 4.5% and 6.5% next year.
This is closely followed by bakery goods, which will increase by an expected 3.5% to 5.5% next year.
Gerhardt said increasing wheat futures will continue to impact bakery items into 2021. She said the meat industry is already volatile and the pandemic hasn’t helped.
“I think the biggest impact the pandemic had was likely due to the facility closures and backlogs of animals on farms,” she said.
“Just having limited capacity and efficiency-especially in the processing side of things-and having plants actually fully closed down for two weeks on the supply side of things.”
The greatest impact on fruit and vegetable prices is a result of our importation of many seasonal vegetables and fruits from the U.S.
“If we have a weak Canadian dollar, that’s going to impact that,” Gerhardt said. “But also we saw during the first wave of the pandemic a labour shortage in migrant workers, which also does have an impact on those things as well.”
Pandemic purchasing
The report’s authors don’t anticipate the same level of panic buying and hoarding behaviour exhibited by consumers in the first wave of the COVID-19 pandemic. During that time period, Canadians emptied store shelves of non-perishable goods like pasta, soup, peanut butter, tuna, flour, and rice.
As an example, the authors cite that rice sales in mid-March of this year increased by 239% when compared to mid-March of 2019.
“As it’s becoming the new normal, we’re navigating through that and realizing that things aren’t maybe as dire in terms of food supplies as we initially thought,” Gerhardt said. “I would be surprised if you saw that behaviour, to that extent, happening again.”
The report also found that fewer Canadians are turning to restaurants to get their food fixes. Before the pandemic, the food retail/service ratio was 62/38, meaning 62% of food budgets were spent on retail food purchases and 38% on food services.
In May, the last month before restaurants started to re-open, that ratio was 91/9. Food retail generated $7.8 billion in sales for grocers in May 2020, versus just $891 million in food service.
The report’s authors believe that ratio is currently around 74/26, adding they expect the food service won’t return to “near where it was before COVID” any time during 2021.
The report also notes that although it’s not top of mind in the midst of COVID-19, climate change remains a significant concern and will continue to pose challenges that impact food prices.
“Climate change is waiting for no one, so even though it may not be as topical right now or not our main concern, it’s still happening,” Gerhardt said.
“Regardless of what was happening with the pandemic, there were still record droughts and heat this year and things that are affecting food and growing food, food supplies and the price of food.”
She said in light of everything else 2020 has thrown at us, it’s perhaps unsurprising people’s support for things like bans on single use plastics declined during the pandemic, along with putting climate change front and centre.
“Although it’s not our main concern, it still should be top of mind,” she said.
Food should be ‘basic human right’
Gerhardt believes the food supply chain adapted and learned from the challenges and disruptions brought about by the first wave of COVID-19 that swept the country. She said the greatest impact on the consumer side is unemployment and underemployment that is leading to food insecurity.
“The takeaway from this report is that we do need more support in our system to help families be able to afford food. We know that families are heavily indebted,” she said.
“There are a lot of families doing everything they can and they’re still not able to afford their food.”
The latest edition of Canada’s food guide released in early 2019 highlights the importance of sustainable and plant-based diets. Gerhardt said we must recognize that until we make those kinds of diets accessible to everyone, we can’t expect it to be adopted by all Canadians.
“I think this report, compared to any of the others, shows that we need more societal support for families,” she noted.
“And maybe this will have implications on our food policy, but also maybe even visiting do we need to regulate food prices? What kind of things can our government do to help?”
As a sociologist, Gerhardt said she was pleased the 2021 food price report shone a spotlight on how we treat the migrant workers who help ensure Canadians get food on their tables. She also points to grocery store employees, a group she describes as “our most essential and indispensable workers” who also happen to be among the lowest paid in the country.
“Why is it that the workers that we rely on the most to have our food on our table are being paid the lowest wages,” she asked.
She hopes Canadians who read the report leave asking themselves what we can do to ensure all residents can afford food.
“It really should be a basic human right to have food,” she said. “What can we do to move beyond this? We need something to change, so hopefully the pandemic changes the conversation moving forward.”
Gerhardt said too often the responsibility for cutting food bills is put solely on consumers and families. She said this is a much broader issue that goes beyond a further pinching of pennies or eating out less often.
“I think that we need to shift this responsibility on to our society and ask, are people being paid a living wage and what kind of income supports do people have so that they can live a quality life,” she said.
“I think it moves beyond the consumer, although I do understand the question of what can we do as individuals to ensure that we have enough food.”
‘For every $100 that I spend, I’m getting one bag less’
Jessica Bradstock-Young agrees that it’s not enough to just cut back. She’s one of many struggling to keep her grocery bills under control.
“I’m stressed about this every day,” the Dartmouth mother said in an interview.
With two children of her own and a high school international exchange student stranded with her due to the pandemic, the Dartmouth resident’s food bills for her and the three children living under her roof rose from $600 a month on average last fall to between $800 and $1,000 this year.
She keeps a detailed monthly budget sheet highlighting her grocery spending. She shops at numerous stores for the best deals and stocks up when there are sales on non-perishable items.
But despite her best penny-pinching efforts and having a good job making “decent money,” she’s finding it harder to make ends meet.
“How can people afford for it (food prices) to go up any more? I’ve had like a 1% increase in two years and groceries have gone up since then and now they’re going up another 5%,” Bradstock-Young said.
“So I’m going to the grocery store and for every $100 that I spend, I’m getting one bag less and then another bag less. Soon, I’m going to be going in there and getting a bag of apples and some bananas and basically that’s going to be a rap.”
Bradstock-Young said she always thought her biggest child-related stress expenditure would be day-care costs
“I never anticipated that I would be struggling to provide food for my family. Never in my life. I always paid my bills and then had enough money to pay my groceries,” she said.
“Now I pay my groceries and at the end of the month, if I have money to pay my bills, I pay my bills and if I don’t then I buy my groceries. I’ve never had to do that before. Never.”
‘Just have to grin and bear it’
Lake Echo mother Sarah Poulin and her husband have three children under the age of 12, with a fourth on the way in early 2021. Their vehicles are 15 years old, she has an old cell phone with a very basic $60 a year plan, and she keeps careful track of all their spending using a budgeting app. She said there’s not much more they can do to cut back.
“It’s been nuts with grocery prices, and I’ve been managing to keep it down,” Poulin said. “We’ll live, we’re not going to starve to death with prices going up again. But it’s not easy. We’re already struggling as is, trying to not go into debt.”
Her husband has celiac disease and has allergies, so the family must be especially careful about what they eat. Last year the family of five spent about $1,100 a month on groceries. So far this year, they’re averaging about $1,150 a month. That was a modest $50 increase, but Poulin said it really stretches an already thin budget.
“I’m finding it really challenging to put aside anything to try to save up…You’re always going to get things like cars breaking down or a leaky roof that sort of thing,” Poulin said.
“I just don’t know how we’re going to get ahead when something like this continually goes up. People like us who don’t exactly have control over the food prices, we just have to grin and bear it, I guess.”
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