Western Standard - The Food Professor says, buy beef, stockpile coffee, do it now

00:00:00.000 Good evening, Western Standard viewers, and welcome to Hannaford, a weekly politics show.

00:00:21.740 It is Thursday, May the 15th.

00:00:23.960 I don't think there's a Canadian alive who isn't complaining about the cost of groceries. 1.00

00:00:29.080 Certainly, I hear about it every night over dinner.

00:00:32.480 More scientifically, Statistics Canada concedes that inflation is hitting groceries harder than other things.

00:00:38.840 Last month, food was up 3% year over year.

00:00:43.100 Meanwhile, in their newsletter, Loblaws is calling for more and worse as tariffs start to bite.

00:00:49.960 With me tonight is Dr. Sylvain Charlebois, who thinks about these things all the time.

00:00:56.060 Dr. Shalawa is the director of the Agri-Food Analytics App at Nova Scotia's Dalhousie University.

00:01:02.360 Dr. Shalawa, welcome to the show.

00:01:04.540 Well, thank you for having me.

00:01:06.260 Oh, it's a pleasure.

00:01:07.240 As we were saying just in the pre-show chat, my wife is a big fan and is eagerly hanging on,

00:01:13.360 looking for hope, I think, as she goes to the grocery.

00:01:17.400 We want to talk today about whether we can believe the evidence of our own till slips.

00:01:21.960 It feels like food is up 10% year over year, and yet the official numbers say it's only 3%.

00:01:28.940 So what do you see out there?

00:01:32.680 Well, typically, that's what happens when you have a food inflation rate be higher than the general inflation rate.

00:01:41.000 People will notice higher food prices.

00:01:44.160 Produce is higher compared to January.

00:01:47.120 dry goods in the center store pantry goods are much more expensive now and the freezer aisle is

00:01:54.720 also quite problematic these days so those are sections where we've seen higher prices but we

00:02:00.660 are expecting higher prices throughout the year but we're not talking 10 or 20 i know a lot of

00:02:06.700 people are confused if they hear 25 tariffs they think oh food prices are going to go up by 25

00:02:13.380 percent that's not exactly how it works uh in december we did uh release candace food price

00:02:19.380 report we are expecting uh food prices to increase by about five percent by the end of this year

00:02:26.940 now five percent is not 25 but it's it's not nothing it is uh it represents about eight hundred

00:02:34.100 dollars more for a family of four for the entire year so and a lot of people out there just don't

00:02:40.080 have that kind of money so it's it's it is going to be challenging compared to 2024. I get the

00:02:46.220 feeling that when you tell me that it certainly coincides with what I observe as we go through

00:02:53.320 the till and we pay and you know it's a lot of money for somewhat less and yet Statistics Canada

00:03:01.660 tells you it's three percent and that's actually good because before it was four percent and five

00:03:08.000 percent in 2022 and 23 so why is it so hard to rely on official numbers why are they so different

00:03:18.360 from what we experience in the grocery store so you you're opening up a can of worms here

00:03:24.820 as an academic i can certainly attest that there is a data deficit in canada uh the picture that

00:03:31.040 we get every month from statistics canada is is always lagging a little bit uh when you actually

00:03:36.680 you do some spot checks and when you actually look at prices and what actually is going on

00:03:41.660 out there, you can sense that there is a disconnect between what is actually going on versus what is

00:03:49.680 being measured by Statistics Canada. But the reality in Canada is that we only have Statistics

00:03:55.420 Canada. There's not much we can do about that. Unlike the US where I actually work sometimes,

00:04:00.820 I actually have colleagues at Texas A&M, for example. American academics have access to way

00:04:06.260 more data. So you have a better sense of what's happening. So that's why there is a lot of

00:04:11.800 frustration out there. Consumers are frustrated because they're not sure exactly what's going on.

00:04:16.800 Media is also quite frustrated because we don't have much data to work with to really convey to

00:04:22.020 the public an actual factual image of what actually is going on with food inflation.

