COVID-19 has put a spotlight on agri-food supply chains and has impacted stakeholders from farm gate to consumer.
“Over the past 2 years, COVID-19 has put a spotlight on our food system and concerns over food inflation have risen,” says Stephanie Budynski, coordinating researcher with Alberta Agriculture, Forestry and Rural Economic Development. “Canada’s Food Price Report (2021) suggests that the uncertainty that accompanied the pandemic in previous years will remain and will continue to disrupt the agri-food supply chain.”
In nearly every grocery category there has been an increase in retail prices. In particular, meat prices across Canada have been rising and Alberta-specific meat prices have followed a similar trend. In Alberta, retail fresh or frozen beef prices have increased more than consumer food items and more than any other type of meat including pork, chicken and processed meat.
On a year-over-year basis in February 2022, the Consumer Price Index (CPI) for all items increased by 4.8%. There was also an increase in year-over-year CPI for retail food products (+5.7%), retail meat products (+12.4%), fresh or frozen pork products (+11.3%), fresh or frozen poultry (+9.9%), processed meat (+8.6%) and fresh or frozen beef products (+18.5%).
“A variety of factors may be influencing the price of meat products. On the supply side, labour shortages and production challenges have impacted the ability to process livestock and higher input costs have impacted the cost of production,” says Budynski.
“On the demand side, a decrease in income and food service closures led to an initial decrease in demand. However, as of late there is evidence that re-opening of foodservice and a substitution effect (for example consumers purchasing chicken rather than more expensive red meats) has impacted the industry.”
Budynski notes that robust exports in 2021 (for beef in particular) have also been a factor supporting demand and higher prices in the market.
“Purchasing habits have also been impacted by increasing prices. For example, 49% of Canadians reported they had reduced their purchases of meat products in the last 6 months due to higher prices. At a provincial level, Alberta (57%) reported the highest rate of consumers who have decided to reduce their meat purchases as a result of higher prices,” says Budynski.
Source : alberta.ca