Just 1.5 months into a year to reach FFD seems pretty good.
But is it?
Canadian Federation of Agriculture says FFD is happening earlier and earlier each year due to the great work farmers are doing. For example, last year, FFD occurred on Feb. 14, 2013.
A Better Farming article on this issue quoted some "experts" who suggested the earlier FFD was due to greater competition among the grocery chains, thereby lowing food prices. Interesting opinion, but I have a different viewpoint.
Yes, I agree that Walmart, Sobeys, and Loblaws are maneuvering to gain (or keep) market share and loyalty. However, food prices are going up, not down. I'd like to know where these "experts" from George Morris Centre at Univ. of Guelph do their grocery shopping.
Don't just look at the price per box or can. Note that the amount squirted into the container is also dropping. Whether you get less in the can, or the price on the can goes up, you're paying a lot more for food.
For example, look what has been happening to chicken prices. A steady increase of 3.54% per year increase for more than 17 years.
Globe & Mail reported in June 2013 that during the last 5 years, food prices were up an average of 19% while non-food items went up 10.7%.
"Statscan report shows: Meat saw an 18-per-cent increase over the five years, the cost of eggs rose 25.8 per cent, nuts increased by 32.6 per cent, while coffee and tea grew by 26.8 per cent. The cost of fresh vegetables rose 12.6 per cent, but seafood only increased by 5.7 per cent. Food purchased from restaurants increased 14.5 per cent."
How do we explain it when we hear our local Food Bank has 70% more clients now than just 3 years ago, a 20% per year increase?
How do we square that FFD statistic with the huge inflation we have seen in grocery store prices in the last 5 years?
That same Better Farming article suggests that Canadians spent 0.7% less on food in 2012 than in 2011.
My question is:
Was that 0.7% reduction in food expenditures in 2012 due to a voluntary choice, or did our wallets just run empty?
Does any of this make sense?
To find out, I tried to get Statistics Canada to do up the data, but they say they have no budget to do so. I thought it would carry much more weight coming from them, rather from me, Mr. Nobody. Besides, it's always easier to pawn your work off to somebody else.
I wanted the data as median, not averages, for if there is any distribution that is super skewed, its income levels, and the only hope of truly understanding what is going on is to look at median values.
Unfortunately, that isn't going to happen, so I had to spend the time myself to tease the available data into the next best thing, which is the graph at the right.
Here we can see the Household Savings (ie. the money we have left over after we pay all our bills), as a % of the Disposable Income (ie. all the money our Canadian households have coming in from any and all sources, such as jobs, self-employment, stock dividends, pensions, EI payments, welfare, or whatever). To ensure we can see trends over time, we need to look at the data in constant dollars, so the impact of inflation (or deflation) is removed.
The data clearly shows a huge decay in our ability to save money from all our activities. In short, we're on a treadmill, going round and round, but not getting anywhere. The faster you work, the faster the belt goes around, the more tired you get, but you're still stuck in the same place. The smart guy is the one who sits down on the belt and takes it easy; you get just as far as the someone running flat out, day and night.
Our rate of savings has been dropping by 8.76% per year for the last 33 years. Our household savings get cut in half, and then halfed again, every 8 year. That's an exponential collapse of society. While under mathematical theory, you never quite get to zero, that will be small comfort when you look into your cupboards and fridge and see nothing but a half empty jar of mustard.
The drop is so consistent and predictable, you can set your watch by it. I can't use the alternative expression "You can take it to the bank", because we just don't have any money left to take to a bank.
As of Sept. 30, 2013 we're at just 4.4% by StatsCan data, but our trend line says the average Canadian savings rate is just 1.73%. This difference may be just rounding error, or survey sampling variability, but I believe the long term trendline is probably closer to the truth.
Since these are Canada-wide household averages, they have huge scatter in the data (ie. similar to putting your one foot into an ice water bath, and the other foot into boiling water, and on average, it's a nice warm bath; same problem with averages for household savings). Some Canadian households are still OK, while others are totally destitute. However, on average, we're all in big trouble; all except the 1%'ers.
Because the graph uses averages, and the average value is currently 1.73% (ie. pretty close to zero), and we know that income is a highly skewed distribution so the vast majority of Canadians find themselves below the average curve, I suggest the vast majority of Canadians are already below water, have a chronic cash shortage every month, and get by with putting their funding shortfall on their HELOC (Home Equity Line of Credit), a bank loan, or their credit cards.
