Food prices in Canada have been a popular topic as of late, most notably the threatened closing of the USA-Mexico border and its potential impact on fresh produce. There is no doubt that food prices have been increasing on average in 2019, mostly driven by the cost of fruits and vegetables. However, it is important to remember that these trends are common given the time of year and that the increase in prices may be normal.
Data derived from Stats Canada was used to create the graph below to depict the relative vegetable price and fruit price over the last 10 years dating back to January 2010. For vegetable pricing (yellow line), there are 9 different troughs in the data, most of which fall around August. The seasonal peaks in vegetable pricing are less noticeable, usually occurring between February and March. Fruit follows a similar trend, although the decline in prices throughout the Canadian summer months is not as significant. Alongside the seasonal trends, it is clear that the relative price of both fruits and vegetables has increased since 2010.
Why have vegetable prices drastically increased in the past 6 months?
Rather than solely considering the current landscape of the food industry, I believe the answer lies in the past. Although unexpected weather related issues, fad food trends, and politics have the potential to impact prices in the short run, I do not believe that is the case in this situation. It is important to keep in mind that Canada has a limited growing season and the supply chain of fresh vegetables is reliant on imports from our southern neighbours. The yearly trend graph below portraying the relative vegetable price per month from 2010 to 2019 illustrates the consistency of seasonal fluctuations in pricing.
Although not every year has the exact same trend, seasonality plays a major factor in the determination of vegetable prices in Canada. The summer months exhibit a decline in relative prices that aligns with the Canadian growing season. Prices begin to increase in October and generally hit a peak between February and March.
The increase in the price of vegetables from October to March over the past decade is 19.40%. This compares to a 20.82% increase in the price of vegetables from October 2018 to March 2019.
For many consumers who actively track their spending habits, this is a substantial increase. However, it is important to remember the historic trend and that a 21% increase in the price of vegetables in the fall and winter months is comparable to what we have become accustomed to over the last decade.
What is going on in the fruit market?
Fruit prices have not been at the forefront of scrutiny in 2019. I believe the popularity of some vegetable trends combined with the high 2016 fruit prices are mostly to thank. The beginning of 2016 is the clear outlier in the data set, with abnormally high prices that many suggested were a result of the low valued Canadian dollar. Perhaps these are the reasons vegetable prices have warranted all the attention, and consumers have not noticed that fruit prices have increased 10.86% from October 2018 to March 2019. The historical average increase over the same months for the last 10 years is 4.15%, less than half the increase experienced lately. Fruit prices decreased from February to March for the last 7 years except 2019, a clear outlier in the data.
Why is the focus on vegetables?
Fruit prices are well over double the historical average increase since October and vegetable prices have a minuscule difference from historical changes. Why are we not talking about this?
The 2016 peak of produce prices that arose from the low Canadian dollar and California droughts have officially been surpassed by 2019 vegetables, although fruit is nowhere close. Perhaps this is the reason why vegetables are receiving more attention.
The 21% increase in vegetable prices is a major change since last October. However, I believe the answer is that prices are completely relative. Only the consumer can determine if they see value in purchasing and consuming an item.
Next time you evaluate whether your potential produce purchase is a “good deal”, consider what you deem to be valuable and what you’ve historically paid, not solely the price you paid last week. Aside from the potential border closure between USA and Mexico, expect to see less expensive produce on the horizon.
Recommended citation format: Gingerich, M. “Produce price trends: comparing current prices and historical averages”. Food Focus Guelph (28), Department of Food, Agricultural and Resource Economics, University of Guelph, May 15th, 2019.