2024-08-12 18:02:40
Extreme weather events are posing increasing risks to Canada’s food supply chain, putting pressure on prices on grocery store shelves. Here’s how, according to industry experts.
“Every time there’s a major weather event, costs tend to increase,” said Frank Scali, vice-president of industrial affairs at Food, Health and Consumer Products Canada, which brings together food manufacturing companies.
In Canada and around the world, extreme weather events such as wildfires, floods, heat waves and droughts are becoming more frequent and severe.
Temperatures are expected to continue to rise, driven by human activity, while precipitation is also expected to become more abundant, a 2019 federal government report said.
Amanda Norris, senior economist at Royal Farm Credit Canada, said weather plays an important role in food production, with factors such as heat or humidity affecting not only the amount of food produced but also the prevalence of pests and diseases.
“Weather can also affect activities downstream in the supply chain,” she noted. For example, infrastructure can be damaged by flooding, changes in shipping routes, and the ability to move these products along the food supply chain. »
supply and demand
She noted that shortages caused by extreme weather events could also push up food prices if supply fails to meet demand.
According to a July report from Canada’s Agri-Food Policy Institute, the agricultural industry has recently faced “a host of challenges,” including climate change, with a domino effect ripples throughout the supply chain.
In a survey conducted for this report, industry respondents and members of government identified extreme weather events as one of the biggest risks facing the agricultural sector.
The massive flooding in British Columbia three years ago had a severe impact on farmers: Hundreds of thousands of chickens and other livestock died after an “atmospheric river” triggered flooding and landslides.
Photo Martin Tremblay, Los Angeles Times Archives
A flooded farm in Abbotsford, British Columbia, November 2021
The 2023 Prairie drought put pressure on Saskatchewan agricultural production: yields fell by nearly 11%, following a historic 47% drop two years ago due to extreme heat and drought.
Tyler McCann, president of the Canadian Agri-Food Policy Institute, said the agricultural industry has been able to become more resilient in the face of factors like drought by changing some practices, such as using direct seeding to retain more moisture in the soil. He said these practices cannot protect crops from the most extreme weather events, but can help improve conditions in subsequent years.
Mr. McCann said extreme weather events in other parts of the world could also affect Canadian farmers if rising costs for inputs such as fertilizer, or shortages of a key crop lead to higher market prices.
“An extreme weather event in China or India at the wrong time could have quite severe and devastating consequences because there really wouldn’t be enough wheat in the rest of the world to make up for the potential losses,” he said.
Mr Scully, of the Food Business Group, said that while farmers often suffered the direct consequences of extreme weather events, the impact was often indirect for those further down the supply chain, such as manufacturers and processors.
Diversification of supply
Supply chains are often designed to keep production costs to a minimum, such as having one large factory rather than several smaller ones, or relying on a single source for important inputs. But this means there is a higher risk of any disruption in one part of the supply chain creating a domino effect, he explained.
However, Sculley said the COVID-19 pandemic and the resulting supply chain challenges have shown businesses that sometimes the cheapest option is too risky.
Many companies have already mapped out their supply chains, shifting to multiple sources of inputs or developing a “Plan B” to quickly turn things around. “This really puts everyone a step ahead,” he said.
But Mr Scully cautioned that the changes would not mitigate all potential disruptions, so shortages and price volatility could worsen.
Extreme weather events don’t just affect the products themselves: they can also disrupt the transportation of goods.
Scully said the fires in Western Canada were the latest example of rail lines being shut down. “Yes, you can put things on trucks, but there will never be enough truck capacity in the country to replace rail. So things will be delayed and cost more,” he warned.
If it’s a one-off disruption, companies will usually try to absorb it, but long-term disruptions or changes usually mean higher prices, he said.
Scarcity of product
Canadians are likely to notice the impact of extreme weather events on food in two ways: increased prices and sudden shortages on store shelves.
In November 2022, lettuce prices spiked as a virus caused a shortage of cabbage and lettuce in key growing areas of California. The following spring, the valley was hit by heavy rains and storms, causing flooding.
A surge in cocoa futures prices earlier this year highlighted the impact of heat, weather and disease in West Africa, which has reduced crop yields.
Photograph by Andrew Kasuku, AP Archives
A farmer in Kenya poses with tomatoes and oranges on her three-acre farm in May, which was flooded by weeks of rain.
Orange juice prices saw a similar rise last spring as floods and drought damaged crops in Brazil, and a year ago orange production in Spain and Florida was reduced by drought and hurricanes. Ianrespectively.
Strawberries are also under threat. As temperatures rise, the berries are expected to become more scarce and expensive, according to the University of Waterloo, which noted that Canada is a major importer of California strawberries.
Michelle Wasylyshen, a spokeswoman for the Retail Council of Canada, noted that many food categories that have experienced volatility in recent years have stabilized this year. However, she warned in an email that extreme heat currently occurring in Western Canada and the U.S. could affect some prices during the fall and winter.
Geopolitical conflicts also exacerbated the situation, M recalls.I Vasilyshin. “The ongoing conflict in Ukraine has made us even more dependent on Canadian food, so when it is hit by extreme weather, the impact is greater than before. »
Associated Press
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