B.C. food prices up since end of 2020, but below year-ago levels

Inflation expected to ramp up in coming months

steak - gk
Various cuts of meat have risen significantly since the end of 2020 | Glen Korstrom

Food inflation in B.C. has ramped up during the past half year, but the cost for many products remains below prices seen a year ago.

Statistics Canada on August 4 released food price data for June, which is a time of year that some consider to be the start of barbecue season.

As such, some popular cuts of meat tend to rise at that time of year.

Take last year for example. Prices in 2020, for many cuts of meat, ramped up to peak pricing in June, before falling back in subsequent months. Those prices have returned to year highs.

Striploin steaks followed this trend.

Prices for that cut of meat jumped substantially – more than 56% – to $33.93 per kilogram in June 2020, from $21.66 in February, 2020.

Striploin steak average prices then fell to a low of $21.69 per kilogram in December 2020. Since then, average prices for the popular barbecue item have increased 31.3%, to $28.47 per kilogram, in June, 2021.

So while this meat has had a significant recent price increase, its cost to consumers in June remained below what it was a year earlier.

Similar pricing patterns were in effect for stewing beef, while ground beef prices have been comparatively flat.

Prices for some other food products, such as pork rib cuts, bacon, butter, and some fruit in June were priced higher than they have been in at least a year and a half, according to Statistics Canada.

Economists at four Canadian universities, including the University of British Columbia, had been predicting food-price increases.

They produced the Canada’s Food Price Report 2021, which forecasted an overall food price increase of between 3% and 5% this year.

The most significant increases that those economists predicted were for meat, at 4.5% to 6.5%, bakery goods, at 3.5% to 5.5%, and vegetables, at 4.5% to 6.5%.

Further price increases for a wide range of products could be on the horizon.

In May, influential billionaire, and Berkshire Hathaway Inc. (NYSE:BRK-B) CEO, Warren Buffett said: “We’re raising prices. People are raising prices to us, and it’s being accepted.”

His company owns more than a quarter of U.S. packaged-food giant Kraft Heinz Co. (Nasdaq:KHC), which released its quarterly earnings earlier today.

Kraft Heinz' president of its U.S. market, Carlos Abrams-Rivera, said on the company's August 4 conference call with analysts that the situation has not changed, and the company is able to pass on price increases.

"We feel good about our ability to achieve the net pricing we need to offset inflation," he said.

gkorstrom@biv.com

@GlenKorstrom