Get ready to pay more to feed your family – lots more..Farm gate prices – which generally means how much the farmer was paid at the point of sale – in June saw their largest increase in 42 years.due to drought and rising exports to feed China, says Statistics Canada data..Blacklock’s Reporter said consumers should expect to pay more for groceries..“All that farm gate hoopla will catch up to consumers eventually,” said Professor Sylvain Charlebois of Dalhousie University’s Agri-Food Analytics Lab..The StatsCan Farm Product Price Index rose 24% in June compared to the same period last year, the tenth consecutive monthly increase and “the largest since March 1979,” wrote analysts..The increase was due mainly to higher farm gate prices for canola and soybeans, flax seed, wheat and barley, pork and beef..“Canadian consumers right now are avoiding the meat counter,” said Charlebois..“By volume, sales of pork nationally are down 17%. Chicken is down 12%, beef 6%. Those are huge numbers and that tells you people are saying they can’t afford a trip to the meat counter.”.Charlebois said retailers must limit price hikes if shoppers won’t pay..“A good example is in 2014 beef prices went up 25% in a month and people stopped eating beef,” he said..“In 2016 cauliflower went to $8 a head and people stopped eating cauliflower and then it went down to a dollar. The market will send clear signals.”.Professor Andreas Boecker of the University of Guelph’s Department of Food, Agriculture and Resource Economics said farm gate prices account for a small fraction of retail costs, an average 15% to 17%..Professor Alfons Weersink of Guelph’s agriculture department said wholesalers and grocers tend to prefer incremental price increases over time..“There is sticker shock,” said Weersink..“Consumers shop around, and the grocery retail market is relatively competitive..“There is a reluctance by retailers to raise the price too much. That’s why prices tend to go up gradually over time..“Do we need to be concerned about the Farm Product Price Index? Not right now. It takes a while for the effect to run through the whole food supply chain.”
