First, let's get the scary-looking numbers out of the way.
In the 2021 edition of Canada's Food Price Report, the authors predict that the cost of food will rise 3 to 5 percent for Canadians next year. For a family that includes a man and a woman aged 31-50, a boy aged 14-18 and a girl aged nine to 13, that means annual food expenditure would increase by $695 at the high end, to $13,907. Of course, the pandemic looms large in the latest national survey, which covers everything from shifting consumer demands to rising income and food insecurity...
With its suitable climate and fertile land, the province could produce more food locally
First, let’s get the scary-looking numbers out of the way.
In the 2021 edition of Canada’s Food Price Report, the authors predict that the cost of food will rise 3 to 5 percent for Canadians next year. For a family that includes a man and a woman aged 31-50, a boy aged 14-18 and a girl aged nine to 13, that means annual food expenditure would increase by $695 at the high end, to $13,907.
Of course, the pandemic looms large in the latest national survey, which covers everything from shifting consumer demands to rising income and food insecurity. “In 2021, we can expect to feel the continued effect of COVID-19 on our agri-food chain and global food systems, in addition to the growing impact of climate change,” the report states.
The report, now in its 11th year, is published by Dalhousie University and the University of Guelph. This time around, they’re joined for the first time by the University of Saskatchewan and UBC, which has observer status, says co-author James Vercammen, professor of food resource economics with UBC’s faculty of land and food systems. “Over the next 10 months, we’re going to do a lot more and try to understand the B.C. picture,” adds Vercammen, who is also professor of strategy and business economics at UBC Sauder School of Business.
What exactly is driving next year’s projected price hike? Vercammen and his colleagues don’t know for sure. For the past several years, he says, food price increases have been in the 2- to 4-percent range, versus 1 to 2 percent for inflation as a whole, without any strong explanation. “Part of the problem is that the price forecasting is coming from these large-scale, machine-learning, sophisticated price forecasting models,” Vercammen explains. “It’s a bit of a black box as to what these things predict, but they are pretty accurate.”
How does next year’s projected price increase fit into longer-term trends? The typical grocery bill in Canada has gone up about 170 percent over the past 20 years, outpacing general inflation, the report observes. But as Vercammen points out, the data behind those numbers isn’t very high-quality. Statistics Canada calculates the Consumer Price Index (CPI) by creating baskets of goods—the average family consumes, say, this much chicken or this much milk—that it might hold constant for as long as 10 years. “So as we’re seeing people maybe shift to more processed goods, certainly it’s going to look like prices versus inflation are higher,” he says. “But the actual prices of potatoes themselves may not be going up by that rate.”
What Vercammen finds more interesting is that food prices have been so stable since the pandemic hit B.C. in March. “When you have a huge closure of the Cargill meat slaughter plant in High River[, Alberta,] for almost two weeks, one would have thought that meat prices would go through the roof and there would be shortages,” he says. “I looked at the CPI yesterday, and yeah, there was a bit of a jump in May and June for meat, but it was hardly noticeable.”
That speaks to the resilience of our food supply chains, Vercammen says. “And if anything, produce prices came down over the summer
despite the craziness of COVID and the labour shortages we read about and the border issues,” he adds. “That’s probably the real story, but the media’s not particularly interested in that.”
COVID may help push up prices next year, but climate change poses a longer-term threat to our food security. Vercammen cites the surge in the cost of cauliflower several years ago, which saw Canadians pay $10 a head after drought disrupted California growers. “One extreme scenario is not completely unrealistic where the COVID crisis in California could get to the point where they just are not able to move the produce up, similar to cauliflower, and we see some price spikes.”
That run-up would be temporary, Vercammen notes. “But I think the bigger issue is California and the wildfires and the droughts and the ability to continue to rely on them in the long term rather than developing our local industry.”
As for the current strength of the domestic food supply, Vercammen doesn’t sound impressed. “If you drive through the Fraser Valley right now, what you’re going to see is a lot of land left roughly idle,” he says. Around Abbotsford, there are plenty of blueberries and raspberries, and Chilliwack grows lots of corn. “Seriously, we can’t do any better than that?” Vercammen asks. “You see the odd patch of someone growing some vegetables, but for the most part, we import our produce and export most of what we grow, which is blueberries.”
He does see a better way forward, though. “The strength, I think, is our potential to grow food, given our climate and given our fertile land and given that people seem to be eager to want to support local food industries,” Vercammen says. “But the reality is that the market pretty much drives everything, and the large food supply chains and the supermarkets prefer to deal with very big suppliers rather than our local growers.”
Buy BC and other government efforts have been reasonably effective at reminding consumers about local food products, Vercammen says, but he’s still disappointed by what he sees on the shelves of a typical supermarket. “Years ago, when I came to Vancouver, they used to do a much better job when the local apples came in, for example,” he recalls. “But now you hardly even notice when the local apples have arrived.”
What would it take to bolster the homegrown food supply and reduce our reliance on California? “Unfortunately, I don’t know if there’s much government can do,” says Vercammen, who is wary of subsidies to encourage more production in B.C.
One of the province’s big challenges is that it’s lost so much processing capacity, for meat in particular, he explains. Now most local beef and pork gets processed in Alberta, and we buy it back again. “That’s partly because the government’s put in very high safety standards, and small-scale abattoirs couldn’t manage those standards.” Policy makers could help boost processing capacity by taking a different view of what an abattoir looks like, he suggests.
Vercammen also asks whether B.C.’s appetite for locally produced food is more than a niche market, given people’s reluctance or inability to pay a premium for what they eat. “I think we could do a lot more,” he says. “But the incentive for retailers is not there, and until consumers start demanding it, I just don’t know what it’s going to take.”