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COUNTRY LIFE IN BC • JANUARY 2019


Consumer prices could buoy farm cash receipts BC fruit and vegetable prices are expected to increase more than elsewhere in Canada


by PETER MITHAM VANCOUVER – Consumers are set to pay more


for food in the coming year, creating opportunities for fruit and vegetable groewrs to receive a little more for their hard work. Nationally, food prices at both supermarkets and


restaurants will rise by up to 3.5%, say a team at Dalhousie University and the University of Guelph that has prepared the report since 2010. Vegetables will see the most dramatic increase, rising 4% to 6%, followed by fruit at 1% to 3%. Seafood and meat will decline in price, by as much as 2% and 3%, respectively.


BC will see some of the biggest impacts from


rising produce prices, says report co-author Sylvain Charlebois, project lead at Dalhousie University, thanks to its significant imports from California. The influence of El Niño weather patterns will


probably reduce production in California, explains Charlebois, limiting supply and boosting prices. “Over the winter months, BC importers may


actually need to procure produce elsewhere,” he says. “We are expecting fruit and vegetable [inflation] in BC to be one of the highest rates in Canada.” Constraints on lettuce imports sparked by


reports of illness linked to E. coli contamination of Romaine lettuce pushed the price of the salad green from $1.59 to $3 a head in Vancouver in early December. Other parts of the province saw higher prices and nationally, Charlebois says lettuce prices were hitting $7 a head. “CFIA is not allowing Romaine lettuce into the


market,” he says, referring to the Canadian Food Inspection Agency. “There’s less lettuce to be sold.” However, the report indicates that overall


inflationary pressures will have the most significant influence on food prices in 2019, as well as geopolitical risks, exchange rates and the trade environment. These will also help drive BC food prices higher. “The overall economy is doing well and wages


are moving much faster than other provinces,” he says of BC. “Usually, grocers will charge based on what consumers can bear.” However, rising prices may also make some consumers rethink what they buy. The report notes that those who haven’t seen wages rise will be under financial pressure. Those with high debt will also feel the pinch from rising interest rates exerting a “significant” downward influence on prices. Consumer attitudes towards food as well as competition and cost-cutting among retailers will significantly temper prices, too. Higher prices driven by the broader market could help local farmers in two ways. On the one hand, they’ll help local food look


more competitive, potentially driving sales of items that are in season. On the other, they’ll allow local fruit and vegetable producers to raise their prices in step with imports.


Beef consumption expected to dip


The losers, however, are livestock producers, who the report says face a tougher market as consumers pare protein consumption. Years of price increases will come to an end with the report’s first reported drop in the price of meat. The shift is part of a long-term trend that will


also hurt retailers, who enjoy 40% to 50% margins on meat sales. “We strongly believe that meat prices will


continue to spiral downwards until 2020 as we see an increase in the number of consumers reducing or eliminating meat consumption,” the report states. “Clearly, the tide is turning for the meat sector in Canada.” Researchers link the shift to female


empowerment. “The sector has historically marketed its


products to the male demographic,” the report states. “At a time when women’s empowerment is finally a top-line item for every pillar of the economy, we’re seeing a shift in consumer patterns.” While federal policies are betting money on the


future of farming being female, the report says women are driving innovation in the agri-food sector, creating alternatives to traditional proteins and other products. “The majority of start-up companies in the agri-


food space in Canada should include more women and increasingly become multicultural to stimulate creativity, dynamism and overall economic growth,” the report states. “We are seeing positive correlations between social movements and changes in consumer preferences at the food level.” Agriculture and Agri-food Canada expects cattle and hog producers to focus more on export markets as domestic red meat consumption drops. Production was valued at about $21.4 billion in 2017 and will shrink to $20.5 billion by 2027. Nevertheless, livestock receipts on BC farms are


expected to rise 4% to nearly $1.6 billion this year, while crop receipts will rise 5% to exceed $1.6 billion. Unfortunately, net expenses will also rise 5%. This will cut 4% from net cash income, leaving BC farmers to pocket just $343 million.


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