00:04:29.020 The other thing that we notice fairly frequently is that things we're accustomed to be able to

00:04:35.220 find easily are either find with difficulty or not available at all something just disappears

00:04:42.460 from the shelves for three weeks at a time and finally it comes back usually yeah um and if you

00:04:48.820 ask in the store they say oh well you know the supply chain is broken well i guess it must be

00:04:54.400 but what is there something particular that is happening in the supply chain other than the

00:05:03.200 normal seasonal shortages of green groceries?

00:05:08.020 Yeah, the disappearance of certain brands

00:05:11.320 or the renewal of certain relationships

00:05:16.020 up the food chain is actually quite normal.

00:05:19.880 Every year we expect about 20% of products

00:05:23.680 that you would find in a grocery store today

00:05:26.460 not to be there next year.

00:05:29.060 So there's always a turnover of inventory

00:05:32.920 And of course, many products do fail to add commercialization.

00:05:39.180 So we are expecting a bit of a turnover.

00:05:41.140 So the empty shelves that you see, either there's a stock shortage, there are supply

00:05:47.860 issues, but it's mostly because there's some realignment with shelves.

00:05:53.440 For example, a grocer will just let go of a supplier and is renegotiating with its new

00:06:01.040 supplier.

00:06:01.460 In the last few months, it's been incredibly volatile. Why? Because of the pivoting. A lot of grocers had to source food beyond the United States. Canadians just weren't buying American products in the middle of winter.

00:06:17.560 And so a lot of grocers have to pivot and find grapes in South Africa, find produce in Egypt and other places to make sure that Cays actually had something to buy during their visit to the grocery store at an affordable price.

00:06:36.860 I see. All right. Well, that does answer somewhat the question.

00:06:40.880 And Loblaws, before we leave the United States tariff situation, in their newsletter, which I just happen to have here, the food inflation report comes out of Loblaws is, I mean, for the benefit of viewers who may not follow the numbers as closely as you do, I think there's something like 2,400 stores across Canada that are owned by Loblaws under different brand names from No Frills to, I don't know what they all are.

00:07:09.180 Shoppers, actually. Shoppers is a big piece of Loblaw, absolutely.

00:07:15.160 Well, okay. So Loblaws, as a public service, puts this very, very, very good newsletter out.

00:07:23.240 And their headline for the last one was that tariffs are going to cost Canadians more for food.

00:07:31.520 So I would hope that Loblaws knows what it's talking about and is not giving us incorrect information just to scare us.

00:07:40.960 But how does the tariffs affect food that you don't import?

00:07:47.020 Because you were not American. 0.99

00:07:49.200 Loblaws' communication strategy is really interesting because we do have quite a few grocers in Canada.

00:07:54.640 But Loblaw is the only one trying to get ahead of what's happening with inflation, warning consumers about what's happening up the food chain.

00:08:06.300 And I think it's a smart way to do it.

00:08:08.700 So they have this T right next to prices right now.

00:08:12.860 If you go into a Loblaw-operated store, you'll know whether or not a product was impacted by tariffs if you see a T right next to the price.

00:08:21.980 Yeah, absolutely.

00:08:22.640 And just yesterday, Pure Bank, the CEO of Loblaw, who's been on my podcast, the Food Professor podcast, he actually acknowledged that the number of products with a T was at 1,000 right now.

00:08:38.600 But that number could increase to up to 6,000 over the next few weeks because of counter-terrorists implemented by Ottawa.

00:08:47.480 The concern that Loblaw would have is that a lot of Canadians just don't understand how terrorists actually work

00:08:54.980 They think that if Trump applies terrorists on Canadian imports, it impacts Canadians

00:09:02.340 Not necessarily, it's the response from Ottawa that will impact the lives of Canadians

00:09:07.920 And so I think that's really the message that Loblaw is trying to convey here

00:09:12.000 and those counter tariffs will impact an increasing number of products because

00:09:18.080 well they're running out of inventory so the inventory that was not subject to tariffs before

00:09:24.000 say March the 4th now are subject to tariffs and prices are likely to increase for many categories

00:09:32.940 so that's kind of the warning that we got from Loblaws in that newsletter and yesterday on LinkedIn

00:09:39.380 but you're not saying that i think you talked about getting grapes from south africa a few

00:09:46.620 minutes ago you're not saying that if we bring in grapes from south africa that the canadian

00:09:53.940 government is tariffing those it's just american products is that correct that is correct exactly

00:09:58.980 so then why would the south african grapes have a tea beside them no they they wouldn't they wouldn't

00:10:06.860 It's just products coming from the U.S.

