From Globe and Mail Update:

In a report titled Food Inflation: Coming to a Grocery Store Near You, (CIBC World Markets economist Avery) Shenfeld noted that while consumers are seeing higher costs of grain prices in food such as bakery products and pasta, that has been offset by stable or falling prices for other products, partly because of the strong Canadian dollar.

“Even relative to our closest neighbour, food prices have been remarkably tame in the last year,” Mr. Shenfeld said. “But after looking at what's behind that exceptional gap, it's clear that Canada's good luck on food prices is likely to run out in 2009.”

Food prices have soared globally, leading to riots in some countries and armed guards in fields and at warehouses. Prices for rice and wheat, for example, have surged, and some countries have resorted to rationing and export curbs.

This week, Sam's Club stores in the United States began restricting the amount of rice customers can buy.

Dave Wilkes, senior vice-president of trade at the Canadian Council of Grocery Distributors, said Thursday shoppers should expect prices for meat products also to rise.

“As grains and corn go up, the cost to raise cattle, pigs and poultry will also go up, and that will be translated into the cost of the final product ... in the next little while,” Mr. Wilkes said.

“The challenge that the industry is having at this front is that it's such a foundational component of the food that we deliver to Canadians every day.”

Mr. Wilkes said Canadians have already seen a 9.9 per cent rise in the price of a loaf of bread over the last year, tied directly to a 128 per cent increase in the cost of baking-grade wheat.

That has made it tougher for grocers to maintain low pricing for staple items.

“The adjustments that occur throughout the supply chain may be just beginning,” he said. “As the supplier increases their costs and translates that onto the retailer, that retailer will most likely have to reflect those changes at the shelf level.”