The latest Canada’s Food Price Report forecasts a food price increase of 3 percent to 5 percent in 2025, increasing overall food costs for the average family of four by $801.56.
By food category, the report by Dalhousie University’s Agri‑Food Analytics Lab predicts that prices for fruit and seafood will rise by 1 percent to 3 percent, dairy products and baked goods by 2 percent to 4 percent, and vegetables and restaurant food by 3 percent to 5 percent, while meat will rise by 4 percent to 6 percent.
A typical family of four with a teenage son and a pre-teen daughter will shell out $16,833.67 for food in 2025, while a single mom with two young children can expect to pay $9,566.40, the report estimates.
It will cost $3,189.01 to feed a 6- to 11-month-old child next year, $3,184.18 for a 4- to 8-year-old boy, and $3,849.74 for a 9- to 13-year-old girl. A 14- to 18-year-old teenage boy will be the most expensive to feed in 2025, coming in at $4,809.98.
The report’s authors used three different machine learning and AI models to determine the anticipated change in food prices. Experts then weighed in on the numbers. For the 2025 forecasts, the authors also used large language models to process information beyond raw data.
A number of factors, such as climate challenges, geopolitical conflicts, and a weaker Canadian dollar are likely to significantly increase food costs, the report said. It predicted that the expected weakening of the Canadian dollar compared to the American dollar will reduce the buying power of importers.
The report also said wheat production was impacted by droughts in North America, wetter-than-normal conditions in Europe, and the war in Ukraine, causing a 1.68 percent increase in trade prices from 2023. Other commodities such as coffee, cocoa, and citrus saw significant trade price increases in the past year due to high temperatures and weather events, as much as 111.20 percent for cocoa and 60.56 percent for coffee.
“Extreme weather events continue to prove challenging for food producers facing an unpredictable climate for growing crops and raising livestock,” the report said.
Additionally, the report warned that Canada’s agri-food sector has become less competitive in the last five years and that the incoming Trump administration could widen the competitiveness gap between the two countries and prompt Canadian grocers to stock more foreign goods. With the Trump administration likely to roll back more environmental regulations, the report warned that Canada’s carbon tax may give American farmers “another cost advantage with Trump’s less restrictive environmental stance.”
As of July 1, 2024, Canada’s cattle herd was at its smallest since 1987 while the U.S. cattle herd was at its smallest since 1951, causing beef prices to rise in 2024. They are expected to rise further in 2025. The report said droughts, higher feed costs, and elevated interest rates have also contributed to the price increase, and many consumers may choose other protein sources like fish and pork in the new year.
Last year’s price projections fell within the expected ranges or saw lower-than-predicted increases, the report said.
