Booming P.E.I. economy could push up food prices more than average

Canada's 10th annual food price report says your grocery bill is going up in 2020, and even moreso if you buy a lot of meat.

The report forecasts a four per cent increase in grocery bills, or $487 more for the average family of four.

Last year it was vegetables driving price increases — a forecast increase of six per cent that turned out to be 12 per cent — with harvests affected by climate change events. This year it is expected to be meat, with worldwide pork production threatened by African swine fever and demand for meat growing in China.

Meat prices are forecast to rise six per cent.

The news could be even worse for consumers on P.E.I., report co-author and professor Sylvain Charlebois told Island Morning. The Island's strong economy could push prices even higher.

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Charlebois said local beef production will not protect Island consumers from price increases.

"Commodity prices are affected by global markets, so whether you're in Prince Edward Island … or anywhere else, you're not immune to what's going on around the world," said Charlebois.

"We're all interconnected. Markets are much more global than ever before."

Too much for some

Poverty advocates on the Island said that increase may be too much for some, given that last year food prices rose by 3.5 per cent.

"We still have a large number of people who were living below the poverty line in this province, and so the affordability becomes more of a critical issue for sure," said Ann Wheatley with the Cooper Institute. 

"We need to look at a really sustainable long-term project to bring people's incomes up, and that, I think, really points to the value of implementing some kind of a basic income guarantee program in Prince Edward Island."

Meanwhile, farmers said just because prices have gone up doesn't mean producers are seeing a better bottom line.

"In the food industry prices tend to go up because there's a shortage," said Ron Maynard, vice president of the P.E.I. Federation of Agriculture. 

"A shortage means that some farmers somewhere have probably had a crop failure, and more extreme expenses as far as harvesting the crop which is what we're seeing this year in many places across Canada. "

Canada's price still low, sellers say

The Retail Council of Canada said although prices are going up, in their eyes Canada is still on the lower scale. 

"The general word on that is that Canada is always seen as being very competitive, we have a lot of grocery choice when it comes to purchasing food from your farmers' markets right up through to, you know, the largest grocery retailers in this country — even in small communities in Prince Edward Island," said Jim Cormier, Atlantic Director for the council. 

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"So for that reason competition does beat the price down. And, you know, generally you do see that a basket of food goods in Canada is very competitively priced compared to other countries in the world."

Cormier said retailers do have some control over their prices, but they are still at the mercy of the global markets and issues within it. He said retailers also have to try to meet demand.

"The fact is, especially over the last generation, people want what they want when they want it. They want to be able to get fresh fruit in January in downtown Summerside," he said 

"When there's those types of demands retailers will always continue to do their best to respond to those needs. But you know there are costs involved in bringing that type of product to people across Canada."

Technology changes

The report also looks at how technology will affect the retail experience, in particular, artificial intelligence.

"Be ready for the smart carts, the sensors, the self-checkouts, e-commerce, all that stuff. You're going to see more of that in 2020," said Charlebois.

Grocers are starting to tap into artificial intelligence to better understand consumer behaviour and to manage inventory, he said. This could lead to redesign of stores and also reduce waste at the retail level.

These new costs for grocers will likely be passed on to the consumer in some way, said Charlebois, perhaps by prompting you to buy more expensive items.

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