GRAYDON: Production costs soaring, survey finds

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Soaring production costs far outpace consumer price inflation and weaken critical domestic manufacturing and supply chains, new survey of major Canadian food, health and consumer products manufacturers shows from Canada.

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Food, Health and Consumer Products of Canada (FHCP) surveyed its members in July and found that the cost of inputs has increased by 23% since 2021 and a remarkable 35% since 2020. expect these cost increases to continue through 2022. By comparison, experts like Dr. Sylvain Charlebois of Dalhousie University have assessed that consumer food price inflation is showing signs of improvement and may not hit the 10% peak previously forecast this year.

As Simon Somogyi, University of Guelph Arrell Chair in Food Commerce, noted earlier this year: “The cost of everything in the food supply chain is getting so high and c It’s the same for farms, wholesalers, packers and processors all the way to retailers.

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Rising production costs and consumer price inflation are a global phenomenon. From ingredients like wheat, produce, even coffee to glass and cardboard packaging to shipping containers – supply is down, costs are up and demand is exploding. Some of these shortages are a direct result of the pandemic, while others can be attributed to a perfect storm of other factors such as drought, fires, freezes and backed up ocean shipping channels.

Droughts have hit Canada’s barley, wheat and canola crops, now affecting production of everything from baked goods to beef. The frost in Brazil has reduced the world coffee supply. Wildfires from British Columbia to California have slowed fruit and vegetable harvests. The list is lengthened increasingly.

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Due to these factors and more, 65% of FHCP survey respondents said the company’s performance was worse in 2021 than in 2021, and 70% expect to miss their performance targets. for 2022. Canadian manufacturers are faring worse than their international counterparts — 72% of companies responding to the FHCP survey said their Canadian companies are worse off than their US counterparts.

  1. EDITORIAL: Inflation in Canada is rising again

  2. Prime Minister Justin Trudeau speaks during a press conference in Bowen Island, British Columbia, Tuesday, July 19, 2022.

    LILLEY: Trudeau still won’t act as inflation hits another 40-year high

  3. (FILES) This file photo taken December 4, 2015 shows a Canadian flag waving in front of the Peace Tower on Parliament Hill in Ottawa, Canada.  Consumers in Canada paid 1.2% more for goods and services in July than a year earlier, as house prices and transport costs rose, the government statistics agency said on August 18. 2017. Inflation was slightly lower than analysts had expected, after a rate of 1.0% the previous month.

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The rising cost of manufacturing the goods Canadians rely on every day has only compounded the challenges in Canada’s already inhospitable business environment. Even before the pandemic, only 25% of major Canadian food and consumer goods manufacturers said they were looking to expand production in Canada. Nearly 50% said they were considering expanding their business elsewhere.

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The good news is that, according to a national consumer survey conducted on behalf of the FHCP at the end of 2021, 82% of Canadians have a better understanding than before the pandemic of the factors that can affect the supply of food and other essential food items and 93% want the government to prioritize these supplies.

As we head into another COVID fall, supply chains are still far from normal, but manufacturers continue to work at breakneck speed to do their part to ensure a stable and resilient supply of food, health and consumer essentials that Canadians rely on every day.

Michael Graydon is CEO of Food, Health and Consumer Products of Canada (PFHC). For more information, visit or

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