Why your mac and cheese is way more expensive than last year

Canadians hoping to avoid the worst of soaring food prices might want to cut back on caesar salad, buttered toast and mac and cheese. Lettuce, butter and pasta — key ingredients for these perennial favourites — are among the foods with the highest price spikes over the past year.

Statistics Canada last week reported the average price of food in Canada has soared by 8.8 per cent, forcing about a quarter of Canadians to cut back on their grocery bills in an effort to adapt. But those increases haven't been equally distributed, with the price of some foods jumping nearly twice as much as others.

"There's a number of things that are at work when it comes to (the price) of food items," explained Rick Barichello, a professor of food economics at the University of British Columbia. The weather has a "big impact" because of how it impacts production, but supply chain disruptions, widespread inflation and increased demand also play a role.

Prices are also dictated by so-called commodity futures, or the price investors and traders guess future crops of commodities like wheat or palm oil will cost when they are harvested. This price varies in response to extreme weather like droughts or floods, geopolitical forces like the war in Ukraine and global trade regulations. Each item is influenced differently by these forces — that's why some foods have seen their prices jump by nearly a third, while others have increased more slowly or stayed relatively stagnant since last June, he explained.

Moreover, the price changes tracked by the federal government are averages drawn from several data sources, explained University of Dalhousie food economist Sylvain Charlebois. They do not necessarily match the prices Canadians see in the grocery store, the result of stores setting their prices to account for additional expenses like salaries and building costs.

Canada's National Observer dug into the five items that have seen the largest increases to see what sets them apart.

Cooking oil — up 28.8%

Cooking oils like sunflower, palm and canola have seen prices jump by nearly a third in the past year, impacting the cost of everything from french fries to baked goods. This increase was triggered by the war in Ukraine, the world's largest exporter of sunflower seed oil before Russia invaded.

Concerned about the war's impact on domestic cooking oil supplies, Indonesia — the world's largest palm oil producer — implemented a three-week export ban on palm oil. Because palm oil is a key ingredient in everything from food to detergents and cosmetics, Indonesia's ban meant demand outpaced supply, sending prices soaring and triggering price increases in other cooking oils used as substitutes.

Pasta — up 20.6%

The cost of pasta has ballooned by nearly 20 per cent on average over the past year. The increase came from North America's 2021 drought, which curbed yields of durum wheat, the basic ingredient for pasta, in Canada and the U.S. For instance, Canada exported 44 per cent less wheat last year than in 2020, according to Statistics Canada. Higher trucking costs, driven by the rise in oil and gas prices, are another factor in higher pasta prices.

Lettuce — up 18.4%

Lettuce might be mostly water, but the price of this salad staple has skyrocketed over the past year. Most of Canada’s lettuce comes from the U.S., where prices have swelled by nearly 61 per cent in recent months, according to the U.S. government. The increase has been driven by lower-than-normal supplies — a consequence of farmers planting smaller crops to protect themselves from sudden drops in demand triggered by the pandemic. Shipping costs from California are also likely a factor.

Butter — up 17.5%

The cost of butter has soared, due mostly to rises in milk prices. Canada's dairy prices are set by the Canadian Dairy Commission, a Crown corporation that limits how much milk farmers can produce under the supply management system. In exchange for these limits, it guarantees farmers a price for milk that's high enough to cover the cost of production.

In response to rising costs for dairy producers, the commission in February increased the price of milk by about 8.4 per cent. Last month, the organization announced an unusual second price increase in a year, bumping prices up 2.5 per cent. While these increases have pushed up the price of all dairy products, butter has been particularly hard hit because it is the most valuable and in the shortest supply.

Fish — up 13.4%

Fish prices have increased by an average of about 13.4 per cent over the past year, according to Statistics Canada. The problem is "clearly" transportation, said Charlebois, with the high cost of fuel a key force driving up prices. Some fisheries, like sockeye salmon, have also seen smaller harvests recently as a result of factors like climate change or overfishing cutting into available supplies.