Grocery inflation slows, as fresh vegetable costs increase

Prices for food items purchased from stores in Canada decreased slightly month to month in December, Statistics Canada says, but consumers continue to pay more for fresh vegetables, dairy products, and meats.

In its latest report Tuesday, Statistics Canada pegged grocery inflation in December 2022 at 11.0 per cent, a decrease from 11.4 per cent the month before. The overall Consumer Index Price (CPI) was 6.3 per cent year-over-year in December, a decrease from 6.8 per cent in November.

StatCan says the CPI slowed due to prices at the pumps.

“The monthly decline in December is the largest since April 2020, mostly driven by gasoline prices, which also posted their largest monthly decline since April 2020,” the Statistics Canada report reads.

Consumers paid 13.1 per cent less at gas stations in December compared to November. StatCan says this is a reflection of lower prices for crude oil amid a “slowing global economy.”

Despite a small month-to-month decrease in inflation, specific food items have stayed costly or risen in price.

Eggs in particular are 16.5 per cent more expensive than they were in December 2021, according to the latest CPI report.

“For Canadian eggs at the store, the retail price isn’t set by egg farmers,” says Jodey Nurse, a faculty lecturer studying historical patterns of agricultural marketing systems at McGill University.

“That’s a business decision made by those companies further up on the supply chain… I think it’s interesting that supply-managed commodities really have seen an element of stability,” Nurse told CTV’s Your Morning on Wednesday.

Nurse says egg prices are more stable in Canada – decreasing -2.2 per cent between Nov. 2022 and Dec. 2022 , according to StatCan – than in the U.K. and U.S.

Food costs in the U.K. continued to increase for a 17th consecutive month, reported The Associated Press. Inflation on food rose from 16.5 per cent in November to 16.9 percent in December.

Avian influenza outbreaks in the U.S. have impacted the price of eggs there and in Canada, Nurse said. As of Jan. 11 there were 47 states with poultry outbreaks affecting 57.8 million birds.

“Egg prices have been incredibly high in the United States, and in very short supply as well,” Nurse explained. “Canada in comparison has not experienced these issues to the same extent as the U.S. and this is largely because of our supply management system.”

As of Jan. 11, the Canadian Food Inspection Agency has reported a total of 118 infected premises (IPs) affecting 6.92 million birds. British Columbia has the largest number of IPs with 3.4 million birds impacted across the province.

“Farms in Canada are relatively small in size, especially in comparison to egg farms in the U.S.,” Nurse said. “Farmers work together to maintain the domestic supply of eggs so, for example, if there is an avian influenza outbreak that affects one region of the country, production can be increased in other provinces to keep the supply balanced and to make up for potential gaps.”

Nurse also said the distance between egg farmers across Canada helps minimize the spread of disease among birds. She believes eggs are still considered an affordable protein.

“We’ve seen the impact world events have had on supplies (like) Russia’s war in Ukraine, to issues that persist because of COVID-19,” Nurse said. “Of course, inflation has impacted most items that Canadians buy, including many food items…I believe the egg industry in Canada has a very strong incentive to keep prices as affordable as possible for consumers.”

FOOD PRICES IMPACTED BY INFLATION

While most food inflation decreased from November 2022 to December 2022, year-over-year December prices still remain high.

The prices for fresh vegetables rose 13.6 per cent in December 2022, from a 11.2 per cent increase in November 2022.

Tomato prices increased 13.6 per cent between Nov. 2022 and Dec. 2022, resulting in a 21.9 per cent year-over-year increase. Lettuce prices increased 2.8 per cent in the last two months, with December year-over-year inflation at 32.8 per cent.

Overall fresh fruit prices saw a 4.2 per cent increase from Nov. to Dec. 2022. Apples alone had a 2.5 per cent increase from Nov. to Dec. 2022 contributing to an overall year-over-year increase of 12.1 per cent in December.

Pasta product prices between Nov. and Dec. increased 4.8 per cent, resulting in a December year-over-year increase of 21.1 per cent.

Source link