00:10:09.700 Or let's say that there's an ingredient bought by a manufacturer in Canada that comes from the U.S.

00:10:16.240 That was tariff.

00:10:17.660 That product would likely have a T as well.

00:10:20.100 But if you actually are importing grapes from Peru or South Africa, that wouldn't have a T.

00:10:26.180 But the problem, I'm sure you can understand that getting grapes from South Africa instead of California

00:10:32.580 will cost you more as a distributor to get those grapes into Canadian stores.

00:10:38.140 So eventually something will need to be adjusted price-wise.

00:10:45.960 So actually, when we apply a tariff to American imports of food, we're hurting ourselves.

00:10:54.000 Pretty much.

00:10:55.240 What I didn't expect, to be honest, is that a lot of Canadians don't seem to understand that concept at all.

00:11:02.580 And so we had the elbows up campaign and people were expecting Ottawa to retaliate, which is fine.

00:11:10.940 But the challenge here is that we are at a disadvantage for a few years.

00:11:15.800 One, we're up against 25% of the world economy, which is the United States.

00:11:20.020 That's a massive piece right there.

00:11:21.980 And two, their economy is much stronger than ours right now.

00:11:26.780 If you look at the unemployment rate, it's pretty idle.

00:11:30.360 the Fed, the Federal Reserve is not cutting rates, whereas in Canada, the Bank of Canada

00:11:36.600 is cutting rates. That's a sign. That's a sign that confidence is not necessarily there for

00:11:43.060 Canada. The cane dollar is basically the same, has the same value versus the American greenback

00:11:50.640 for months now, despite the fact that American policies have actually hurt the American dollar.

00:11:58.400 And so that's another sign. And lastly, and this is the most important one, food inflation is actually dropping in the US. So America can afford to implement tariffs on goods coming into the US because their economy is much more competitive, much more productive.

00:12:18.900 Consumers are not as much in debt as well.

00:12:22.680 And so you have all that happening in the U.S.

00:12:25.140 While in Canada, people are losing their jobs.

00:12:28.740 The GDP per capita is not increasing.

00:12:31.260 There's no wealth creation as much as in the U.S.

00:12:34.080 So right now, I think what Loblaw is trying to say, along with Walmart in the U.S., is

00:12:41.920 that the tariff game is a dangerous one, especially for Canada, because we're just not in a good

00:12:48.720 position economically to go against the Americans, especially right now.

00:12:56.560 Could you, if you live close to the border, is it worth doing your groceries across the

00:13:03.540 border?

00:13:04.960 Can you give us a few examples of, you know, butter, eggs, bread, that sort of thing?

00:13:09.180 It depends where you live.

00:13:10.700 uh i mean i would say that right now not necessarily with the exception of perhaps

00:13:17.580 some dairy products and some meat products particularly poultry you may find some good

00:13:23.160 deals but i've actually been in the u.s three times the last six months and i i do go to grocery

00:13:29.360 stores all the time so i went to uh oklahoma texas and new york and uh each time i didn't

00:13:39.160 see much of a difference because of the conversion rate. I mean, our dollars at around 71 US cents

00:13:46.780 versus $1. So obviously you have to pay more than a 30% premium to get the same amount of food. And

00:13:54.420 that's certainly not helping cross-border shopping. So my only comment about this is that you will

00:14:03.720 not necessarily save but you will have more more choices you will have more choices there are more

00:14:10.920 choices offered to canadians for sure okay um you know i do recall that prior to the last u.s

00:14:19.320 election on november the 5th that uh food prices egg prices were were one of the the trump talking

00:14:28.200 points. He managed to convince Americans that that was the fault of the administration, the Biden

00:14:34.580 administration. And I'm hearing now that they actually are coming down a bit. And I think you

00:14:41.100 confirmed that. It's just that they hadn't come down enough to really make it worth driving a

00:14:45.760 long way to reap the savings. That's correct. And so I think President Trump is partially correct

00:14:54.660 in blaming the former administration because the avian flu was not very well managed in the U.S.

