Food Prices Predicted to Go Down in 2012

All the Canadian financial news lately has been mortgage news, it seems. Fixed rates are equaling variable rates, and even more importantly, rates are going to continue to stay low well into next year. This, Bank of Canada says, is in answer to a shaky global economy as well as a Canadian economy that is still rebounding from the recession. Now though, things are turning around on the flip side of the financial coin, and market and retail prices are predicted to go down in the near future. Of the most notable dips, is that of food prices.
Many Canadians noticed when food prices started to climb at the end of last year; it was hard not to. Statistics Canada recorded the increase in food prices as being 4.3% higher than they were in September 2010. The reasons for this were many including higher fuel prices, along with the increased planting for the purpose of developing bio-fuels rather than on food consumption. Among one of the biggest reasons though for the spike on food prices was a poor crop in many of the biggest harvest areas of Canada.
Different regions saw all kinds of different disasters including drought, fires, flooding – all of which led to a weak harvest in 2010. But the past eighteen months has been very different, crops are starting to rebound, and farmers can again start lowering their profits as they turn more of a profit at the same time. Everyone’s happy. But hold up. While we will be paying less next year than we did this year, it still won’t be the “normal” prices that we were paying even three years ago.
Michael Burt, the Associate Director of Industry Sector Economics at the Conference Board of Canada says, “It takes six to 12 months for changes in agriculture prices to show up on store shelves, so consumers don’t see the price change right away. What has actually happened in the last six months or so is that prices for some commodities have started to edge down actually, so things like wheat, corn, some types of meat, sugar prices are lower today than they were six months ago.”
And hopefully, they’ll be even lower still in six more months!