The letters indicate further price increases at grocery stores this fall, capping a year that has already seen nearly 10% increases in the cost of food.
In some cases, the higher prices are due to the Canadian Dairy Commission’s (CDC) approval of a second milk price increase this year. Farm milk prices will increase by about two cents per litre, or 2.5%, on 1Ahem September.
And now dairy processors also appear to be eyeing their own increases, passing on the increases, as industry watchers had predicted.
Lactalis Canada, for example, indicated in a letter to clients that it would implement an average domestic market increase of 5% in September, a rate it said takes into account the price increase of CLC
significant inflationary costs with which he is confronted.
Arla Foods Canada issued a similar notice, saying price increases for its products in September would reflect rising costs for dairy ingredients and
inflationary impacts on transportation and packaging.
Saputo also indicated that it would apply price increases of around 5%, depending on the category.
Producers had to deal with rising production costs, as well as rising feed, energy and fertilizer costs, which had a significant impact on the on-farm milk price adjustment this year.Saputo explained in a letter to his retail clients.
In addition to these regulated increases, there have been sustained and unprecedented inflationary pressures affecting manufacturing, energy, labor and distribution costs throughout the supply chain.
Shared price increases with grocers underscore how regulated dairy price increases are amplified by additional price increases throughout the supply chain, said Gary Sands, senior vice president for public policy at the Canadian Federation of Dairy Products. Independent Grocery Stores.
The timing of the increases almost appears to be above regulated increases, he said. The net effect is to further exacerbate the problem and concerns about affordability.
These concerns are particularly acute in rural and remote communities, where transportation and fuel surcharges are higher, Sands added.
The rising price of these essential items is of particular concern in these communities.accurate.
The price of food purchased in stores increased 9.7% in May from a year earlier, and the cost of almost everything in the shopping cart increased, Statistics Canada reported last month.
A limit for the end of September?
Sylvain Charlebois, director of Dalhousie University’s Agri-Food Analytical Sciences Laboratory, estimated that the rate of increase in food prices could reach 10% before starting to slow.
% before things start to calm down”,”text”:”We expect food inflation to stabilize by the end of September, he said. In fact, it could be more than 10% before things start to settle down”}}”>We expect food inflation to peak in late September, he said. Actually, it could be more than 10% before things start to settle down..
The US Bureau of Labor Statistics reported on Wednesday that annual homegrown food inflation in the US hit 10.4% in June, showing the largest 12-month price increase for such products since 1981.
Charlebois believes Statistics Canada will release similar food inflation figures next week when it releases consumer price index data for June.
Rising prices will prompt merchants to promote their private-label options, he said.
Consumers are buying or bargaining for anything right now, and they’re turning to discount stores, he noted. They are actually more sensitive to the cost of living.
In addition, the letters sent by suppliers to retailers explaining the reason for the cost increases are part of an effort not to be accused of
The last thing processors want is to be scapegoated and blamed for rising food inflation.Mr. Charlebois said.
Inflation affects all Canadians, but it also affects the political economy of food and how the food industry is perceived.
Lactalis indicated in its letter to clients that it was
well aware of the impact of inflation on consumers.
As we all know, this cycle of inflation is largely driven by the latest phase in the evolution of the pandemic and the global geopolitical situation triggered by Russia’s invasion of Ukraine and the ongoing conflict.the company argued.
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