00:15:00.640 at all. They lost control way before Mr. Trump was elected. And of course, the implications

00:15:06.500 came after with the loss of flocks and birds. And we're talking over 200 million birds that

00:15:14.020 had to be called. So obviously, egg prices became a problem early in 2025. But things are actually

00:15:22.540 getting back to normal slowly in most states so uh the beauty of the poultry industry is that

00:15:29.660 it can recover very quickly the production cycle is eight to nine weeks so if you if you are to

00:15:37.280 experience say a swine flu impacting the hog industry uh the recovery uh time is is is longer

00:15:45.520 because of the production cycle that is longer it's three to four months for example eight weeks

00:15:51.020 All right. I have to ask you this. How much has the carbon tax been responsible? And I'm not just talking about the 20 cents a liter or whatever it was on gasoline and diesel. I'm talking about the fact that the carbon tax is incurred at every level of production.

00:16:16.980 How much is the carbon tax responsible for our high food prices in Canada?

00:16:22.060 Well, this is the one question that I've received countless times in the last couple of years for sure.

00:16:29.140 Why? Because the Canadian government has never bothered to assess how the carbon pricing policy implemented through the carbon tax would impact food affordability in Canada.

00:16:40.720 The true answer to your question is that we can't really tell because food prices at retail are impacted by several factors, several factors, including the weather, our own behavior, what we buy, what we don't buy will impact prices, eventually promotions, loss leaders.

00:17:02.600 So it's very difficult to correlate the policy with retail prices.

00:17:07.580 However, our lab, we've done some work in this area only to realize that there is a strong correlation between wholesale prices, so prices up the food chain versus the carbon pricing policy.

00:17:22.440 And you can see that really the common tax has compromised the entire sector's competitiveness, which could eventually impact prices and how prices are set at retail.

00:17:39.460 That's as far as anybody can go.

00:17:42.120 If you hear an economist saying that there is no relation, there is no impact, or there's a huge impact, both of them are wrong, because you can't really state for sure exactly how the carbon tax is impacting food prices over time.

00:17:58.520 Okay, well, fair enough then.

00:18:01.880 I don't want to leave people without hope, Doc.

00:18:09.180 That's a good strategy.

00:18:10.620 You know, it just seems we have the big grocers saying it's going to get worse, and certainly the evidence every time you go to the stores seems to be getting just that little bit more and sometimes that rather much more expensive to buy the thing that you went in there for.

00:18:30.400 Yeah. So two questions. First is, would you care to venture a long-term prognosis on how this is going to play out? Does this just keep going or is there some reason to think that you're going to hit a plateau at some point?

00:18:49.960 And then the second thing is, what can the consumer do about it?

00:18:56.240 Should they stockpile things that keep, for example, in the belief that, you know, you're going to be in a year's time paying, eating something that you paid last year's prices for?

00:19:09.920 What can you do?

00:19:10.940 Absolutely.

00:19:11.740 Well, there's a stockpiling.

00:19:13.960 I would stockpile one thing, and that's coffee.

00:19:16.080 coffee has gone way up and i don't see how prices will will go down the other product is beef beef

00:19:24.420 is very expensive and we're not expecting prices to drop either so if you see any of these two

00:19:29.740 products on sale buy as much as you can for sure but i am i am hopeful that things will stabilize

00:19:37.520 The challenge that we have right now coming out of the Trudeau regime is that we have seen many policy-induced inflationary phenomena, essentially.

00:19:54.300 The GST holiday, to me, was a bad idea because you're basically playing around with market conditions, allowing opportunistic pricing to occur.

00:20:08.120 As soon as you actually eliminate a tax temporarily, retailers, restaurant operators will actually cover the spread.

