Groceries are selling for more due to global economic factors, but Ottawa is certainly not helping the cause. In the grocery store, Canadians are discouraged by the general rise in food prices. Supply chains, the invasion of Ukraine make life harder, but so does Ottawa.
Posted at 11:51 am
Consumers are literally being attacked by price increases everywhere right now, including in the grocery store.
We just learned that food inflation in Canada hit a record high of 9.7% in May. Everyone notices high food prices and no area of the grocery store is an exception. A global phenomenon is hitting Canada and food prices aren’t going down any time soon. Commodity production shortages are set to hit across the world in the fall, which could push global prices even higher. Supply chain issues coupled with a new cycle of inflation fueled by the Ukraine conflict will impact the food industry’s ability to stock shelves.
The change is so incredibly severe that many suppliers are unable to agree with grocers on prices, prompting them to shut down operations, as Frito Lay and Loblaw did earlier this year.
Despite this instability, some policies in Canada only make the situation worse. The Canadian Dairy Commission (CCL), a Crown company, felt a second milk price hike was necessary to compensate milk producers. Earlier in the week we learned that the price of milk on the farm is set to rise another 2.5% after a record 8.4% rise last February. The increase granted over the winter was so significant that most milk alternatives are now priced at a price similar to, or even lower than, milk. This time, Dairy Farmers of Canada (DFC), one of the country’s most powerful lobbies, called for another mid-year hike due to “extraordinary circumstances” without disclosing details to the public. Typically, the CDC says its calculations come from an extensive survey of at least 200 farms, about which we know little. For this cycle, we still don’t know where the data is coming from.
To make matters worse, the board’s decision to raise the milk price was made by a federal agency that has been working without its full board on the board for months. The board has only two members, both of whom are closely linked to the dairy industry. Conflicts of interest in the dairy sector are commonplace at the Commission, in politics and even in academia. Many teachers at Canadian universities are not just researchers, but are essentially supporters of their funding bodies, which represent the dairy industry.
The power and influence of dairy councils is beyond imagination. If only Canadians knew! The fact that the Dairy Farmers of Canada and the Canadian Dairy Commission are one is deeply disturbing. Canadian consumers cannot, and never will, be properly heard until this morally corrupt system ends.
More Canadians would understand that dairy farmers face higher production costs if only the board were transparent. These increases will encourage consumers to avoid more expensive dairy products and thus lead to the disappearance of several dairy farms.
Ottawa is also proposing new labeling rules for saturated fat, sodium and sugar. Health Canada has long awaited a front-of-package labeling requirement to better identify healthy foods. But the new policy also targets a single-ingredient product that many Canadians enjoy, ground beef. Ground beef and ground pork are among the most affordable sources of animal protein that we have today. As we are informed, only extra-lean minced meat is exempt for the time being. If this goes as planned, grocers will stop offering cheaper ground beef, making the meat counter even more expensive.
Ottawa is probably becoming consumers’ worst enemy right now. He needs to think about some of his ill-timed strategies that will drive food prices even higher. The so-called inflation plan introduced by Minister Freeland last week will do little for Canadians in the grocery store. Many were hoping for tax breaks, as many countries have been doing in recent months. But Freeland decided to make a “microwave” announcement to essentially “warm up” some programs that already existed.
Recently, the Secretary General of NATO said that the war in Ukraine could last for years. With that finding, unfortunate as it is, Ottawa needs to focus on our agricultural production here at home for the foreseeable future. Farmers need help with their inputs to prepare for the coming fall, winter and spring. Ottawa is also set to become one of the most influential trade advocates in the world and prevent other countries from succumbing to protectionism, the current worst-case scenario.