Weekend Reading – Food Inflation edition

Weekend Reading – Food Inflation edition

Hey Everyone!

Welcome to a new Weekend Reading edition about food inflation – a very hot topic.

Before some of my thoughts and personal navigation on that…

I posted this recent April 2023 dividend income update, sharing some higher income momentum!

I tackled the subject of mortgage renewals and provided an answer to the fixed vs. variable mortgage debate here.

My wife and I have some very big, important goals we wish to accomplish in 2023 so I shared some updates on these financial goals here.

Weekend Reading – Food Inflation edition

Dang, food can be expensive!

But there are ways to combat this…

More about that in a bit…

The good news is, food inflation seems to be easing a bit.

Not that prices are ever going to go back down. 

While inflation seems to be cooling thanks to our rapid rise in interest rates over the last few quarters, according to the latest data from Statistics Canada, some food items continue to rise in price. Buyer beware!

The Consumer Price Index (CPI) released April 18 shows inflation rose 4.3 per cent year-over-year in March following a 5.2 per cent increase in February.

That’s good but it also means that food prices are simply rising less quickly, hopefully signalling the worst of the grocery price hikes could be behind us. We’ll see. 

I don’t know about you but when I shop, I see some sticker shock in the grocery store aisles at times. Some products are up 15-20% year-over-year.  

We don’t eat much pasta but I read that this item rose about 15% when compared with a year earlier. We don’t bake too much around our place either but those supplies jumped as well. More detailed data is available at Statistics Canada.

I mean, food is so costly that I read somewhere that 1/3 of Torontonians, who are now accessing food banks in that city from time to time, have full-time jobs. I don’t have the facts on this but even if that is remotely true….yikes. 

In another source, Canada’s Food Price Report 2023 predicts a 5% to 7% food price increase this year. So, prices are not expected to go down, maybe just slow down. 

Weekend Reading - Food Inflation edition

Source: CTV News.

How might you fight inflation?

Back in March 2022, over a year ago, I had my suspicions about inflation and seriously doubted any experts that believed inflation was going to be “transitory”.

To be honest, I didn’t believe any one of them…

Weekend Reading – Inflation isn’t going back to normal

Even earlier than that post, I highlighted our thoughts about how to invest to prepare for higher inflation, in January 2022 knowing it might not slow down for a few years:

How to invest for higher inflation

Because we enjoy simplicity in our lives, we developed this simple plan of investing attack: a focus on these sectors and companies in these sectors to own more of over time to help fight inflation. 

“Based on my thesis above, you’ll find the following sectors should help fight or beat inflation:

  • Energy
  • REITs
  • Consumer staples (think products you buy or use every day)
  • Financials
  • Utilities
  • Commodities”

In our portfolio, as examples, the following companies have increased their dividends in just 2023 alone:

  • Energy – Canadian Natural Resources (CNQ), Pembina Pipeline (PPL), TC Energy (TRP).
  • Consumer – Procter & Gamble (PG).
  • Financials – Equitable Bank (EQB), Great West Life (GWO), Manulife (MFC), BlackRock (BLK), Sun Life (SLF). 
  • Utilities – Bell Canada (BCE), Telus (T) (I consider these utilities in many respects), Southern Company (SO). 
  • Commodities – Nutrien (NTR). 

So, what I’m saying is, I try to eat my own cooking good, bad or indifferent!

But beyond investing, there is of course the day-to-day navigation of food inflation to manage.

While we cannot control the actual prices of food and related goods that come into our home, we can be very selective in how we plan, shop and also mitigate food waste. We will continue to practice the following:

    1. Shop for deals. We look for deals on apps like Flipp to monitor what’s on sale to help with #2. 
    2. Plan all meals. Beyond the odd takeout meal, we pretty much plan most meals week by week. My wife is awesome at this for us…but I also help with #3.
    3. Continue to monitor our existing stock. This allows us to use up any existing supplies and buy in bulk as needed and where it makes sense, to, finally….
    4. Shop and stick to the list. My wife is excellent at this, I’m not, when it comes to potato chips. This is why I should not go shopping when I am hungry!

via GIPHY

How are you controlling food inflation? Any tips or tricks to share beyond my basics? Send them my way in a comment!

