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Agriculture

Average family to pay $400 more for groceries next year, report estimates

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The average Canadian family will pay about 0 more for groceries and roughly 0 more for dining out next year, an annual food price report predicts.

Food prices will rise between 1.5 to 3.5 per cent in 2019, according to the report from researchers at the University of Guelph and Dalhousie University. That means the average family of four will spend $12,157 next year — up $411 from 2018.

Vegetables will see the biggest price jumps — between four and six per cent for the category, according to the report.

Meanwhile, meat and seafood prices are expected to fall, with the meat category to decline by one to three per cent and seafood costs to remain the same or fall up to two per cent.

Since 2015, the team has predicted prices in those two categories would rise as high as six per cent each year.

“This is a bit of a risk for us… We’ve never done that,” said Sylvain Charlebois, one of the lead researchers and a professor at Dalhousie University, referring to anticipating a decline.

But the team is confident in its prediction.

They believe there’s an oversupply of meat, he said, and Canadians are eating less animal protein. Instead, they’re showing more interest in alternative proteins, like quinoa and lentils.

The plant-based protein trend is evident in recent manufacturer and restaurant moves as well.

Meat processors Maple Leaf Foods Inc., for example, acquired two companies in this niche in recent years, Lightlife Foods and Field Roast GrainMeat Co.

At the same time, fast food chains have started adding vegan and vegetarian options to their menus. A&W Food Services of Canada Inc. even temporarily sold out of its Beyond Meat patties shortly after adding them to its menu.

Industry watchers have attributed the demand for plant-based protein to millennials, health-conscious baby boomers and concerns around antibiotic use in agriculture.

A turning point for animal protein, though, was 2014 when beef prices started to rise dramatically, said Charlebois.

Between December 2013 and December 2014 the monthly average retail price for one kilogram of ground beef rose more than 26 per cent, according to Statistics Canada data. For comparison, the price advanced about 3.5 per cent from December 2012-13. It reached a record high of $13.23 in October 2015.

“It really spooked consumers,” said Charlebois, adding they started substituting plant-based protein into their diet.

Butchers and grocers will likely take it easy on beef prices next year in an effort to bring people back to the red meat, he said.

Consumers’ embrace of plant proteins will help push vegetable prices higher next year, as will the weather, according to the report.

“Fruit and vegetables are some of the most perishable, fragile food products that are on the grocery shelf,” said Simon Somogyi, a lead researcher on the report and a University of Guelph professor.

They’re particularly influenced by climactic events, like the El Nino expected to occur this winter, he said, which can result in warmer and drier conditions, and create shortages in the supply chain.

As far as which vegetables may see the biggest increases, it’s difficult to know what produce item will become the next cauliflower, Charlebois said. The cruciferous vegetable saw soaring prices per head in 2016.

Charlebois points to lettuce and tomatoes as possible candidates for big price fluctuations. Meanwhile, Somogyi said produce imported into Canada is more susceptible to weather events and the corresponding price changes.

The report predicts more modest increases for bakery (one to three per cent), dairy (zero to two per cent), fruit (one to three per cent) and other food items, such as non-perishables, not covered by the other categories (zero to two per cent).

Restaurant prices will rise between two and four per cent, according to the report, mainly because operators’ labour costs increased as several provinces and territories boosted their mandated minimum hourly wage recently.

The researchers’ predictions for 2018 were fairly accurate. Fruit prices, which they estimated would rise between one to three per cent, stayed stagnant — the only category where they missed the mark.

Follow @AleksSagan on Twitter.

 

Companies in this story: (TSX:MFI)

 

Aleksandra Sagan, The Canadian Press

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Agriculture

PM worries China could target more Canadian goods as fears about soybeans rise

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OTTAWA — Prime Minister Justin Trudeau says he’s worried an ongoing diplomatic dispute could see China target imports of other Canadian agricultural products as concerns grow about soybean shipments in particular.

One industry leader said Thursday that, without a clear explanation, Canadian soybean exports to China plunged suddenly from 3.2 million tons over the final four months of 2018 to just 3,700 tons through the first four months of this year.

