The average Canadian family will spend $695 more per year on groceries in 2021, as the rising cost of meat, bread and produce drives prices higher, and the COVID-19 pandemic continues to create uncertainty.
That’s according to the annual Food Price Report released Tuesday by Dalhousie University, the University of Guelph, the University of Saskatchewan and the University of British Columbia. The report also focuses on the impact of the COVID-19 pandemic on the food supply chain and Canadian consumers through 2020, adding “that the future is shrouded in uncertainty.”
“The impacts of the pandemic and the uncertainty that accompanies it will continue into 2021,” the report said.
“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 estimates that overall food prices will increase between three to five per cent, with the most significant price jumps seen in the meat, bakery and vegetable categories. An average Canadian family of four is expected to spend $13,907 on groceries next year, an increase of $695 – or five per cent – when compared 2020.
The jump in food prices is expected to outpace Canada’s general inflation rate.
“That means families are going to have to spend a high percentage of their disposable income on food,” says Sylvain Charlebois, a professor of food policy at Dalhousie and lead author of the report.
“The fact that we have been seeing food prices outpace the general inflation rate is becoming a problem for an increasing number of families.”
Meat prices are expected to rise between 4.5 and 6.5 per cent next, a trend that Charlebois said is a continuance from 2020, when supply chain disruptions caused by the COVID-19 pandemic led to product shortages and backlogs.
Vegetables are also expected to see prices jump between 4.5 and 6.5 per cent next year, while bakery prices will rise between 3.5 and 5.5 per cent.
The price increases come as many Canadian families struggle to make ends meet as a result of the coronavirus pandemic, which has driven Canada’s unemployment rate up. A recent report from Feed Ontario, an organization representing 1,200 food banks and hunger-relief agencies, said first-time visits to food banks between March and June jumped 26 per cent.
“It is our belief that the predicted, long-term economic impact of the pandemic will put extreme demands on food banks, who are already running at capacity to address existing demands in their communities,” the report said.
“If food bank use continues to rise, the scope of need will far outpace the capacity of any emergency charitable model to respond.”
Still, the predictions for food price increases are dependent on the impact of the COVID-19 pandemic.
“COVID-19 has resulted, for example, in shifts in consumer demand, slowdowns and closures of food plants and distribution centres, labour shortages and logistics disruptions,” the report said.
“Despite national assurance that our food supply remains safe and stable, the ability of the food chain to successfully adapt to challenges and disruptions and whether the pandemic continues into 2021 will determine the potential for food insecurity and the extent of food price increases.”
The report also notes there are other factors that may impact food prices in 2021, including the loss of the food manufacturing sector, the national ban on some single-use plastics and climate change mitigation actions.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.