More Weekend Reading – Food Inflation edition…

To help fight sustained inflation, The Globe and Mail (subscription) shared 13 stocks that have grown their dividends more than Canadian banks. Worth a consideration, to help you fight inflation and grow more wealth over time in your portfolio too:

“But a look at dividend growth trends in the S&P/TSX 60 index of big blue chips shows the big banks are decidedly mid-pack. According to Globeinvestor, National Bank of Canada has increased its dividend by an annualized 9.4 per cent over the past five years. The other Big Six banks range from 8.9 per cent to 5.2 per cent, which compares well to the latest inflation rate of 4.3 per cent.”

Here are some of my favs from the list:

  • Alimentation Couche-Tard Inc. (ATD-T): Dividend growth of 19.9 per cent and a recent yield of 0.8 per cent.
  • Waste Connections Inc. (WCN-T): Dividend growth of 13.6 per cent and a yield of 0.7 per cent.
  • Canadian National Railway Co. (CNR-T): Dividend growth of 12.2 per cent and a yield of 1.96 per cent.
  • Canadian Pacific Railway Ltd. (CP-T): Dividend growth of 11.7 per cent and a yield of 0.7 per cent.
  • Metro Inc. (MRU-T): Dividend growth of 11.4 per cent and a yield of 1.6 per cent.

Interesting reading I finally caught up on, at Eat, Sleep, Breathe FI.

Site owner Chrissy shared one-years’ worth of Financial Independence Retire Early (FIRE) interviews by the numbers – and I was shocked to see how little some folks spend on housing, food and utilities. Some FIRE-folks are not homeowners which means some of their costs, depending on the location they live, might be lower than others but my goodness, some folks live in very low cost areas. Our property taxes here in Ottawa would rank in the top-5 on that list, in a condo no less. 

I enjoyed reading these learnings from a retirement MasterMind Group.

Dividend Growth Investor reminded readers saving and investing your first $100,000 is the hardest. 

Related to investing, it was a pleasure once again to contribute to the MoneySense edition to identify The Best ETFs in Canada for 2023.

While I feel there has never been a better time to fire your costly financial advisor and become a DIY investor, I can appreciate the process of selecting some ETFs could be overwhelming to many. From the article:

“Do-it-yourself (DIY) investors in Canada these days suffer from an overabundance of choices. There are more than 1,299 exchange-traded funds (ETFs) from 42 providers now listed on Canadian exchanges, making the task of constructing a simple “couch potato” portfolio that’ll likely do just as well as the investing pros more daunting than it has ever been.”

That said, I support many of the low-cost choices in this year’s edition that made the cut.

Let me know your thoughts including my comments in the article.

When in investing doubt, a simple all-in-one low-cost balanced ETF could do the trick. Dale Roberts highlights some ideas in this post.

Last week, Kanwal Sarai released episode 1 of 2 of our interview on his Simply Investing Dividend Podcast. Well, he just released part 2 of 2 here. Enjoy the podcast and leave me a comment about anything I mentioned! In this episode we discussed:

  • bucking any “conventional wisdom” that states as you get older you must start moving out of equities
  • my feelings on having a/any plan when it comes to investing
  • what keeps me up at night, when it comes to today’s economic climate
  • some of the personal finance advice I would give my younger-self
  • and more including my work below about…
…Knowing how to demystify the retirement income puzzle (i.e., drawing down your RRSP/RRIF, TFSA, taxable accounts, CPP, OAS, defined benefit pensions, LIRAs, inheritance, and more!) is not trivial work but it’s absolutely something we can help with.
 
If you need some help forecasting your retirement decumulation puzzle, I can support you with my partner at Cashflows & Portfolios.

If you are interested in obtaining private projections for your financial scenario, check out all the details here!

 

Cashflows & Portfolios

Less Cashflows & Portfolios work this weekend – I look forward to my brunch/lunch with you very soon, Mom! 🙂

Have a great weekend everyone. 

Mark

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

10 Responses to "Weekend Reading – Food Inflation edition"

  1. Hello Mark. Thank you for your insights and information on food inflation. As mentioned in an earlier comment having a garden is a very useful way to deal with some of the affects of the rise in food prices. Many communites make space available for folks to grow seasonal vegetables that is a real help to many. Now that we live in the city we have put in raised beds and plant intensively some of the vegetables we like ( for example tomatoes, cucumbers, zucchini. squash…. berry fruits, and a few orchard trees- plums , apple and pear) At the moment we are enjoying lots of spinach, green onions and asparagus. Today we will put out our tomato and cucumber plants. We have excellent produce that we enjoy fresh. some to preserve (freeze and dehydrate ) and much to share with others less fortunate.We are truly grateful for the opportunities we have in our community. Take care Mike

    Reply
    1. Thanks, Mike. There are a few nice community gardens in our area. We’ll do some herbs again on our terrace and we’ll continue to shop seasonal as well, which should help local farmers and our wallet.

