Grocery prices set to rise again
But researchers expect 2024 to mark ‘end of inflation storm’
JAKE EDMISTON BUSINESS REPORTER
Food prices will continue to rise in 2024, though not at the same punishing rate as this year, according to a new forecast from 30 scholars across Canada.
The annual report, released Thursday by academics at four Canadian universities, estimates that food prices will increase between 2.5 to 4.5 per cent in the coming year. That works out to roughly $700 more to feed a family of four in 2024 for a total annual household grocery bill of $16,297.20.
Dalhousie University’s Sylvain Charlebois, who led the study, said the report shows that 2024 will mark the “end of the food inflation storm.”
Food prices were climbing this year at rates not seen since the early 1980s, increasing by more than 10 per cent year over year in January. But price spikes have started to relax more recently. The latest report from Statistics Canada showed food prices increased by 5.6 per cent in October — down from the peak, but still above the overall inflation rate of 3.1 per cent.
Thursday’s food price report hinted that prices on some staples — flour, coffee — could possibly even drop next year.
Statistics Canada data is already showing signs of price drops. Flour, for example, dropped 6.6 per cent between September and October. Charlebois said grocery chains will likely boost promotions more in 2024 as they try to lure cashstrapped consumers whose budgets have been tightened by two years of high inflation.
“We could see some price wars,” said Charlebois, director of Dalhousie’s Agri-Food Analytics Lab.
One of Charlebois’ co-authors wasn’t as optimistic.
Evan Fraser, director of the University of Guelph’s Arrell Food Institute, said food prices are still going up, even though the jump won’t be as dramatic as the past year.
More food inflation, he said, should be a warning to policymakers in Canada, at a time when food banks are already reporting record usage.
“This is a wake up call,” he said. “Even though the heat‘s coming off the inflation conversation, we can’t ignore food price inflation because it will continue to be a real challenge for millions and millions of Canadians.”
Canada’s top grocery chains are already under pressure to roll out deals and tamp down inflation, after Ottawa threatened grocery executives with more taxes if they couldn’t come up with a way to stabilize inflation.
In response, some of the chains, including Loblaw Cos. Ltd. and Empire Co. Ltd., recently announced price freezes and steeper discounts on staples.
But NDP MP Alistair MacGregor, a member of the House of Commons agriculture committee, told The Canadian Press this week that he had reviewed all the grocers’ plans and “walked away quite unimpressed.”
The Thursday food report — a collaboration between Dalhousie, the University of Guelph, the University of Saskatchewan and the University of British Columbia — used machine learning models that considered things like rainfall, El Nino patterns, snow pack, and oil reserve data to predict how macroeconomic factors will impact food prices.
“Machine learning, it’s a big buzz word. But all it’s really doing is trying to find patterns in data that we as humans cannot really see,” said Kristina Kupferschmidt, a Guelph PhD student in machine learning who worked on the report.
Toronto Star Newspapers Limited