Relations between Canada and China have deteriorated since the December arrest in Vancouver of Huawei senior executive Meng Wanzhou at the behest of the United States.

China was outraged by Meng’s arrest and has since detained two Canadians on allegations of espionage and sentenced two other Canadians to death for drug-related convictions. 

Chinese authorities have also blocked imports of Canadian canola seeds, alleging they found pests in shipments, and have increased inspections and paperwork related to pork.

“When it comes to China, obviously, our top concern is the release of Canadians who are detained in an arbitrary way by the Chinese for political reasons,” Trudeau said in French on Thursday during a visit to France, where he marked the 75th anniversary of D-Day. “We are also concerned by their actions on canola and the potential of other actions on other products.”

Trudeau told reporters that he will see if it’s “appropriate or desirable” to have a conversation directly with Chinese President Xi Jinping about a number of bilateral difficulties later this month at the G20 summit in Japan.

Later Thursday, Agriculture Minister Marie-Claude Bibeau told a parliamentary committee that she’s heard concerns about shipments of Canadian soybeans to China.

Ron Davidson, executive director of Soy Canada, said in an interview that China’s purchases of Canadian soybeans collapsed at the end of last year following a run of very strong exports.

“It’s not a slowdown — it’s a virtual halt,” said Davidson, whose members have reported the drop to Bibeau. “We can see what’s happening, but we aren’t certain why.”

He said it’s not unusual to see soybean exports decrease during winter months, but the speed, magnitude and timing of the crash this time around has alarmed the industry.

Davidson said he’s received reports of Canadian soybean containers held up in Chinese ports for longer than usual as authorities there conduct additional tests. It’s possible, he added, that the drop is partly due to an increased reliance by China on soybeans from other parts of the world.

Soybeans are Canada’s third-most valuable agricultural export after canola and wheat, he said.

Any prolonged crackdown by Canada’s second-biggest trading partner on shipments of key products like soybeans and canola could deliver a blow to the national economy.

New data released Thursday from Statistics Canada showed overall exports of canola fell 14.7 per cent in April after China started turning away Canadian canola seed.

Conservative Leader Andrew Scheer’s spokesman said it’s not enough for Trudeau to be concerned because he’s not a casual observer when it comes to the dispute with China.

“He needs to actually do something,” Brock Harrison wrote in an email Thursday.

“Mr. Scheer has on several occasions urged him to take concrete steps to respond to China’s actions against Canada and send a message that Canada won’t be pushed around. He has refused to act.”

The federal government says it has tried unsuccessfully to send a delegation of inspectors to China to examine Chinese evidence of pests in canola shipments. Canada has also been unable to schedule high-level engagements on the matter despite multiple efforts.

Bibeau told MPs Thursday that Canadian scientists finally had a conversation Wednesday night with Chinese customs officials about their canola concerns.

“They agreed to have more sustained discussions, telephone conferences on the subject — and they did not close the door to the delegation,” she said. “We are still asking for that, but the conversation has been re-activated and yesterday we could feel that we were at a different level … This is encouraging.”

Earlier this week, China’s ambassador to Canada said in an interview that Chinese officials investigated Canadian canola based on regulatory and scientific principles, and provided “concrete” documents to Canada to justify their concerns.

Lu Shaye added that the relevant Chinese departments no longer maintained contact with their Canadian counterparts, suggesting the matter was closed.

—Follow @AndyBlatchford on Twitter

Andy Blatchford, The Canadian Press


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China-Canada differences go beyond Beijing’s critical, outgoing envoy: Carr

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OTTAWA — Canada’s trade minister is downplaying the forthcoming departure of China’s outspoken envoy to Ottawa, saying differences between the countries stretch beyond anything at the ambassador’s level.

In an interview Wednesday, Jim Carr said the federal government is awaiting China’s decision on its replacement for outgoing ambassador Lu Shaye, who has had harsh words for Canada during a tenure that began in 2017.