      You sound like you live in a great area!
      Mark

      Reply
  2. Hi Mark: Yep! Grocery prices are sky high and I too have received sticker shock in the grocery aisles. I try to look for bargains which make my brother and his wife laugh as I could buy anything I wanted but I remind them that I didn’t get were I am by being frivolous. With prices up all over I have to rationalize the fact that I’m getting more from my dividends. I don’t have consumer staples but have the rest besides mining. In utilities I have FTS, EMA, TA, CU, BCE, T, and US T. In REITs I have HR , PRZ and Art. In financials I have NA, BNS.,NA, MFS. and BN. In commodities I have Nutrient and in energy I have ENB, TRP, and PPL. The dividends from these companies more than help me pay my bills plus have extra for the grocery store. Claire it may not be wise to eat before going to the store as the prices may make you sick. Mark have a good day with your mom as she probably did a lot for you while you were growing up and you only have one. Mine passed in Jan./’90 of degenerative heart disease. Dad was a hard man but that night was one of the few times he got real emotional. I still think of her.

    Reply
  3. Hi Mark,

    Food inflation is indeed a major issue. The tips you’ve shared are timeless and help a lot—whether there’s high inflation or not.

    Thanks so much for mentioning my post. It was really interesting to see various expenses compared in different regions around the world. Definitely eye-opening!

    Reply
    1. Most welcome. I was shocked by some of the numbers but you can only use what you have been given! 😉 I mean, how do two people, spend less than $5k per year on food? In another subject, how can folks spend less than $6k on housing including taxes and maintenance? My property taxes alone are $6k. Very interesting of course and everyone is different!

      All my best and have a great weekend with your family!
      Mark

      Reply
  4. I make sure I have eaten before I go to the grocery store :). Even though I have a list and what to purchase on sale, when I am hungry I find I just add to the order with food I don’t really need. I buy local, especially in the summer with fruits and vegetables fresher and cheaper
    Once the food is home, I package it in small portions and debone different cuts of meat. When there are leftovers or food in the fridge with limited shelf life, I make homemade soup. Prior to making a large pot of soup, I precook barley and rice to always have on hand to add to soups or other main meals. The easier I make it, the more I am apt to make “leftover fridge soup” and avoid throwing food in the garbage
    We now have a veggie garden but prior to that we belonged to a community garden group. Food was traded or purchased at a much lower cost than at grocery stores – organic too!
    – Claire

    Reply
    1. Great stuff, Claire. We’ll have a small garden for herbs on our condo terrace again this year but that’s more for fun/hobby vs. saving money. We enjoy summer for the same – fresh fruits and veggies. We are pretty good with our shopping lists and sticking to them. The biggest thing for us we find is avoiding food waste – we’ve gotten very good at that largely because we buy fresh foods – not much choice but to eat it! 🙂

      Have a nice weekend!
      Mark

      Reply
  5. Yup, food is costing more for sure. In some cases, a lot more.

    Today, I’m far more vigilant in the grocery store than I used to be. Before I leave home I scour Flipp. I’ve been using it for years. When I get to the grocery store my first stops are discounted produce and looking for discount stickers in the meat department. We’re totally fine with purchasing 30% off meat and freezing it. I do a lot of meal planning in front of the fresh meat bunkers!

    I used to patronize a couple of “boutique” grocery stores with high end meat counters. No longer. I visited one last weekend and walked out empty handed.

    There’s deals to be had. $3.88/lb this week for bone-in skinless chicken breast. I have no problem de-boning to avoid $6.99/lb.

    More effort for me, but it’s not a big deal to me.

    Bacon is a killer, especially when they “sneak in” the 375g sizes for 4.99 a package on sale! Not so much bacon for us anymore!!

    I do think some prices will retreat in time. I’m seeing more and more deals like the chicken above. You just have to be willing to eat what they’re willing to put on sale.

    ~James

    Reply
    1. Ya, Flipp is great. It helps to shop on foot where we can as well, avoid the car, shop local, even if it is a bit more expensive at times but a tradeoff to avoid traffic, gas, etc.

      I find dairy quite expensive now. Cheese was also a bit expensive but depending on what you eat and want, my goodness!

      Have a great weekend,
      Mark

      Reply

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