Photo: The Canadian Press

Canadians won’t escape food inflation any time soon.

Food prices in Canada will continue to escalate in the new year, with grocery costs forecast to rise up to 7% in 2023, new research predicts.

For a family of four, the total annual grocery bill is expected to be $16,288—$1,065 more than it was this year, the 13th edition of Canada’s Food Price Report released Monday said.

A single woman in her 40s, which is the average age in Canada, will pay about $3,740 for groceries next year while a single man the same age would pay $4,168, according to the report and Statistics Canada.

Food inflation is set to remain stubbornly high in the first half of 2023 before it starts to ease, said Sylvain Charlebois, lead author of the report and Dalhousie University professor of food distribution and policy.

“When you look at the current food inflation cycle we’re in right now, we’re probably in the seventh-inning stretch,” he said. “The first part of 2023 will remain challenging … but we’re starting to see the end of this.”

Multiple factors could influence food prices next year, including climate change, geopolitical conflicts, rising energy costs and the lingering effects of COVID-19, the report said.

Currency fluctuations could also play a role in food prices. A weaker Canadian dollar could make importing goods like lettuce more expensive, for example.

Earlier this year the loonie was worth more than 80 cents US, but it then dropped to a low of 72.17 cents US in October amid a strengthening U.S. dollar. It has hovered near the 74 cent mark in recent weeks, ending Friday at 74.25 cents US.

“The produce section is going to be the wild card,” Charlebois said. “Currency is one of the key things that could throw things off early in the winter, and that’s why produce is the highest category.”

Vegetables could see the biggest price spikes, with estimates pegging cost increases will rise as high as 8%, the report said.

In addition to currency risks, much of the produce sold in Canada comes from the United States, which has been struggling with extremely dry conditions.

“The western U.S., particularly California, has seen strong El Niño weather patterns and droughts and bacterial contaminations, and that’s impacted our fruit and vegetable suppliers and prices,” said Simon Somogyi, campus lead at the University of Guelph and professor at the Gordon S. Lang School of Business and Economics.

“The drought is making the production of lettuce more expensive,” he said. “It’s reducing the crop size but it’s also causing bacterial contamination, which is lessening the supply in the marketplace.”

Prices in other key food categories like meat, dairy and bakery are predicted to soar up to 7%, the researchers found.

The Canadian Dairy Commission has approved a farm gate milk price increase of about 2.2%, or just under two cents per litre, for Feb. 1, 2023.

“The increase for February is reasonable but it comes after the unprecedented increases in 2022, which are continuing to work their way through the supply chain,” Charlebois said of the two price hikes of nearly 11 per cent combined in 2022.

Meanwhile, seafood is expected to increase up to 6%, while fruit could increase up to 5%, the report said.

Restaurant costs are expected to increase 4% to 6%, less than supermarket prices, the report said.

Rising prices will push food security and affordability even further out of reach of Canadians a year after food bank use reached a record high, the report said.