“I don’t think that personalities are what would be at the centre of the issue here,” Carr said when asked about Lu’s past criticisms.

“The job of the ambassador is to express the view of his government. I would only assume that whatever is being spoken by the Chinese ambassador to Canada has the full support of the government, so this is an issue that goes beyond the ambassadorial level.”

Sources say Lu, who appeared to be more comfortable speaking French than English, will leave his Ottawa post in the coming weeks for a new position in Paris. Lu, 54, has also served as China’s ambassador to Senegal and as a counsellor for its foreign service in France, according to a biography on the embassy’s website.

His departure comes at a time, as Lu himself described in an interview Tuesday, of “serious difficulties” between the two countries.

Canada’s relationship with its second-biggest trading partner has deteriorated rapidly since the December arrest of a senior Huawei executive in Vancouver following an extradition request by the United States.

China was outraged by the arrest of Meng Wanzhou and has since detained two Canadians on allegations of espionage, sentenced two Canadians to death for drug-related convictions and blocked key agricultural shipments such as canola.

Lu has used strong words when talking about the relationship — for example, he has called Meng’s arrest the “backstabbing” of a friend and evidence of white supremacism.

He also warned of unspecified “repercussions” if the federal government bars Huawei from selling equipment to build a next-generation 5G wireless network in Canada.

Lu was critical of Canada before Meng’s arrest. Soon after arriving in Canada, Lu said he was struck by the negative view of China that he saw taking shape. In a 2017 interview, he blamed the Canadian media for disseminating a negative portrait of his country that depicted it as an abuser of human rights and of lacking democracy.

He said Canadian politicians sometimes had to “bow before media.”

In Lu’s interview Tuesday with The Canadian Press, he said China was not to blame for the ongoing dispute.

“But the Chinese government is waiting to make a joint effort with the Canadian side and meet each other halfway,” he said without specifying the necessary steps toward a resolution.

When asked about the possibility of freeing Michael Kovrig and Michael Spavor — the Canadians detained in China on espionage charges — Lu said their fates are in the hands of Chinese authorities. On China’s rejection of Canadian canola imports over Chinese allegations of pests, he considers the matter closed.

Carr said the Liberal government still hopes to solve the bilateral differences by engaging China on many levels, not just through an ambassador.

“We will reach out to whomever is in that place and make the same arguments to him or her that we’re making now,” Carr said before leaving for Japan on a trade mission to find new markets for Canadian products, including canola.

Carr said Canada is still keen to send government inspectors to China to explore evidence of pests in the canola shipments. But, he added, China has not invited Canadian experts to do so, and there has been no high-level engagement on the matter despite Canada’s efforts.

This week, China increased inspections of Canadian pork products over its concerns about smuggling and African swine fever — an illness that can be devastating among pigs. It came in addition to previously stated Chinese complaints over the labelling of Canadian pork.

Asked Wednesday if the inspections were a sign the dispute had reached a new level, Agriculture Minister Marie-Claude Bibeau declined to speculate and said: “I don’t want to escalate the situation.”

Word of Lu’s departure comes at a time when Canada does not have an ambassador in Beijing. Last winter, Prime Minister Justin Trudeau fired Canada’s ambassador, John McCallum, for going off-script in the government’s efforts to win the release of Kovrig and Spavor. Before his posting to Beijing, McCallum was a longtime Liberal MP and cabinet minister.

Former Canadian diplomat Colin Robertson, who is now vice-president of the Canadian Global Affairs Institute, said Lu’s departure presents an opportunity to reset the relationship.

“We need to find a way to engage,” he said. “Not having ambassadors who are reliable or trusted is a major handicap.”

Lu did a good job of publicly reflecting the Chinese government’s positions and “seemed to take relish in putting it to us,” Robertson added.

“His words aggravated the situation. Behind closed doors ambassadors are also expected to find solutions and try to nuance divisions. Here I see no evidence of serious effort by Lu Shaye.”

Andy Blatchford and Mike Blanchfield, The Canadian Press

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