The COVID-19 pandemic has undoubtedly had an effect on our food systems, but just how big of an impact, we still don’t know.
Since the beginning of the pandemic, we’ve been hearing from folks in the community and from community organizations about the rising cost of food. Without clear and precise data, we were unable to verify these claims, but we took a keen interest in the issue.
This month, Statistics Canada released a table of “monthly average retail prices of food by province,” taken from the Consumer Price Index. Once we analyzed the data, we could confirm that yes, from December 2019 to April 2020, there were many price fluctuations for common foods in Newfoundland & Labrador - but not all of the prices increased.
What the Data Shows
There were certainly some increases in food prices between December and April. The price of grapes per kilogram went from $6.65/kg in December 2019 to $7.28/kg in April 2020, which is a 9% increase. The price of a 1.36kg bag of carrots saw a 25% increase in that time frame, from $2.46 per bag in December to $3.08 per bag in April. Most dramatically, the price of potatoes increased by a whopping 49%: in December, a 4.54kg bag of potatoes cost $3.78 on average, and by April, that price had increased to $5.65.
While these changes are certainly worth noting, and even a bit alarming, it’s important to note that not all of the increases were that dramatic, and there were even significant decreases in the price of some foods. For example, the price per cucumber in Newfoundland & Labrador dropped by 14% in that same four month time frame, from an average of $2.28 per unit in December to $1.98 per unit in April. The price of beef top sirloin cuts also saw a significant decrease, from $17.18/kg in December to $12.74/kg in April.
On average, food prices did increase over the winter and the beginning of the spring. Some of this could be due to the seasonality of various items, so for our purposes, it was important to not only take note of the price increases over the course of the winter, but to also take a look at when food prices were the highest. For many items, prices peaked in March (the beginning of the Public Health Emergency in Newfoundland & Labrador): apples were at their highest in March, at $6.06/kg; the price of tomatoes also peaked in March at $7.63/kg; and the price of peppers peaked at $9.28/kg.
Despite the fact that many food prices peaked in March, there were many increases from March to April. The price of a 1.36kg bag of onions increased by 9%, from $3.27 per bag to $3.56 per bag. The price of a 1.36kg bag of carrots increased by 16% (from $2.65 per bag to $3.08 per bag). The price of a dozen eggs increased by 20% between March and April, from $3.29 to $3.94.
So, it’s true: the price of many foods has experienced a significant increase over the course of the COVID-19 pandemic. The question now becomes - why?
Reasons for Food Price Increases
There are a multitude of reasons why food prices may have increased during the crisis. The first thing that often comes up in this conversation is price-gouging, and it’s impossible to dismiss that idea entirely. Reports of price-gouging have been made in Alberta and measures to prevent unfair price inflation have been made in other provinces. While it’s important to consider the possibility of price gouging, the more likely (and perhaps more complicated) answer lies in the structure of our food supply chain.
In North America, our food supply chain operates on a “just enough, just in time” model, which means that companies keep inventories low. They order in quantities and frequencies that perfectly balance supply and demand.
This means that at any given time, major cities in North America may only have a 3 day supply of produce and other perishable goods, and in Newfoundland & Labrador, that number could be as low as a 2 day supply for our entire province. Grocery suppliers often plan to have more supply when they know there will be an increased demand, but as we have seen throughout 2020, increases in demand and other disruptions in the supply chain are not always predictable.
Supply Chain Disruptions
One of the main disruptions in the supply chain at the beginning of COVID-19 was the surge in panic-buying and stockpiling that took place. No one knew how the virus and Public Health Emergency would unfold, which led many folks to stockpile on items they knew they’d need and didn’t know if they’d be able to get. The phenomenon that we saw of folks stockpiling toilet paper, hand sanitizer, and of course, food, is a normal human reaction to a very abnormal situation.
While stockpiling was understandable, it created a bit of a self-fulfilling prophecy. We were afraid of running out of food, so we bought all that we could, which left a dent in our precarious supply chain that was not easily filled. This stress on the system created an unprecedented demand for food and other items, and the lack of supply meant that items were harder to get. Cue a price increase.
However, panic buying was only one small piece of the larger food puzzle. An increased demand put added stress on the supply chain, but there were other, more significant disruptions caused by COVID-19 (and ultimately, the structure of our system).
In response to the COVID-19 crisis, many food production facilities in Canada were forced to close, stopping production of items that are normally shipped to the United States.
Scott Biddle, the owner of Scottlyn Group (a large farming and food trucking business based in Ontario), outlines some of the problems his company has been facing since the onset of the pandemic in this Maclean’s article. Scottlyn Group transports many items produced in Canada to the United States, and on the return trip, their trucks bring back shipments of produce. In response to the COVID-19 crisis, many food production facilities in Canada were forced to close, halting production of many items that would normally be shipped to the U.S. - but Scottlyn Group still had to send trucks for the produce, even though they weren’t delivering anything. This added a major cost to the retrieval of the produce, and to make up for money lost, the price of the produce had to be increased once it hit stores on this side of the border.
Another big disruption was the added costs - both financial and human - of migrant agricultural workers. Many farms and food suppliers in Canada rely on workers from other countries to facilitate their operations. This year, a lot of migrant workers did not make the trip due to COVID-19, and costs related to employing those who did travel were higher due to the mandatory quarantine placed upon them. Biddle says that government subsidy pays for a little more than half of the cost of feeding and sheltering migrant workers during their quarantine, adding to the company’s overall operating costs.
Compounding the cost issue is the high prevalence of COVID-19 among migrant workers in Canada. A high number of temporary workers are getting sick, which ultimately affects the amount of available human resources and incurs an additional cost; and that’s not to mention the most important aspect, which is that many folks who came to Canada to work are getting sick and might not be paid - some folks fear that because they are sick, they won’t receive the payment that they and their families rely on. Migrant labour exploitation has been an issue in Canada for some time and the problem has only worsened since the onset of the pandemic, leading to many cases of COVID-19 among migrant workers, including ICU admissions and even deaths.
Clearly, the reason for price increases is quite complex. So what now?
How We Move Forward
How do we prevent problems like this from occurring in the future?
Evan Fraser of the Arrell Food Institute at Guelph University says that the key to avoiding situations like these is building resilience, and in order to do that, we need to have larger food stores and regionalize our food supply chains. This might look like facilitating more local agriculture as well as eliminating (or at least challenging) the “just enough, just in time” model. If we focus on obtaining more of our food from local sources, and if we keep more food available in storage, it would help mitigate future supply shortages and therefore, would prevent price increases.
The past few months have been challenging to say the very least, and food prices have contributed to those challenges. While it is understandable to be discouraged by the rising cost of food and the possible broad-scale issues behind it, the positive aspect is that there are actions we can take to effect change.
The first thing would be to buy local wherever possible. It’s not always easy or possible to buy local food and products, but it does help stimulate our local economy and gives incentive for our agriculture industry to continue (and perhaps even grow).
There are also democratic options. This resource from Food Secure Canada outlines proposed policy changes for a more equitable and resilient food system in a post COVID-19 world. There, you can read in more detail about the changes and spread the word to your network, including your MP.
Despite its challenges, the pandemic is offering us all the opportunity to rethink how our society functions and to imagine where we’d like to go.
