Rising grocery prices: Can buying locally help lower the bill?

Pandemic disruptions and geopolitical tensions

The pandemic is affecting the food supply by slowing the rate of production. COVID-19 has been at the root of a slowdown—and sometimes even a complete interruption—of overseas transportation services when positive cases have been reported by port workers in China. Increased demand for non‑food items imported from Asia has also had an impact on transportation costs: By the summer of 2021, the price of sea containers had risen by almost 400%.

The crisis in Ukraine, geopolitical tensions, and economic sanctions imposed on Russia—one of the world’s top three wheat exporters—are also likely to have an impact on the cost of groceries. Rising oil and gas prices will push up food processing costs in Europe, which could lead to higher prices for Quebec consumers of these products.

When climate change is part of the equation

The food supply is also being pressured by systemic factors such as rising global demand, labour shortages, and climate disruptions.

In the summer of 2021, climate change caused a severe drought in the Canadian Prairies that had a catastrophic effect on the yields of several field crops. While Canada normally plays a key role in the global food supply, Statistics Canada harvest data shows that Canadian wheat, canola and barley production in 2021 recorded their steepest declines ever.^{Note de bas de page 1}

This has brought Canadian production back to the level of a decade ago, and will result in direct price increases for food staples such as pasta and cereals. Furthermore, given the importance of these crops for livestock feed, the likely result will be indirect price increases for other foods, such as dairy products.

Local sourcing to lower the bill?

One finding from data on Canadian field crops is that large-scale production in a given region (wheat, barley and canola) is more vulnerable to shocks than local production such as corn (3.1% increase in production) and soybeans (slight decrease of 1.4%). This supports the premise that local food production can bolster supply resilience by helping to increase global supply and improving the capacity to deal with shocks.

Another aspect of local sourcing that can help reduce the food bill is lower packaging and transportation costs for food destined for local markets. Packaging costs are pushing up food prices because of the almost 40% jump in the prices of glass, cardboard, steel, and plastic resin since the start of the pandemic. Soaring prices at the pump add a further cost increase that also must be taken into account. These costs are significantly reduced when a product does not have to be packaged to withstand transportation over a long distance.

Local products in response to the increases

It has also been noted that increased demand for world-renowned local products (champagne, for example)—which continue to be in limited supply—has bumped up prices and reduced the availability of these products. For local producers, this scarcity translates into opportunities, as Quebec products replace luxury products on our tables. A good example is the development of Quebec’s alcoholic products niche, including microbrewery beer, ice cider, natural wine, and spirits made from forest products. As these products flourish, we see how consumers can locally source high‑quality products at a lesser cost than if they were to choose imported products.

Luxury products are not the only products that can find their way into the grocery baskets (and hearts!) of local buyers. Agri-food producers are vying for originality as they develop resources native to Quebec to replace commonly used products. Whether they be derived from camelina, milkweed, or forest mushrooms, these new products aim to seduce new fans who are thinking not only of their palate, but also of their wallet and the environment.

Even though adopting local alternatives and changing consumer habits will clearly not be enough to curb the expected increases, the local market remains an option to consider for Quebec households looking to save money. By combining products that are actually cheaper with products that contribute to the resilience of the food supply, eco‑responsible products and products that showcase the richness of Quebec’s land, the entire economic fabric benefits from a greater reliance on the local market.