Food prices are expected to continue rising in 2024, but at a slower pace, according to the latest food price report.

The fourteenth annual report issued by Dalhousie University, the University of British Columbia, the University of Guelph, and the University of Saskatchewan predicted that food prices will increase by between 2.5 percent and 4.5 percent next year as inflation continues to moderate.

However, grocery stores will face fierce competition next year as they try to regain the loyalty of customers who have been shopping more to save money, said project lead and director of the Dalhousie Agricultural Food Analytics Lab, Sylvain Charlebois.

He said, "I think loyalty will be for a massive battleground."

He added that this competition may lead to a slight contraction in the prices of some basic food items, even as overall food prices continue to rise. How do you get people coming back? (With) discounts and rebates. This leads to price wars.

Some categories are expected to see faster price increases than others in 2024.

The report said bakery, meat, and vegetable prices are expected to see a significant increase of between five and seven percent. Restaurant and seafood prices will rise by between three and five percent, while dairy and fruit prices will increase between one and three percent.

But despite the continued rise in food prices this year, researchers in the report found that in 2023, customers actually spent fewer dollars than the previous year's report had predicted, cutting back on spending in restaurants and grocery stores.

It points to how big a challenge 2023 was for many people,” as interest rates rose very quickly and did not give households time to adjust.

The report predicted that the same four-person household will spend about $700 more on food in 2024 than it did this year, estimated at $16,297.20.

In 2024, the massive food inflation that persisted over the past few years will finally end, as Charlebois predicted, and return to a more normal level as general inflation does the same.

The Bank of Canada stopped raising interest rates in the last months of the year as its policy continues to work its way through the economy. Inflation has not yet reached the central bank’s target rate, reaching 3.1 percent in October, but it is far from its peak of 8.1 percent in June 2022. Meanwhile, the inflation rate in grocery stores reached 5.4 percent in October, lower than 5.4 percent in September but still high compared to the overall inflation rate.

The report expects climate change to continue affecting prices of some food items in 2024, especially with the increasing frequency and severity of climate-related events.

Currently, climate events are affecting the prices of three food products in particular, which Charlebois said are likely to keep increasing in the coming months.

First, beef prices are rising, as drought in the Midwest and prairies has led farmers to cull their herds, according to Charlebois.

At the same time, the price of cocoa has risen due to conditions in Ghana and Ivory Coast, while sugar prices have increased due to weather affecting sugarcane production in some countries, Charlebois said.

"If you like dark chocolate, I’d buy it now.