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Extreme weather events such as fires, floods, heat waves and droughts pose an increasing risk to Canada’s food supply chain, putting pressure on prices all the way to the grocery store shelf, experts say.
“Anytime you have major weather-related events, it tends to increase costs,” said Frank Scali, vice-president of industry affairs at Food, Health & Consumer Products Of Canada.
These types of events are becoming more frequent and intense in Canada and around the world.
A 2019 federal government report said temperatures are projected to continue to rise, driven by human influence, while precipitation is also expected to increase.
The weather plays a big part in food production, and factors such as too much or too little heat or humidity can affect not only the amount of food produced, but also the incidence of pests and diseases, says Amanda Norris, senior economist at Farm Credit Canada.
“The weather can also affect activities further down the supply chain,” he said. “For example, you may have damaged infrastructure due to flooding that changes transport routes and the ability to move those products along the food supply chain.”
Shortages caused by extreme weather can also push food prices higher if supply can’t meet demand, he said.
According to a July report by the Canadian Agri-Food Policy Institute, the agriculture industry has recently faced a “cascade of challenges”, including climate change, with the ripple effects of these winds reverberating through the supply chain .
In a survey for the report, respondents from the industry as well as members of government identified extreme weather as one of the main risks to the agricultural sector.
A major flood in BC three years ago hit farmers hard, with hundreds of thousands of chickens and other farm animals dying after atmospheric rivers caused floods and landslides.
Drought in 2023 strained crop production in Saskatchewan, with output down nearly 11 percent, two years after a historic 47 percent decline in production due to extreme heat and drought in 2021.
The agricultural industry has been able to make itself a little more resilient to things like drought by changing some of its practices, says Tyler McCann, managing director of the agri-food policy institute, such as using a no-till technique to retain more moisture for in. the earth Those practices can’t protect crops from the most extreme weather, he says, but they help in other years.
Extreme weather in other parts of the world can also affect farmers if input costs, such as fertiliser, rise, or if there is a major crop shortage that messes up commodity prices, McCann said.
“An extreme weather event in China or India at the wrong time could have quite significant, devastating consequences, because there really isn’t enough wheat in the rest of the world to make up for the potential losses,” he said.
While farmers often see direct impacts from extreme weather events, for those further along the supply chain, such as manufacturers and processors, the impacts are usually indirect, Scali said.
In general, supply chains are designed with the lowest cost in mind, which means the risk of disruption is higher, he says, such as having one large factory instead of several smaller ones, or being dependent on single source for important input. Disrupting one part of the supply chain can create a “domino effect,” he said.
However, the COVID-19 pandemic and resulting supply chain snarls have shown companies that the lowest-cost option is sometimes too risky, Scali said. Many companies have mapped their supply chains, turning to multiple sources for inputs or identifying backups.
“It’s really put everyone a step ahead,” he said.
But these kinds of changes can’t mitigate all potential disruptions, Scali said, and shortages and price volatility are likely to worsen.
Extreme weather doesn’t just affect the goods themselves, it can also disrupt transport.
Fires in Western Canada are the latest example, Scali said, where rail lines were shut down.
“Yes, you can put things on lorries, but there is never enough lorry capacity in the country to compensate for the railways. So things will be delayed, and it will become more expensive,” he said.
If it’s a one-time disruption, the company usually tries to absorb it, he said, but longer-term disruptions or changes usually mean prices will have to rise.
Canadians can notice the effects of extreme weather on their food in two ways: when prices rise, and when items suddenly become unavailable.
In November 2022, lettuce prices rose amid shortages of iceberg and romaine, attributed to a virus in a major lettuce growing area in California. The following spring, the valley was hit by heavy rain and storms, causing flooding.
Earlier this year, the future of prickly cocoa highlighted the effects of high temperatures, weather conditions and diseases in West Africa, where crop yields were damaged.
Orange juice prices saw a similar rise this spring, as floods and drought damaged harvests in Brazil, a year after Spain and Florida suffered lower orange production amid drought and Hurricane Ian, respectively.
Strawberries are also at risk. According to the University of Waterloo, the berries are expected to become more scarce and costly as temperatures rise. He noted that Canada is a major importer of strawberries from California.
This year, many of the food categories that saw volatility in recent years have stabilized, Michelle Wasylyshen, spokeswoman for the Retail Council of Canada, said in an email. However, the current extreme heat in Western Canada and the United States could affect some prices in the fall and winter, he said.
Geopolitical conflicts are adding to the mix, he said. “The ongoing conflict in Ukraine has made us more dependent on Canadian grain, so when extreme weather affects that, it has a bigger impact than before.”
— With files from The Associated Press
This report was first published by The Canadian Press on August 12, 2024.
(Except translation, this story has not been edited by achinews staff and is published from a syndicated feed.)
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