The Chief Agricultural Economist with Farm Credit Canada anticipates a rebound in food manufacturing sales as typical food purchasing patterns begin to return to normal post COVID-19.
The loss of the food service market due to the closure of restaurants to help contain the spread of COVID-19 has disrupted typical food distribution patterns and clouded the economic outlook for Canadian food processors.
J.P. Gervais, the Chief Agricultural Economist with Farm Credit Canada, says not knowing when food services are going to resume normal operations results in considerable uncertainty.
I do expect inflation that we’ve seen in the month of March to last at least at the level that we saw. We had red meat and food inflation up in the six to seven percent range on an annual basis. The short term is really harder to forecast than the long term.
I think in the long term, whether we are seeing food services open to full capacity relatively quickly or whether we see food services open to half capacity over the long term and any type of scenario in between, I do think that food manufacturing sales are going to rebound.
We may end up falling back a little bit in May, depending on the sector and so forth but I do expect it to resume at one point. It’s just the horizon at which we’re likely to see sales rebound. That’s the big unknown right now that we’re going to have to work with.
~ J.P. Gervais, Farm Credit Canada
Gervais acknowledges, when we emerge from the crisis, even if we resume some sort of normalcy when it comes to operations in food service, we don’t know whether we’re going to see some changes in consumer behavior. He says we’re seeing some changes now with more online purchasing, more cooking at home, more trying to find local products and so forth and all of that could have some lasting implications for food processors.