00:20:15.420 And that's kind of what we think has happened in the last several months after the GST holiday.

00:20:22.680 And of course, we've talked about the carbon tax compromising our food security.

00:20:28.640 There's been other issues, the bureaucracy, interprovincial trade barriers.

00:20:33.680 But we're having discussions right now to eliminate all that or to at least look at some of the nonsense from a policy perspective.

00:20:44.380 And that's a good sign. That's a good sign.

00:20:46.840 So I'm hopeful that the new government, led by Mark Carney, will look at food security through an economic lens to make sure that there's no one left behind.

00:21:01.600 Because the last 10 years have been really, really tough for many Canadians, especially the younger generations.

00:21:10.500 The cost of living issue is real for many, many Canadians.

00:21:15.040 well yes i mean you just you would probably is it your lab that follows the food bank numbers

00:21:25.040 that's correct absolutely i'm actually keynoting the food bank of canada

00:21:29.600 convention in june in montreal so i work very closely with you mean there's a convention for

00:21:35.440 food banks we have that many and after in fact the convention is to raise money and awareness

00:21:42.400 for food banks, so it's a good

00:21:44.500 cause. Well, I'm sure it's

00:21:46.520 a good cause, but I mean, how appalling

00:21:48.620 in a country like Canada that

00:21:50.480 not only are there food banks and people

00:21:52.360 using them, but there are so many of them

00:21:54.560 that they actually need to get together once a year

00:21:56.640 to shop.

00:21:58.440 I mean, this is what you expect out of the

00:22:00.500 energy industry or, you know,

00:22:02.600 the teachers' unions or something, and the food

00:22:04.540 banks are getting together to have a convention?

00:22:07.860 I'm of the

00:22:08.620 mind. I'm not sure what

00:22:10.660 your opinion is on this

00:22:12.260 on this particular issue, but I'm of the mind that food banks are here to stay.

00:22:16.580 I mean, I know that some Polymerians believe that they should disappear.

00:22:21.780 The advantage that food banks have, and we saw that during COVID,

00:22:25.820 they can actually turn on a dime and operationalize help,

00:22:32.000 targeted help to help Canadians.

00:22:36.920 Governments can't do that.

00:22:38.400 They can't, within days, pivot and offer support and help to people who just lost their jobs.

00:22:45.540 Market failures will continue to happen.

00:22:47.980 And I'm a capitalist at heart, but market failures will continue to occur.

00:22:54.160 And I think the best unit that can actually help, which can actually help Canadians and are well-equipped to do that, are food banks.

00:23:04.000 Well, I don't have a principled objection to food banks.

00:23:06.200 I just think it's a shocking thing that in a wealthy country like Canada, it should be necessary to have them.

00:23:12.680 It's shocking to see so many people needing them, for sure.

00:23:16.800 Yes, exactly.

00:23:18.760 Look, we are out of time.

00:23:21.540 One last question, and that is, is Canada unique in having this problem, or is the whole world finding food more expensive?

00:23:30.840 Right now, if you look at the G7, for example, we're average.

00:23:36.200 we're average. The thing about Canada, though, is that we shouldn't be average. We should actually

00:23:41.680 have a lower food inflation rate because we are north of the only food superpower on earth.

00:23:49.400 And North America is a bit of a food security bubble. So having a food inflation rate of

00:23:55.960 3.2%, which is well above 1% compared to the US, is really unexcusable. We should actually have a

00:24:05.940 lower food inflation rate than what we have now.

00:24:10.440 Dr. Sylvan Charlebois, the food professor.

00:24:14.420 This has been fascinating. Thank you so much for taking the time to come

00:24:17.940 on the show. We really appreciate it. And I know there are an awful lot of people

00:24:21.940 take what you say very seriously.

00:24:26.360 Again, it's an honor to have you. So, thank you.

00:24:30.020 Thank you very much for the invitation. For the Western Standard, I'm Nigel

00:24:33.880 Hannaford.

00:24:35.940 We'll be right back.

Western Standard - May 16, 2025

The Food Professor says, buy beef, stockpile coffee, do it now

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