The drivers of food inflation
So what part of that supply chain is behind high food prices? There’s no single or simple answer to that question. Canada’s food system is a complex network and the balance between managing food inflation and farmers and other businesses along the supply chain staying profitable is a delicate one.
Weather emergencies and our changing climate
A key reason why food prices can increase is the weather. Droughts, flooding, extreme heat or cold and storms of all kinds can damage or even destroy crops, or cause livestock to produce less meat, milk or eggs. In severe cases, weather emergencies can also kill livestock and poultry. This is devastating for the farmers involved, but it also means they’ll have less food available to send to market – and when there is less supply, prices often spike. A spring frost that kills fruit blossoms will dramatically decrease how many peaches, cherries or apples will be harvested that year. An unexpected heat wave, such as the western Canada heat dome in 2021, will still impact the health and growth of poultry and livestock months after the event. The weather also impacts our ability to transport food quickly and reliably, such as the devastating floods in British Columbia in the fall of 2021 that closed key roads and rail lines for days and in some cases weeks or months. It’s not just weather in Canada that can cause shortages or price spikes. There are crops we can’t grow at all - like citrus - or crops we can’t grow outdoors in the winter, like lettuce. A flood or a cold snap in California means a shortage of Romaine lettuce in Canada, for example. Weather has always been a concern for farmers, but recent years have produced more extreme weather. You can read more about farming and the changing climate on page 20.
Plant and animal diseases
We’ve all just come through the COVID-19 pandemic, where we’ve learned first-hand how disease can impact everything about our daily lives. In farming, diseases and pests can also affect plants and animals. Avian Influenza, for example, is not a threat to food safety but is a risk for Canada’s poultry flocks and has killed millions of turkeys, chickens and laying hens in Canada. The industry works hard to mitigate any potential impacts on the production of chicken, turkey and eggs.
It can be hard to relate to events that happen far from home, but we still feel their impacts both directly and indirectly. That’s because Canada is part of a global economy and many of the products we buy or the ingredients we use come from other countries. Russia, for example, has long been one of the world’s leading producers of fertilizer, so the war between Russia and Ukraine has dramatically driven up fertilizer prices and caused supply shortages. Energy and fuel prices are also heavily affected by global events, and for the past several years, the food supply
chain has grappled with shortages of everything from shipping containers to cardboard packaging material because of turmoil caused by the pandemic. Most of these cost increases come because of situations beyond our control here in Canada, but still ultimately contribute to higher prices at the grocery store.