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Forecast sees hike in food costs

A recent forecast from University of Guelph researchers sees Canadians paying more at the grocery store in 2013.
Prices are expected to rise for staples such as meet, bread and cheese, and those price hikes are expected to drive people to food banks in record numbers next year, a news release said.
At the same time, the university’s experts predict Canadian households will waste more food than ever, throwing out nearly 40 per cent of what they buy, it said.
“Retail food prices are expected to grow faster than inflation and to increase steadily in the coming years,” said Sylvain Charlebois, associate dean of research and graduate studies in the university’s college of management and economics. Charlebois, an expert of food distribution and safety, is the lead author of the 2013 Food Price Index, an annual examination and discussion of Canadian retail food prices. Last year, the index predicted an overall increase of no more than two per cent, which accurately reflected real Canadian retail prices, the release said.
Predictions are based on factors affecting retail food prices, including climate, economic risks, energy costs, currencies and trade, and Canada’s food distribution and retail landscape, it said. “The coming year may see climate impacts on food prices incur bigger effects,” Francis Tapon, a U of G economics professor who also worked on the forecast, said in the release.
Overall, Guelph researchers predict food expenditures will increase between 1.5 and 3.5 per cent in 2013, but predicted price increases for particular foods are as follows:
• Beef and pork – 4.5 to 6.5 per cent increase, due to rising grain prices for cattle feed and higher production costs in the pork industry
• Eggs – 3.5 to five per cent, due mostly to increases in animal welfare-based technology
• Grain: 1.4 to 2.7 per cent
• Fresh vegetables, fruit and nuts, fish and seafood, and vegetables – one to three per cent.
The researchers expect that Canadian food retail competition – specifically the arrival of Target stores in Canada – will create a price war and eventually drive down food prices, the release said. They also hope more awareness of rising prices will help reduce food waste, currently at about 38 per cent in Canadian households, it said.

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