Processed Food: You Pay for the Processing
Here's something to chew on over your morning bowl of cereal: Only 2 per cent of the price you paid for that product represents the cost of the grain.Get a load of this chart:
The rest goes to pay for things like shipping, processing, packaging and advertising, along with heating and lighting the store where the final product is sold, according to a report by Statistics Canada.
That's one of the reasons food price inflation remains relatively low in Canada, at 1.2 per cent in the 12 months up to the end of April, even as the price of grain soars on world markets, the study concludes.
The more processed the product, the less the actual cost of the food is reflected in its final price on the store shelves.
It's not the only reason Canada has the second-lowest food price inflation in the world, after Japan, said the study, called "Food Prices: A boon for producers, a buffer for consumers."
Americans also consume a lot of processed food, where the price of the grain represents a small share of the final product cost. Yet, food price inflation south of the border is up 5.9 per cent in the past 12 months.
Here’s a great cost-saving move. Leave the food alone! No one needs multi-colored breakfast cereal.
