Canadians could see ballooning grocery prices for the “foreseeable future,” a federal agricultural bank is warning.
Farm Credit Canada made the prediction in their Quarterly Economic And Financial Market Update, according to Blacklock’s Reporter.
The bank named the supply chain crisis and labour shortages as two reasons for growing prices.
“We believe food inflation will remain elevated for the foreseeable future,” stated the report. “As supply chain disruptions and labour challenges ease and the supply of agricultural commodities rebounds we should record lower food inflation. The difficult question is around the timeline associated with a return to average inflationary pressures.”
Farm Credit noted that agricultural producers are facing inflationary rates well above the current Consumer Price Index average of 4.7%.
“Food manufacturers have passed on a net price increase of over 8.1 percent year over year through three quarters of the year, and manufacturing margins are now estimated to be back to 2019 levels,” analysts wrote.
“Food inflation has been rising in response to higher input costs and labour challenges. Challenging crop conditions in large portions of North America and Central Asia have contributed to tighter supplies and higher commodity prices.”
Instead of dealing with the inflation crisis, Prime Minister Justin Trudeau will be imposing a COVID-19 vaccine mandate on transport truck drivers which is predicted to cause further supply shortages across the country.
Last week, truckers associations from Canada and the US raised the alarm that such mandates could plunge the state of supply chains into deeper disarray.
“We know that there already is disruption in the supply chain; this is going to intensify it,” said President and Chief Executive of the Canadian Trucking Alliance (CTA) Stephen Laskowksi.
Similarly, American Trucking Associations (ATA) President and CEO Chris Spear warned that a mandate imposed by US President Joe Biden could be devastating for the economy.
“Given the nature of our industry and makeup of our workforce, (it) could have devastating impacts on the supply chain and the economy,” Spear said.
Certain grocery goods like oranges are up as high as 17%, while the price of chicken has shot up 28% and butter has spiked by 42% according to Statistics Canada’s latest economic snapshot.