Food prices in Canada are set to spike next year in the wake of a massive drought in the U.S. Midwest, says a new study from the University of Guelph.
The Food Price Index 2013 predicts that a record number of Canadians will visit food banks next year, and — despite the rising prices — Canadians will waste more food than ever. Currently, Canadians waste about 38 per cent of the food they buy, the study states.
“Retail food prices are expected to grow faster than inflation and to increase steadily in the coming years,” Prof. Sylvain Charlebois, associate dean of research and graduate studies in Guelph’s College of Management and Economics, said in a statement.
The latest edition of Charlebois’ Food Price Index forecasts that meat and eggs will see the largest jump in prices, with most other basic foodstuffs also rising above the expected rate of inflation.
(STORY CONTINUES BELOW SLIDESHOW)
But one bright spot in the forecast is the arrival of U.S. retailing giant Target, which will be selling foodstuffs in its Canadian locations and could trigger a price war with its competitors. If that happens, food price hikes could be lower than predicted, the study said.
The study also suggested climate will play a larger role in food prices in the years to come.
“The coming year may see climate impacts on food prices incur bigger effects,” University of Guelph economist Francis Tapon said in a statement. Because of the drought, Canada’s food supply doesn’t have any slack to guard against shrotages.
“Any sort of production disruption without quality buffer stocks will be felt much more strongly in Canadian wallets,” Tapon said.