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COUNTRY LIFE IN BC • JANUARY 2018


BC to bear brunt of food price increases in 2018 Weather, exchange rates key factors in higher fruit and vegetable costs


by PETER MITHAM


DELTA – Canadians can count on food prices increasing up to 3% in 2018, compounded in BC by an already high cost of living. The forecast comes with the latest issue of the annual report on food prices prepared under the oversight of Sylvain Charlebois, a professor at Dalhousie University in Halifax, and the University of Guelph’s Arrell Food Institute. Vegetable prices will be hit


hardest, rising 4% to 6% due to weather-related factors, while fruit prices will increase 1% to 3%. Other categories, including dairy, meat and seafood, will see prices rise no more than 2%. The gains reflect the less


aggressive pace of growth last year, when food prices increased by less than half the expected margin. Prices rose just 1.4% versus an expected


increase of 3% to 4%. The report attributed the phenomenon to “aggressive discounting practices of the major Canadian food retailers,” saying prices were being kept “artificially low.” The report also singled out


farmers’ markets as a competitive force, while ready-to-eat food alternatives were fingered for having a significant impact on food prices last year.


While the competitive


pressures benefitted shoppers in Nova Scotia last year, with Alberta and Ontario consumers likely to enjoy price stability in 2018, residents of BC were hit with above-average price increases. The report blamed the higher general cost of living in BC for the gains. A less competitive retail environment also helped keep prices higher. Whether those higher prices translate into better times for BC fruit and


vegetable growers is another question, however. Agriculture and Agri-food


Canada reported in November that crop receipts in BC were expected to end 2017 up 5% to $1.7 billion, while overall farmgate revenues were on track to gain 2% to $3.1 billion. But for farmers supplying


BC Fresh Vegetables Inc. in Delta, returns were largely stable. The real increases in prices were seen on imported produce. “It swings on a weekly basis based on supply and demand and the existing exchange rate,” says BC Fresh president and CEO Murray Driediger. “Cabbage might be US$7 FOB Bakersfield one week and US$16 the next, and we have to be able to react to that.” A key variable is weather, which has been more volatile in recent years – volatile enough that Driediger refrains from guessing where


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vegetable prices will go in 2018. “Those swings are playing


havoc with food pricing in the commodities that we deal with,” says Driediger. “Field vegetable and root vegetable pricing are affected much more dramatically by these weather-related events than they have been in that past.” While high market pricing can be a boon for local farmers, the fact that it’s usually linked to conditions elsewhere means it’s generally seen when local supplies are less available. This means local produce represents a cheaper option that can keep shopping bills in check, but local growers seldom benefit


from higher prices. “We’re price takers and we


have to follow the market,” says Driediger. On the plus side, the


market appears to be growing as BC outspends other regions of Canada.


Retail sales increased 11% in BC in the third quarter of 2017, and 13% in Vancouver. Nationally, sales increased 7%. During the first nine months of 2017, BC retail sales increased 9% compared to a national rise of 7%. Specialty food vendors fared best among grocers during the period, boosting sales 8%. The dominant supermarket category saw sales increase just 1%.


LOWER land cost


VegPro, a sum that covers the purchase price and development costs for the processing facility and farm.


nfrom pg 15


Affordability VegPro isn’t the first


operation to expand to the BC Interior. Farm Credit Canada’s annual survey of farmland values points to lower land costs as a key factor drawing both existing and new entrants to central and northern BC. Several dairy operations


from the Lower Mainland have expanded to the North Okanagan, while ranchers such as Blue Goose Cattle Co. of Toronto and Langley’s Central Park Farms have established herds in the Thompson-Okanagan. Coldstream Ranch itself


acquired approximately 2,000 acres last year, which means the deal with VegPro won’t diminish its own holdings. “We’re really not shrinking


at all,” says Balcaen. Coldstream will continue to run 2,400 cow-calf pairs across the 9,000 acres it owns as well as the million acres of Crown range it leases. It also operates a 5,000-head feedlot. By selling to VegPro,


however, the ranch brings more land into production without distracting from its own focus. “I’m very set on making


sure that while we’re here, it doesn’t get all chopped up,” Balcaen says. “I’d like to keep it in ag, and into specialty [production] like this is awesome.” Previous deals saw tracts sold to orchardists Bill Sandher and David Geen but field vegetables represent diversification. Moreover, the processing plant will add up to 200 jobs and augment the local tax base.


“I thought it was a real asset – a good move for our local community,” says Balcaen. “Anything we’ve done we’ve tried to be constructive and beneficial to our community.”


SOLD


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