Food price increases in 2024 will be lower than in previous years, says study

Credit to Author: Ramya Ramanathan| Date: Thu, 28 Dec 2023 15:16:52 +0000

While overall food prices will keep rising in the coming year, it will be at a slower pace says Canada’s Food Price Report 2024.

Released earlier this month, the annual publication produced by Dalhousie University, the University of Guelph, the University of British Columbia and the University of Saskatchewan, expects that food prices will rise between 2.5 and 4.5 per cent in 2024. This is much lower compared to the increase of 5 to 7 per cent in 2023.

According to the report, the average family of four is expected to spend $16,297.20 on food in 2024, an increase of up to $701.79 from last year (compared to an increase of $1,065 in 2023).

Andrea Rankin, Research Associate at the Agri-Food Analytics Lab at Dalhousie University, says the report “offers some good news” and that “Canadians can anticipate possibly calmer food prices through the coming year.”

“The estimated increase of 2.5-4.5 per cent for 2024 provides customers with much needed relief from the higher increases observed in previous years,” says Stuart Smyth, chair of agri-food innovation and sustainability enhancement at the University of Saskatchewan. “They should expect to see a degree of stability return to food prices. I am optimistic that the phrase ‘sticker-shock’ will become less commonly used throughout grocery stores in 2024.”

However, the rise in prices will not be the same across the board. For instance,  while anticipated changes for dairy and fruit range from 1 to 3 per cent, restaurants and sea food from 3 to 5 per cent, bakery, vegetables and meat could go up from 5 to 7 per cent.

How did we do in 2023?

According to the report, a variety of factors caused the rise in prices in 2023. These ranged from financial environmental factors like wildfires and flooding across the country, the conflict in Europe and unrest in the Middle East affecting energy costs and commodity prices, and financial pressures faced by Canadians including higher rental rates and rising personal debt. Almost a third of Canadians believed that price gouging by grocery stores was the primary reason for the escalating food prices.

However, despite the continued rise in food prices, the report found that was a decline in spending between August 2022 and 2023 (from $261.24 to $252.89). The estimated annual spending for a family of four in the past year was $693 lower than originally projected.

This decrease is a concern to researchers. Reduced expenditures in the face of elevated food prices indicates Canadians are decreasing the quantity and quality of food they are buying.

Looking ahead

While the report predicts that the outsized food inflation that’s persisted for the past few years will finally come to an end, there are many things that newcomers can do to better manage their spending on food.

These include comparing the prices of food (including looking at ethnic grocery stores and local markets) and downloading apps from grocery stores and scanning flyers before your visits. In addition, as a newcomer, it is important to develop financial literacy to better manage finances and learn about budgeting and cost of living in Canada.

A little research and planning can go a long way!

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