Opinion: Stretchflation sneak as groceries get pricier, not just bigger (2024)

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Opinion: Stretchflation sneak as groceries get pricier, not just bigger? ›

Opinion: Stretchflation sneak as groceries get pricier, not just bigger. The trend of stretchflation, where the size of a produce increases, but the cost rises disproportionately, appears to have arrived in Canada.

In 2024, prices for most food categories are predicted to change at a rate below their 20-year historical average. Beef and veal prices increased by 0.5 percent in June 2024 and have increased for four straight months.

Higher production, labor and fuel costs that have rippled through every aspect of the food system. Supply chain disruptions caused by global events, severe weather and disease that have affected many essential crops and livestock.

For one, the pandemic has caused a shortage in many materials due to a prolonged disruption in the labor force and supply chain, which has increased demand, and the prices of these goods, to rise.

Many complex contributing factors to food inflation—extreme weather events, global supply chain issues, geopolitical instability, high energy costs and a weak Canadian dollar compared to the U.S.—are impossible to control.

Probably not,” said Ricky Volpe, an ag economist and associate professor at Cal Poly. “The best we can hope for is that food price inflation is going to continue to slow down,” he said.

By Household Size

According to the USDA guidelines, you might spend $979 a month on a thrifty plan, $1,028 on a low-cost plan, $1,252 on a moderate-cost plan and $1,604 on a liberal plan. The USDA guidelines can provide a starting point for a food budget, but they don't consider all the variables that can affect cost.

1. California. In California, the average weekly grocery spending is $297.72.

But in Morningstar's second quarter “U.S. Economic Outlook,” researchers predict that 2022 will have the highest rate of inflation, as measured by the PCE price index, at 5.2%, before dropping. Caldwell estimates that the inflation rate will average around 1.5% between 2023 and 2025.

While bird flu is generally the main culprit for the price of eggs going up, there are other factors, such as the cost of labor and the high price of chicken feed. March 27, 2024, at 3:26 p.m. Why Are Eggs So Expensive Right Now? You may have to rework your budget and shop around to help combat rising egg prices.

Will prices ever go back to normal? ›

They're most likely gone forever. That's because prices, on average, are a one-way ticket, generally rising over time, and falling only when something has gone wrong with the economy. Officials at the Federal Reserve who set the nation's monetary policy are determined to keep it that way.

America's affordability problem is most glaring in the housing market. The one-two punch of high home prices and elevated mortgage rates caused by the Federal Reserve's war on inflation has made the housing market historically unaffordable. Housing is often the biggest expense for families.

Companies are also using advances in technology to find new methods of price gouging. They're now using new pricing strategies and data collection to charge people more. They call these tactics “dynamic pricing” and “personalized pricing algorithms.”

In 2022, the data in Canada's Food Price report shows that men aged 31 to 50 spent $324.66 per month in food expenditures. For women of the same age, they spent $291.25 per month on average in 2022. This is an increase of a staggering 10.3% over 2021.

Between December 2023 and April 2024, Zimbabwe was the country with the highest level of real food inflation worldwide. Compared to the previous year, food prices had increased by 46 percent in Zimbabwe. Argentina ranked in second place with 20 percent.

When considering the cost of food in Canada, some grocery prices can be slightly higher than in the US for staples like meat and vegetables. However, for most people, the difference might be negligible.

In 2024, inflation is expected to nearly hit the Federal Reserve's 2% target rate, though that will likely come with slower economic growth, the nonpartisan Congressional Budget Office said in December.

Data from the Consumer Price Index (CPI) — a key metric from the Bureau of Labor Statistics used to measure inflation — show that prices increased 3 percent between June 2023 and June 2024.

Bread now costs over $2 per pound — $2.03, to be exact, as of January. Last January, the same pound cost just $1.89 for a year-over-year increase of 7.7%. A standard loaf of sliced white bread weighs 20oz, which means a loaf costs about $2.54, so $20 can buy you just shy of eight loaves.