U of G Food Economist Predicts Further Food Inflation

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The announcement that dairy prices are set to rise eight percent on Feb. 1, has made headlines and even prompted calls for more transparency on how prices are set, but a University of Guelph food economist says other foods could rise even further; we just won’t be warned.

Dr. Michael von Massow is a professor in the Department of Food Agriculture and Resource Economics in the Ontario Agricultural College. He says that because dairy prices are set by a Crown corporation, the Canadian Dairy Commission, it’s ​one of the only food categories in Canada that announces when its costs are going up.

“The truth is — and I hate to have to say this — lots of food costs are going to go up next year,” he said.

“Beef prices. for example, probably will rise by even more than 8 per cent. It’s just that most commodities won’t announce these price changes like dairy does because they don’t have a central supply management system.”

Dr. Mike von Massow

Prepare for sticker shock from imported produce imports, as well, warns von Massow.

“With water levels at historic lows in the southern U.S. we are likely to see higher costs for produce from California and nearby areas, particularly if there’s rationing of irrigation.

These increases are going to affect all Canadians, just in different ways, he added.

“Clearly, these increases are more significant to the food insecure, who have less ability to buffer. They are not buying premium items as it is, so these price increases are of significant concern,” he said.

“Those who spend less of their income on food tend to make other adjustments, research has shown. They may go to restaurants less or they cut back on other kinds of spending. There’s also solid evidence ​in the  research that people ‘trade down’ on foods as well. So for example, they’ll have more ground beef and less steak,” he said.

Von Massow recently discussed rising food and dairy prices with the Financial Post and EloraFergusToday.com. He is available for interviews.

Contact:

Dr. Michael von Massow
mvonmass@uoguelph.ca