From FCC Express, by Owen Roberts
Canadian consumers will feel the effects of both higher and lower prices farmers receive for their commodities in 2015.
The annual Food Price Report from the University of Guelph predicts “slightly higher” grocery bills for Canadians next year, with food costs increasing “marginally,” between 0.3 per cent and 2.4 per cent.
Higher costs ? but nowhere near as high as some economists were predicting last spring ? will be felt for meat, in particular, a key driver in this report.
The report forecasts that meat prices are likely to rise five per cent, led by higher pork and beef prices.
On the flip side, grain prices are expected to remain unchanged, keeping livestock feed costs from rising. That will help slow increases in meat prices, which through 2014 rose more than 12 per cent.
These and other factors are part of the food price report mix, which does its best to predict costs for the next 12 months. It’s more complicated when wild cards arise, such as plunging petroleum prices. But over the past year, the food price report was fairly accurate.
Dr. Sylvain Charlebois, lead author of the report, says even as agriculture becomes more efficient, global demand for meat protein is rapidly growing, driving up prices here.
As well, history is at play. LeaAnne Wuermli, communications manager at Beef Farmers of Ontario, notes Canadian beef cow numbers are down 26 per cent from 2005. She blames declining inventories on regional droughts, feed costs, COOL and recovery from BSE.
And this phenomenon is not restricted to Canada. American beef cow numbers are down 11 per cent since 2005, and internationally, tight supplies are also being experienced.
“We know that globally, income and wealth is increasing,” she says. “As incomes grow, diets are shifting to include more protein, and globally we are experiencing a considerable growth in demand for beef.”