The rise in prices for wheat-based food products
Description: The rise in prices for wheat-based food products
The food supply chain consists of many essential steps that move products from producers to consumers. Canadians paid more for bread, pasta and cereal at the grocery store in March 2022 amid higher costs to produce and move wheat-based food products.
Year-over-year cost increases in the food supply chain in March 2022
Production
Canadian farmers grappled with rising input costs, resulting in the price for grains rising 65.1%.
| Inputs | Year-over-year percentage change |
|---|---|
| Pesticides and other agricultural chemicals | +33.9% |
| Energy | +27.8% |
| Agricultural wages | +8.3% |
Processing and packaging
Food manufacturers paid 63.8% more for raw wheat.
| Inputs | Year-over-year percentage change |
|---|---|
| Plastic bags | +7.2% |
| Paperboard containers | +15.4% |
| Manufacturing wages | +6.6% |
Transportation
| Inputs | Year-over-year percentage change |
|---|---|
| Diesel fuel | +76.5% |
| Truck transportation | +20.6% |
| Freight rail (grain and fertilizer) | +7.5% |
Wholesale and retail
| Inputs | Year-over-year percentage change |
|---|---|
| Wholesale food margins | +11.8% (Q1 2022) |
| Retail grocery store margins | +8.8% (Q1 2022) |
| Wholesale and retail trade wages | +6.9% |
Consumer prices
Following higher input costs, Canadian shoppers paid more for wheat-based food products year over year, with prices remaining elevated into the summer and fall of 2022.
| Date | Year-over-year percentage change | ||
|---|---|---|---|
| Bread, rolls and buns | Breakfast cereal and other cereal products (excluding baby food) | Dry or fresh pasta | |
| Jan-20 | +2.7% | +0.3% | +0.0% |
| Feb-20 | +1.5% | +0.2% | +4.5% |
| Mar-20 | +2.8% | +1.4% | +2.8% |
| Apr-20 | +2.7% | +5.0% | +5.1% |
| May-20 | +0.8% | +4.9% | +7.8% |
| Jun-20 | +0.3% | +2.5% | +9.4% |
| Jul-20 | -1.4% | +2.0% | -0.8% |
| Aug-20 | -0.4% | +1.7% | +1.9% |
| Sep-20 | +0.3% | +0.7% | -1.5% |
| Oct-20 | -0.3% | +0.3% | +2.6% |
| Nov-20 | -1.7% | -0.5% | -0.6% |
| Dec-20 | +0.1% | -0.2% | -2.8% |
| Jan-21 | -3.2% | +1.0% | +0.7% |
| Feb-21 | +2.0% | -0.6% | -0.2% |
| Mar-21 | -0.5% | -0.7% | -2.5% |
| Apr-21 | +0.2% | -2.8% | -9.2% |
| May-21 | -0.1% | -4.1% | -13.7% |
| Jun-21 | -0.2% | -0.6% | -11.2% |
| Jul-21 | -0.1% | +1.0% | -2.0% |
| Aug-21 | -0.4% | +0.9% | -6.1% |
| Sep-21 | +1.1% | +3.0% | +5.2% |
| Oct-21 | +1.0% | +3.3% | -6.4% |
| Nov-21 | +3.0% | +7.8% | +6.0% |
| Dec-21 | +5.1% | +6.8% | +6.7% |
| Jan-22 | +7.5% | +6.7% | +12.6% |
| Feb-22 | +3.7% | +8.5% | +12.0% |
| Mar-22 | +9.1% | +12.3% | +25.8% |
| Apr-22 | +12.2% | +15.0% | +30.1% |
| May-22 | +11.1% | +13.1% | +25.3% |
| Jun-22 | +11.9% | +11.3% | +31.7% |
| Jul-22 | +15.4% | +11.0% | +29.9% |
| Aug-22 | +17.6% | +12.9% | +32.4% |
| Sep-22 | +17.0% | +16.7% | +29.7% |
| Oct-22 | +17.0% | +17.8% | +44.8% |
External factors
Low supply
Lower production in 2021 (-37.1% year over year), caused by drought conditions in the Prairies, lowered supply.
| Year | Canadian wheat production |
|---|---|
| 2019 | 32.7 million tonnes |
| 2020 | 35.4 million tonnes |
| 2021 | 22.3 million tonnes |
| 2022Note * | 34.7 million tonnes |
|
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Russia’s invasion of Ukraine
With both countries being major wheat producers, this conflict created uncertainty in the global wheat market.
Sources: Statistics Canada, Estimated production of principal field crops, Employee wages by industry (average hourly wage rate), Farm Product Price Index, Industrial Product Price Index, Raw Materials Price Index, Wholesale Services Price Index, Retail Services Price Index, For-hire Motor Carrier Freight Services Price Index, Freight Rail Services Price Index, Consumer Price Index.
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