Prices of food items purchased at Canadian stores fell slightly month over month in December, Statistics Canada said, but consumers continued to pay more for fresh vegetables, dairy products and meat.
In its latest report on Tuesday, Statistics Canada pegged food inflation in December 2022 at 11.0 per cent, down from 11.4 per cent the previous month. The headline consumer price index (CPI) was 6.3% year-on-year in December, down from 6.8% in November.
StatCan says CPI has slowed due to pump prices.
“December’s monthly decline was the largest since April 2020, driven mostly by gasoline prices, which also posted their largest monthly decline since April 2020,” Statistics Canada said in the report.
Consumers paid 13.1 percent less at gas stations in December compared to November. StatCan says this is a reflection of lower crude oil prices amid a “slowing global economy”.
Despite the slight monthly decrease in inflation, certain food items remained expensive or rose in price.
Eggs in particular are 16.5% more expensive than they were in December 2021, according to the latest CPI report.
“For Canadian eggs in the store, the retail price is not set by the egg producers,” says Jody Nurse, a faculty member who studies historical patterns of agricultural marketing systems at McGill University.
“It’s a business decision made by these companies further up the supply chain … I think it’s interesting that supply-driven commodities have really seen an element of stability,” Nurse told CTV’s Your Morning on Wednesday.
Nurse says egg prices are more stable in Canada – down -2.2 percent between November 2022 and December 2022, according to StatCan – than in the UK and US
Food costs in the United Kingdom continued to increase for the 17th month in a row, the Associated Press reported. Food inflation rose from 16.5% in November to 16.9% in December.
Avian flu outbreaks in the U.S. have affected egg prices there and in Canada, Nurse said. As of January 11, there were 47 states with poultry outbreaks affecting 57.8 million birds.
“Egg prices are incredibly high in the United States and also in very short supply,” Nurse explained. “Canada, by comparison, has not experienced these issues to the same degree as the U.S., and that is largely due to our supply management system.”
As of January 11, the Canadian Food Inspection Agency reported a total of 118 infected premises (IPs) affecting 6.92 million birds. British Columbia has the highest number of IPs with 3.4 million birds affected across the province.
“Farms in Canada are relatively small in size, especially compared to egg farms in the U.S.,” Nurse said. “Farmers work together to maintain domestic egg supplies so, for example, if there is an outbreak of bird flu affecting one region of the country, production can be increased in other provinces to keep supply balanced and compensate for potential gaps.”
The nurse also said the distance between egg producers in Canada helps minimize the spread of disease among the birds. She believes eggs are still considered an affordable protein.
“We’ve seen the impact of world events on supplies (like) Russia’s war in Ukraine, on issues that persist because of COVID-19,” Nurse said. “Certainly, inflation has affected most items that Canadians buy, including many food products … I believe that the egg industry in Canada has a very strong incentive to keep prices as affordable as possible for consumers.”
FOOD PRICES UNDER THE INFLUENCE OF INFLATION
Although most food inflation eased from November 2022 to December 2022, December year-on-year prices still remained high.
Fresh vegetable prices rose 13.6 percent in December 2022, up from a rise of 11.2 percent in November 2022.
Tomato prices rose 13.6% between November 2022 and December 2022, resulting in a 21.9% year-over-year increase. Lettuce prices have increased by 2.8% over the past two months, with annual inflation at 32.8% in December.
Overall, fresh fruit prices rose 4.2% from November to December 2022. Apples alone rose 2.5% from November to December 2022, contributing to a total annual increase of 12.1% in December .
Pasta prices between November and December increased by 4.8%, resulting in a 21.1% increase in December compared to the previous year.
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