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Food taking bigger bite out of paycheques in Canada

December 20, 2007 | By More

A new survey indicates that many Canadians find their money doesn’t go as far as it used to at the grocery store. The Canadian Press Harris-Decima poll shows that more than half of Canadians surveyed – 57 per cent – feel that prices for grocery products such as prepared and packaged foods have increased over the past few months. One in four, 25 per cent, believe prices have increased a lot. The survey also shows that people in Alberta and Atlantic Canada are most likely to have noticed rising prices.

But many consumers aren’t sure why prices are higher – four in five of those surveyed don’t associate it with ingredient costs. But a major reason could be the rising cost of flour, as food processing companies pass on their increased costs, and higher prices for corn, soybeans, and other items such as barley, eggs, oats, rice, peas, sunflower seeds and lentils.

Bruce Cran, president of the Consumers Association of Canada, says over the past 24 months the association has been looking at produce prices and some grocery prices. “We’ve been looking for (price) reductions in food commodities from the point of view of the dollar rising,” he said of the informal survey taken at supermarkets across the country. “We thought maybe this would reduce the prices of fresh produce and some other staple items, but that hasn’t been happening at all,” he said in an interview Monday. “We can tell you everything has either remained almost the same or in most cases it’s gone up.”

Commodity surveys indicate prices of Illinois corn and soybeans are up 40 per cent and 75 per cent respectively from a year ago. Kansas wheat is up 70 per cent or more. As these products are used widely in packaged foods and to feed cattle, pigs, and poultry, the impact is broad. The wholesale price for three-pound chickens in the U.S. is up 15 per cent from a year ago. Several factors are being blamed for the rise in commodity prices, said Cran.”I know what we’re being told. Whether they’re right or not I don’t know,” he said. With fresh vegetables, experts point to shortages as the reason for rising prices for broccoli, spinach, lettuce and other crops.

The economies in Asia and Latin America are growing, putting more money in the pockets of people to spend on food, creating food shortages worldwide, say experts. Produce once shipped around the world is no longer being exported. In addition, said Cran, “we’re getting the story about crops grown being used to produce products that fit in with fuel production.”In the U.S., there are incentive programs that make it worthwhile for farmers to grow corn and soybeans for the production of ethanol rather than food, said Cran.”As the cost of oil goes up the more profitable it becomes for farming land to be used for substitutes,” he said. “The theory is that in the end the marketplace will level itself out. I don’t know if that’s such a good idea for consumers,” said Cran. “They keep using these funny little terms which means it’s going to cost us all more.”

The Canadian Press Harris-Decima survey asked respondents for their opinions about four possible reasons for grocery price increases. Forty per cent blamed the profit motives of manufacturers or retailers. Twenty one per cent pointed to government regulations making it more expensive to produce these products. Only 19 per cent blamed the rising costs of ingredients such as wheat and dairy for their higher grocery bills.

Bruce Anderson, president of Harris-Decima, says that for most people, grocery products are a central component of their cost of living – and their cost of living is rising as a result of these price increases. Most people, he said in a statement, “seem able to manage these higher prices for the time being, which is probably why there is relatively little public debate and consensus as to what is causing prices to rise.”

For manufacturers and retailers, said Anderson, “the numbers are a signal that if consumers do grow increasingly frustrated about food prices, they do not know the background for some of the price increases and as a result are more inclined to relate the problem with gouging rather than the need to pass on rising costs for food ingredients.”The Canadian Press Harris-Decima survey is based on interviews with just over 1,000 Canadians between Nov. 22-25. The poll is reliable within 3.1 percentage points, 19 times out of 20.

Category: Food

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