The cost of producing food
There are many items farmers have to pay for to raise livestock and grow crops, like electricity, equipment, water, fertilizer, animal feed, seeds, and fuel, as well as employees to help them get all the work done on the farm. Even though food prices have been going up at the grocery store, this doesn’t mean most farmers are being paid more for what they sell. Many fruit and vegetable growers, for example, are still receiving the same prices – and in some cases less – for their produce as they were several years ago. That means that farmers always have to look for new ways to produce more food more efficiently so that they can stay in business. And there are things outside of a farmer’s control that impact their businesses too, such as transportation or processing strikes, new trade agreements and political spats between countries, weather events, or global crises like the COVID-19 pandemic.
The cost of buying food
The current state of food inflation is not limited to just Canada. In fact, it’s a global phenomenon and it impacts some parts of the world more strongly than others. Even though our food prices have increased considerably, Canadians overall spent approximately 11 per cent or $0.11 of each dollar of their disposable income on food in 2022. Not every Canadian has the same experience, though, when it comes to paying for food. Canadians with the lowest income spent 23.1 per cent of their disposable income on food, compared to only 5.2% for the highest income Canadians. Compare that figure to Mexico at 26.2 per cent, India at 32.1%, and Nigeria at 59 per cent47 and imagine how different your life would be if you had to spend that much of your income on food. Canada is known around the world as a leading food-producing nation. Our size, our climate and our natural resources make Canada ideally suited to agriculture and we are lucky enough to be able to produce much more of some foods than we can consume. We are a major exporter of staple crops like canola, wheat and pulses but also of beef and pork, for example, supplying countries who aren’t as self-sufficient as we are when it comes to food production.
What is supply management?
To organize the production of eggs, chicken, turkey, and dairy products in Canada, farmers use a system called “supply management”. It lets farmers across Canada match their production to Canadian demand, so consumers have a reliable supply of fresh, high-quality food at a reasonable price, and farmers receive fair and stable returns for their work. Supply management does not set retail or restaurant prices for poultry, eggs, or dairy products, but it does ensure farmers receive sufficient compensation that considers the average cost of production.