Weather impacting cost of groceries more than tariffs, expert says

The predicted jump in grocery prices next year has more to do with what’s happening outside than it does with tariffs, according to one expert.

Stuart Smyth, a professor in the Department of Agricultural and Resource Economics at the University of Saskatchewan, was one of the contributors who provided insight and direction on Canada’s Food Price Report, which was released on Thursday.

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The grocery prices in 2025 were already 27 per cent higher than they were five years ago, and the report suggests food will continue to get more expensive.

Based on the report, overall grocery prices are expected to rise by four to six per cent in 2026. The hardest-hit product will likely be meat, with an anticipated price increase of five to seven per cent.

But despite what some people may assume, Smyth said tensions with the United States and other countries aren’t the core cause of the price increases.

While the report acknowledges that “tariffs have meant increased costs and price volatility for businesses,” which ultimately trickles down to consumers at the store, Smyth said most of the goods crossing the border are compliant with the Canada-United States-Mexico Agreement.

“The tariffs really have a very marginal impact,” he said.

According to Smyth, a lot of the predicted price increase –specifically for meat – has been driven by the drought that impacted beef herds in southern Alberta and southwest Saskatchewan this year.

The dry conditions forced farmers to reduce the size of their herds because “they just don’t have the feed or the pasture” required to maintain as many animals, he said.

The consequence is Canada has fewer cattle than it’s had “at any point since the late 1980s,” Smyth said, noting the change is reflected in the retail price of beef.

Also raising the cost of meat products is the rise in avian flu this fall, which has been attributed to milder temperatures.

“We should expect to see poultry prices impacted by that through the first part of next year,” Smyth said.

Effects of wildfires on food prices

Despite the wide range of factors contributing to higher prices, Smyth said this past summer’s wildfire season isn’t one of them.

While talking to farmers, Smyth said he heard the fires were actually beneficial for food production, because they came at a time when temperatures typically peak.

The smoke “acts as a buffer to reduce the surface temperatures when crops were flowering,” he said, allowing “crops to flower longer (and) have higher yields.”

According to Smyth, many farmers who thought they had an average crop were “absolutely amazed” when they pulled it in with their combines.

No end in sight

Grocery prices have been rising for years, and Smyth said that trend is unlikely to change anytime soon.

“I just don’t see anything significant coming in the next couple of years that’s going to provide the relief,” Smyth said.

Smyth said Canada has typically enjoyed lower food prices than other parts of the world, like Europe and Australia. But with food processing being consolidated at a global level, he said Canadians are going to start paying more for exporting.

Reversing course would require investments into research and development, according to Smyth, allowing for innovations in crop variety and livestock genetics.

“That’s going to allow producers to increase their yields as climates change,” he said, helping “keep prices down.”

In the short term, Smyth said there needs to be more moisture in the ground for meat prices to drop over the next couple of years. Smyth said if there’s enough rain in 2026 and 2027 to restore pastures, some of the pricing pressures could ease.

But even if change isn’t in the forecast, Saskatchewan is still going to fare better than some other provinces, at least when it comes to meat prices. The report predicted that Saskatchewan’s food prices will stay around the national average, while prices in five other provinces are likely to rise above the average.

Smyth said that’s partially due to Saskatchewan’s proximity to Alberta.

“We’re right next door to where beef is being processed, right? And the transportation costs to get it from Calgary to Saskatoon are pretty insignificant compared to Calgary to Montreal or other regions of Canada,” he explained.