03/16/2015 05:22 EDT | Updated 05/16/2015 05:59 EDT

Rising produce prices result of falling loonie

The cost of buying fresh produce will continue to eat up more of your family's food budget, according to researchers at the University of Guelph.

By year's end vegetable prices may increase between 5.5 and 7.5 per cent, according to projections by professors at the University of Guelph.

In December, researchers warned of slight increases but the plummeting loonie forced them to revise their findings in February. 

The loonie's descent is affecting the price of food imports, particularly produce said Sylvain Charlebois, a professor at the University of Guelph who specializes in food distribution policy.  

"2015 was going to be the year of the Canadian loonie weakening against the American dollar. We were expecting the drop to happen," he said. "But the loonie's descent was so rapid, it was difficult for anyone to hedge against it and Canadian food importers were expected to pay more." 

The loonie is trading at 78 cents to the American dollar, a decrease of 10 cents since March 2014, according to the Bank of Canada. 

Local businesses feeling the pinch

In January, the price of celery increased 11 per cent, and mushrooms and carrots both increased by five per cent over January 2014, according to Statistics Canada. 

Jack DaGraca, the co-owner of Windsor's Lumberjack restaurant said he's noticed prices have gone up five to 20 per cent on certain items. The price for a head of green leaf lettuce is $26.50, up from $23 last week.

While Lumberjack hasn't passed the increase onto consumers, many small restaurants and grocery stores won't have that luxury.

"Two weeks ago, cauliflower used to be $12 a case in U.S dollars, today we paid $40 a case, making it almost $5 dollars a head," said Tony Sorge, owner of Silverstein's Produce. His consumers used to be able to buy two heads for $3. 

"In two weeks, [the price] has gone up at least four times," he said. 

Charlebois said businesses try to keep prices steady. But this time he said there's no way to avoid raising prices..

"These increases are quite significant, and I'm not surprised restaurant owners would [raise prices]," Charlebois said. "You can't revenue manage your way out of this." 

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