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Food in 2013: Pay more, waste less (REBECCA COOK/REUTERS)
Food in 2013: Pay more, waste less (REBECCA COOK/REUTERS)


Food in 2013: Pay more, waste less Add to ...

In 2012, Canadian consumers faced only modest food price increases; in fact, fruit and vegetable prices decreased by more than 8 per cent. Unfortunately, 2013 will be a different story.

Several forecasts predict that food prices will go up anywhere from 1.5 per cent to 3.5 per cent, likely exceeding our national inflation rate. In other words, consumers will have to rethink how they’ll be spending their hard-earned discretionary income.

Indeed, meat and poultry lovers will be hit especially hard, as meat prices are likely to increase by more than 4.5 per cent. With this rise in food prices, spending in other sectors is bound to decrease – a family may need to pass on that trip to Cancun or that new oversized television set.

While Mother Nature is always partially to blame for food price hikes, the “new normal” in the agriculture business is fluctuating food prices influenced by knee-jerk schemes perpetuated by an array of stakeholders in the industry.

The 2012 North American drought had a relatively strong impact on food production and, in turn, will affect food prices in 2013. This drought, the biggest of its kind in recent history, saw commodity prices increasing at a rate well above normal expectation. This was especially the case for corn and soybean crops in the Midwest, the area hit hardest by the drought.

Anticipating input costs to rise, many cattle producers liquidated their herds to hedge against higher feed prices. With less supply on the market, Canadians are likely pay more for their steak by the time we reach BBQ season next spring.

With grains, the situation is not optimistic, either. Primarily due to the lack of buffer inventory in many countries to mitigate against unpredictable climate patterns, 2013 will see climate change’s bigger effect on food prices. Without extra grain inventory, droughts, floods or other weather shocks will make markets more volatile and, in turn, affect the wallets of Canadians.

With that said, Canadians will get some welcome relief from an increasingly competitive food distribution landscape. Major players in food retailing have been adjusting to Wal-Mart’s aggressive strategy in the Canadian market. The U.S.-based giant has opened many supercentres in recent months, and large Canadian retailers have felt the pain. With Target’s imminent arrival, there may be more consolidation in the food retailing industry, and it wouldn’t be surprising if we lose a major food retailer in the next year or two. In the near term, however, food prices at the local grocery store will be lower for Canadian shoppers.

The strong Canadian dollar will also help Canadians looking for deals in grocery stores. Canada is a large importer of foods from the U.S., so with American food imports exceeding $20-billion a year, every cent gained by the loonie against the greenback has a significant impact on our buying power. When we factor in the state of the U.S. economy and the relative stability of our own economy, the value of the loonie can only go up.

Despite these positive signs, we could see a record number of people going to food banks in 2013. As mentioned, meat and poultry will cost more for the average family and, as a result, consumers will seek more affordable sources of food.

But there’s something that consumers can do at home right now to help extend their food budgets: become better food-waste managers. Even though we expect more Canadians to visit food banks, we may see even more wasted food than ever in 2013. Indeed, studies have shown that Canadian households waste 38 per cent of their food purchased in store and restaurants.

While it’s almost certain that shopping habits will change as a result of food price increases, there’s hope that there’ll be a greater awareness of wasted food in Canadian homes and that these households will be more proactive about their food-waste habits. By adopting better shopping practices and using leftovers in creative ways, consumers could save more than 10 per cent in food costs – more than enough to offset anticipated food price increases over the next two to three years.

If you’re thinking of ideas for New Year’s resolutions, becoming a better domestic food-waste manager might be worth putting atop your list.

Sylvain Charlebois is an associate dean at the University of Guelph’s College of Management and Economics.

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