The El Nino (Little Boy) weather phenomenon generally serves as something of a mixed blessing as far as its effects on North American produce. The impact of the phenomenon, which occurs due to an increase in ocean surface temperatures across the central and east-central equatorial Pacific, maintains certain general consistencies such as increased precipitation in the south west United States. That said, the phenomenon ultimately varies from year to year, making it somewhat unpredictable – particularly so in tandem with the rapidly shifting climate taking place all over the globe.
With this year’s iteration, the strongest El Nino in at least 20 years beginning to take shape, we thought it might be a good idea to take a look at the potential impact for the Canadian produce market in the context of a dwindling Canadian dollar.
Firstly, the previously mentioned trope of increased precipitation in the SouthWest has proved particularly true this year, with California seeing extreme downpours as far back as October, resulting in costly and hazardous landslides in the region. However, these early downpours were seen as more of a precursor to El Nino proper, and the first storm that could be directly attributed to the phenomenon took place in the beginning of January, hitting California, Arizona and New Mexico.
For Canada, the effects of this year’s El Nino on United States produce will be of particular interest as the rapidly falling Canadian dollar continues to take its toll on the country’s economy. The Canadian fruit market is largely dependent on imports, with about 81% of all produce consumed in the country annually coming from foreign markets and the US in particular. As a result, market prices are largely dependent on the Canadian dollar value, and with the loonie recently falling to 69 cents US for the first time since 2003, produce is liable to be increasingly expensive this year. In terms of specific figures, The University of Guelph’s Food Institute estimated that in 2015, Canadians spent about $325 more on produce than previous years, and should expect an additional increase of $345 in 2016. With this in mind, an El Nino resulting in healthy and plentiful produce seasons in the Western US might help to curb price increases in the Canadian market by a significant degree, though it isn’t liable to completely offset inflation caused by the decreasing dollar. Of course for the trucking industry, increase in market prices, often results in a decrease in market sales and a subsequent decrease in produce shipments.
With the new Liberal Government’s proposed National food policy, many are hoping to see a market less reliant on foreign imports over the coming years. In the meantime, The UN’s Food and Agriculture Organization has declared 2016 the International Year of the Pulses, and with Canada weighing in as one of the world’s largest producers of such pulses as lentils, chickpeas, beans and dry peas, food experts are suggesting an emphasis on homegrown proteins for families to receive ample and affordable nutrition this year.
Home Economists like Winnipeg’s Getty Stewart are also throwing in their two cents on how Canadians can get the most bang for their produce buck. Stewart puts forth a number of suggestions including relying on in season produce rather than spending the extra money on out of season favourites, experimenting with new recipes that incorporate each season’s most affordable produce, cutting down on less healthy commodities such as soda, candies and other snacks, and opting for canned and frozen produce to offset price increases on fresh fruits and veggies.
The health of the trucking industry is based on a large chain of interrelated factors and in the projections for the Canadian produce market, we can see how the disparaging elements of the economy and climate end up playing off each other to create this year’s unique circumstances. Stay tuned to this blog for further information on this year’s produce industry projections.