Food Prices Could Rise by Up to 5% in 2025, and Experts Cite the Loonie as a Factor

Food Prices Could Rise by Up to 5% in 2025, and Experts Cite the Loonie as a Factor

An annual report on food prices in Canada is forecasting continued increases in grocery costs for 2025. The Food Price Report, released Thursday, predicts significant price jumps in certain categories, including meat and vegetables, as well as higher costs for dining out. However, the report also notes that some food prices in 2024 were lower than initially predicted.

How Much Will Food Prices Rise?

According to the report, overall food prices are expected to increase by three to five percent in 2025. This rate is notably higher than the Bank of Canada’s inflation target of one to three percent. For an average family of four, this could translate to an additional $800 spent on groceries throughout the year, or about $66 extra per month, if inflation hits the upper end of predictions.

Food Inflation in 2024: A Slower Climb

In 2024, food inflation rose by 2.8 percent, which was at the lower end of the 2.5 to 4.5 percent range predicted by academics in the previous year’s Food Price Report. This meant a $436 increase in grocery costs for a family of four, bringing their total food expenditure to $16,032. Had inflation reached the higher end of estimates, the family would have spent an additional $264.

Key Predictions for 2025

The Food Price Report highlights three key categories where Canadians are likely to see the biggest price jumps:

  • Meat
  • Vegetables
  • Restaurant meals

These categories are expected to drive overall food inflation higher in the coming year.

A Global Perspective

Sylvain Charlebois, the lead researcher of the Food Price Report and a professor at Dalhousie University, noted that Canada is not alone in facing food inflation challenges. “In Germany, the food inflation rate is starting to rise again at the same level as Canada,” Charlebois stated in an interview from Berlin.

AI’s Role in Predicting Food Prices

For the first time, the researchers used several artificial intelligence models to help forecast food prices. While AI provided insights, human experts also weighed in to validate the results, ensuring the accuracy of predictions.

Challenges Ahead for Families

“We are expecting a difficult year, unfortunately, for families,” said Charlebois. The anticipated increases will likely strain household budgets, especially as grocery bills continue to rise faster than overall inflation targets.

Recap of the Food Price Report

The annual Food Price Report is a collaborative effort by several Canadian universities, including:

  • Dalhousie University
  • University of Guelph
  • University of British Columbia
  • University of Saskatchewan

The report aims to provide Canadians with a comprehensive outlook on food cost trends and their implications for households.

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Final Thoughts

While food price inflation slowed slightly in 2024, the forecast for 2025 suggests a return to steeper increases. Families should prepare for higher costs, particularly in essential categories like meat and vegetables, as well as dining out. Keeping an eye on these trends and planning grocery budgets accordingly will be crucial in the year ahead.

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