Calgary families will see substantial hike in food prices next year: Report

The average Calgary family of four can expect to pay about $966 more on food in 2022 than they did in 2021, according to the latest Canada’s Food Price Report.

Sherri Woolsey is a mother of six children in Calgary and was discouraged to hear the news.

“It’s pretty hard because we have six kids and when you’re trying to feed them it’s not cheap and I know my kids are struggling too,” she said.

“The meat is the most expensive, we’ve been fortunate enough that we can go hunting and provide for our family, but I think it’s ridiculous how much prices are going up.”

Other shoppers like Lushiya Ayaca are also noticing large upticks in their bill. 

“It’s overwhelming, it’s really hard because it used to be around $50 for my groceries and now it’s up to $100," said Ayaca..

Researchers at Dalhousie University, the University of Guelph, the University of Saskatchewan and the University of British Columbia released findings Thursday which show food prices are expected to increase by five to seven per cent in 2022.

The findings show that the average family of four will spend $14,676 on groceries which has been driven by the ongoing COVID-19 pandemic and supply chain issues. 

“The transportation corridors are disrupted between air and the west coast with rail and road capacity limited for the coming months, inflation is coming in at highs not seen in well over 15 years,” said Dr. Stuart Smyth, University of Saskatchewan associate professor of agri-food innovation.

“Toss in the labor shortage last summer for a lot of fruit and vegetable producers in B.C. and Southern Ontario and you just pull all those factors together and it's kind of like the perfect storm of bad news for agriculture and food prices.”

Smyth adds that Calgary, Edmonton and much of Alberta will notice increases in fresh produce coming up from Southern California.

The report also projects that dairy products will see a six to eight per cent hike at grocery stores for Albertans, which is higher than average across the country.

“Until the federal government makes a decision that the rail companies are going to take the premiums offered by the oil and gas companies to move their product, food companies in the ag sector are going to pay a higher price to move food products,” Smyth said.

For now, consumers in Alberta are being encouraged to save money by purchasing items without third party labels such as products that are labeled organic non-GMO or gluten free.

“All of those products have a 30 to 90 per cent price increase and no change in safety or nutrition, so a simple way for consumers to save some money would be to avoid third party labels,” Smyth added. 

RESTAURANT OWNERS FEELING THE PINCH

Calgary restaurant owners are already struggling and as prices increase they’re also forced to adjust prices on their menu in order to stay afloat.

Ronnie Mupambwa, who owns Chakalaka on 17th Avenue S.W., says he has already had to bring prices up on his menu slightly.

“It's very difficult because you're having a hard time trying to get people indoors and now you know, to try to keep up with inflation and the price is going up, it’s almost like a never-ending storm,” he said.

“We’re seeing a 15 to 20 per cent higher markup on some items so it's huge, especially in a restaurant because you know, any percentage increase you have to make up for it somehow and you can't really put all of that on the guests.”

Despite the increase, Mupambwa is still confident that an increase in business from Christmas parties during the holiday season will help him get through the end of the year.

What the future holds however is still unsettling for the restaurant owner who opened up shop earlier this year.

“It’s hard for our business to survive now without any big help from the government and we haven't seen normal sales in in a few months now,” said Mupambwa.

“I think the biggest thing is to keep supporting local if you can, this is a good chain, right? And so if you support restaurants, you can help feed someone else that works at a restaurant. I think we’re all in this together and we need to find a way to continue to support each other and help each other get out of this storm.”

SUPPLY CHAIN AND CLIMATE CHANGE ISSUES 

Supply chain experts are pointing to the rising cost of transportation and fuel surcharges as one of the biggest factors for increasing food price.

Associate professor of supply chain management at Mount Royal University, Rajbir Bhatti, says a shortage of labour on farms, along with a shortage of delivery drivers is adding to the uptick.

He also points to recent natural disasters such as flooding in British Columbia that have created tremendous issues for products to arrive in Calgary stores.

“It's time for us to reconsider resilience in our supply chains whether it is our agriculture supply chains, or it is your, you know, fast moving consumer goods, electronics, whatever else because climate change is here, it’s real,” Bhatti said 

“So we need to start talking about supply chain resilience, network redesign, you know we only have one highway coming between Vancouver and Alberta so if we there's a washout, like what just happened, you are totally disconnected.”

Bhatti adds that certain products in the dairy or beef sector will see correlating increases due to their supply chain issues as well.

He says government now need to work harder to adjust agriculture supply chains in the future, noting that about $2 million worth of food in North America does not reach retails stores every day and about 10 to 12 per cent is wasted. 

“There has been a drought, shortage of fodder, water, all of those things and of course, the uncertainties around fuel and energy prices so the input costs in the agriculture sector have really been variable and have been going up," he said.

“So the immediate effect is going to be on dairy and it means a cascading effect on other things as well. So once the farmers' costs go up, the farmer is compelled to increase prices.”