Report shows overall food prices will rise 3 to 5 percent next year
A family of four could pay $800 more for groceries in 2025 because of climate change, labour challenges, new policies and geopolitical events, says a report published Thursday.
The 2025 Food Price Report used artificial-intelligence modelling, combined with expert input, to forecast overall food-price increases of 3 to 5 per cent next year. Meat is predicted to increase by up to 6 per cent, followed by vegetables and restaurant bills at 5 per cent. The report predicted increases of only 1 to 3 per cent for fruit and seafood.
Last year, the report, which is in its 15th year, predicted an overall food-price increase of 2.5 per cent to 4.5 per cent, in line with latest data from Statistics Canada. However, questions remain about how accurate predictive models – even those using the latest in AI to comb through vast quantities of data – can be during periods of intense volatility.
Any number of unexpected events could threaten global food production and supply chains, for example extreme weather or the major tariffs proposed by U.S. president-elect Donald Trump.
The food price report, a collaboration between experts at three universities and the Vector Institute for Artificial Intelligence, used data stretching back to 1986 from the Consumer Price Index, among other sources. This information was crossed with data on the impact of changes in domestic policy, geopolitical strategy and climate to forecast food prices in 2025.
The report forecasts that, at an annual cost of $4,809, a boy between 14 and 18 years old will be the most expensive type of Canadian to feed, followed by a pregnant woman under 18. The average family of four – a man, woman, girl and boy – will spend around $16,800 on food in 2025, compared with $16,000 in 2024. One man and one woman, both over 50, will spend around $8,000 on food in 2025, the report says.
These calculations assume that Canadians are making and eating food at home, and do not include service expenses, such as delivery fees.
The analysis veered toward a worst-case scenario, said Kristina Kupferschmidt, an author of the report and researcher at the University of Prince Edward Island’s school of mathematical and computational sciences.
“We did try to overpredict rather than underpredict because the consequences are so high for the average Canadian as they’re budgeting,” she said. In 2024, for example, a number of food prices fell below the worst-case predictions.
However, the report, based on historical data, doesn’t account for unprecedented events, said Evan Fraser, an author on the report and director of the Arrell Food Institute at the University of Guelph.
For example, on Nov. 26 the Canadian dollar dropped to its lowest level in four years after Mr. Trump’s announcement that he would impose 25-per-cent tariffs on Canadian imports. A weaker Canadian dollar would increase the cost of food that crosses the border alongside boosting the cost of U.S. products essential to Canadian farming operations, the report said.
This is just one example of how novel factors could radically alter the cost of food.
For decades, food economists have predicted the cost of food based on three underlying assumptions: oil would be cheap; it would be easy to move people, ideas and food across borders; and weather would follow reasonably predictable patterns, Mr. Fraser said.
When one of these factors changed – for example in the OPEC oil crisis of the 1970s – food prices globally veered into unpredictable territory, he said. However, Canadians are now facing volatility on all three fronts.
“The last 10 days in particular and events over the past five years have made me really worried that sometimes we’re underestimating the scale of the problem that we’re facing,” Mr. Fraser said.
“The only thing that will be surprising is stability.”
Other examples of price changes owing to extreme events include the increased cost of olive oil, beef or Sriracha – a popular hot-pepper condiment – as a result of various worldwide droughts, said Michael von Massow, a food economist at the University of Guelph who was not involved in the 2025 food price report. And further potential Trump policies – notably the mass deportation of illegal immigrants – would radically disrupt the agricultural labour force in key sectors such as vegetables and meat processing.
“The only thing that is for sure is that food prices are going to be more variable than in the past,” Mr. von Massow said.
To combat high prices – and hedge against this volatile climate – consumers might change their purchasing habits. For example, they could switch beef (which has increased by 9.2 per cent since September, 2023) for other sources of protein, such as fish or pork, the report said.
However, Mr. Fraser says the onus to make food affordable shouldn’t land only at consumers’ feet.
“We need to be more thoughtful and more ambitious as a nation about where food fits and how we prioritize it and how we invest in it.”
This article was first reported by The Globe and Mail
