Food costs might rise modestly but are still affordable

One challenge journalists face is to provide context to the issues and events they cover while mindful of the space and time constraints inherent in their medium.

Facts by themselves might yield little meaning or the wrong meaning if they are not given context.

I yearned for a little more context in the reporting on the recently released Canada’s Food Price Report 2019.

It is the latest in a series of annual updates produced by professors and others from Dalhousie University, University of Guelph and Nova Scotia Community College.

The full report is an interesting read with important insights into consumer trends, government policies and climate factors that affect the cost of food. It is a worthy project that I hope continues.

But I do have a bone to pick in the executive summary of the report, a context flaw that got picked up in news reports and amplified.

The flaw is certainly not limited to this report. Indeed it is widespread. It is the habit of highlighting the worst or largest outcome when a report actually has a range of outcomes.

The food price report says that in 2019 the cost of a family’s food basket could rise by 1.5 to 3.5 percent.

In the text, that got written as: “overall food prices are expected to rise up to 3.5 percent in 2019.”

Grammatically that is correct, but it emphasizes the worst outcome. When the report translates the percentage figure into dollars, the reference to a range of outcomes is completely lost.

“This forecast means that the annual food expenditure for the average Canadian family is expected to increase by $411 in 2019 to around $12,157 for the year.”

That is true if prices rise by 3.5 percent. But if they rise by 1.5 percent, the increase would be only $117.50

But there isn’t much room for nuance in headlines or quick radio news blurbs so the busy consumer hears things like “Expect your annual grocery bill to climb $400 in 2019.”

Other headlines on stories about the report included: “Prices of your favourite foods could soon skyrocket,” “Costly veggies could mean a higher grocery bill in 2019,” and “Food costs expected to spike next year.”

Don’t get me wrong. Some longer news items and interviews with professors who contributed to the report were balanced and informative.

But I longed for context.

For example, overall annual inflation in Canada this year is running at 2.4 percent.

The Food Price Report’s forecast in December 2017 for food inflation in 2018 was a range of one to three percent. The actual result (October 2017 to September 2018) was 1.8 percent. So food prices rose at less than the national inflation rate.

And even as inflation was generally rising, some food categories saw a zero percent increase in 2018: bakery, dairy, food and fruit. Meat rose only one percent, seafood two percent, vegetables four percent and restaurant food four percent.

If food prices in 2019 rise at the low end of the report’s forecast, 1.5 percent, they would again likely fall behind the overall rate of inflation.

Another important aspect of the topic of food cost is affordability.

Food buying represents a major cost of living. In Canada it ranks fourth, after shelter, income taxes and transportation.

If you are poor or on a fixed income, food cost increases are a hefty burden. Statistics Canada says that between 7.6 and 8.5 percent of households in Canada suffer food insecurity, meaning they do not have access to a sufficient variety or quantity of food due to lack of money. For these people, getting food is likely only one of their problems. Shelter and other basic necessities would also be a struggle. The problem is inadequate income and we need to address that with better public policies.

But when talking about the country as a whole, spending on food as a percentage of overall household spending is among the lowest in the world. Food purchased at stores amounts to less than 10 percent of Canadian household expenditures.

It is closer to 14 percent in France and Italy, 25 percent in China and more than 50 percent in Nigeria.

Our standing is because our incomes are generally higher and also because food production here is incredibly efficient.

And by this measurement, although food costs more, it is more affordable than in the past. In 1969 food spending accounted for almost 19 percent of household spending. Back then it was ahead of shelter, personal taxes and transportation.

And when looking at the full context of food costs, it is worth accounting where those costs come from.

U.S. Department of Agriculture data, and Canada’s experience is likely similar, shows that for a typical dollar spent in 2016 by U.S. consumers on domestically produced food, including grocery store and eating out purchases, a little more than a third went to services provided by food service establishments.

Another 15 percent went to food processors, 12.4 percent to food retailers and just over nine cents to wholesalers.

Things like energy, transportation, financing and insurance, advertising, packaging and various other costs together accounted for about 19.3 percent.

The farmer got 7.8 percent.

The bottom line is that although food costs might rise modestly, the vast majority of Canadians don’t need to worry about where their next meal will come from or how much it will cost.

Because food is generally affordable, we have the surplus income to allow us to be generous at this time of year and give to the institutions that help those less fortunate.

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