They likely buy a $2 lottery ticket each week, as they won't miss the extra $2 expense in the grand scheme of their large monthly shortfall, and if they win the lottery, their financial worries for that year will be over. It's their only hope.
Lotteries: A tax on the dumb and desperately poor.
You may be interested in seeing similar data on the collapse of the Middle Class in the US by Prof. Elizabeth Warren of Harvard University (currently she's a US Senator).
The US data shows for a median family of Mom, Dad, and two kids, comparing between 1971 and 2005 (ie. one generation separation), what they spend on an inflation adjusted basis.
The 2005 median family spends:
- 52% less for appliances,
- 32% less for clothing,
- 24% less per car owned, and
- 18% less on food.
- 1,375% lower savings
- 1,071% more revolving debt (ie. credit card debt)
- 100% more for child care (didn't exist in 1971 as an expense for most families),
- 76% more for housing (median house purchase price has gone through the roof, while interest rates are way down, and the average house size grew from 5.8 rooms to 6.1 rooms),
- 74% more for health care,
- 52% more for cars (2 cars in 2005 vs. 1 car in 1971), and
- 25% more for taxes.
However, if someone in the home gets sick, or one of the parents lose their job (or their hours are cut back), or an unexpected expense hits (eg, car maintenance, leaky roof, etc.), or there is separation or divorce, that family goes over the financial cliff, never to return.
With both parents working full-time (or trying to find work), they need 26+26 pay cheques each year to survive, pay the mortgage, etc..
With both parents working, you have twice the risk of somebody getting sick and can't work, twice the chance of having a car accident, twice the risk of somebody losing their job, etc. Today, there is double the risk of missing a pay cheque, as compared to 1971. Miss just one pay cheque, and it's over the cliff you go. There's no room for an error, nor to stop and take a breath.
Who designed this system, anyway? Can we not see a disaster coming right at us?
So why is food spending dropping?
It's because most of us don't have any other choice. For example, once you sign up for a mortgage, you have a deadline that must be met every month for the next 1 to 5 years. Mortgage means "Death Pledge" in French, and they weren't kidding.
Everybody now agrees that Canadian real estate is the most expensive in the world, and well into bubble territory. Add to this rosy scenario the growing probability that Canadian real estate values will soon be dropping 30% to 90% in value (most likely a 60% discount from today's prices). What happens if most people (73% of Canadians own their own home) get caught with a big mortgage on a house that isn't worth what they paid for it? Remember hearing what happened in the US starting in 2007? It will be Canada's turn next.
Same goes for your car payment, making the minimum balance payment on the credit card, etc. There is little to no flexibility in the vast majority of family expenses. They want their pound of flesh each and every month, rain or shine.
The only choice most families have today is whether they put something into their grocery carts, or leave it on the shelf. That is why food expenditures are going down. Soon, too many people are going to be staring at the cans of cat and dog food and wondering just how bad it could taste, and if lots of ketchup could sufficiently disguise the true origin of this mystery meat.
As we "dumb down" our food purchases, we will have some significant long term consequences for our health. See Health Consequences of Food Monopolies
CBC Television reported on a recent Harvard School of Public Health report that it costs $1.50 per person per day to eat healthier foods. That study is somewhat limited because its definition of "healthier" is low fat cookies vs. regular cookies (neither of which I would call "healthy"), lean meats, high fiber, and Canada Food Guide Pyramid or equivalent; all of which is carbohydrate rich.
Our SFPFC healthy diet study found that true healthy eating is far more expensive, for food prices go up by 895.3% if we try to drop the carbohydrate consumption by 25.9%. However, none of this is feasible for the 4 million Canadians who struggle every day with getting sufficient food, let alone healthy food, onto their family table.
It doesn't have to be this way. We could have some financial relief just 30 days from now.
We could put the Supply Management System on 90 day notice (minimum notice period under Farm Products Agencies Act, Federal legislation, to cancel an Agency) to get their affairs in order, as the import tariff at 285% today will start coming down. Everybody will be able to afford chicken again. Chicken could become affordable once again, the least expensive meat available. Per capita chicken consumption rate might just increase again.
Will Canadian politicians force the public so far down into the financial mud that we start swapping innovative recipes for dog food meat loaf, or will they give Canadians what they want and deserve:
Affordable, safe, and nutritious food.