Consumers need to understand cost increases facing farmers.Ottawa—Consumers struggling with higher food costs need to understand growing that food has become a lot more costly for farmers, says the Canadian Federation of Agriculture (CFA).Costs have risen for farmers during the last few years with sharp increases in 2021 and 2022 such as a 47.4 per cent hike in the cost of diesel fuel from January to May 2022, CFA said. Fertilizer prices have increased by 148 per cent from 2021 to 2022. For the average farm of 778 acres, that represents an increased cost of $56,000.“These inputs are absolutely necessary for a farmer to grow their crops or feed their animals. Farmers have no lower-cost alternatives to turn to.”Consumers frustrated by higher grocery bills should “to try and understand how inflation and rising costs are affecting farmers, the food supply chain and ultimately the consumer.”For most of its history, Canada has ranked among the few countries where consumers spent less than 10 per cent of their income on food, CFA said. “However, maintaining this affordability has and will likely continue to become more difficult for Canadians. While the median income in Canada grew by 6.6 per cent between 2015 and 2019, the national average food expenditure (including both food retail and food service) increased by 16.3 per cent, with food retail on its own increasing by 19 per cent.“This means that Canadians are having to allocate a higher proportion of their income for food. This trend has been exacerbated by COVID. Food inflation is outpacing most other commodities.”CFA, in its own calculations for Food Freedom Day, showed how Canadians of different income levels are being impacted by rising food prices. The results found that lower-income Canadians are affected far more heavily by these changes than higher-income Canadians.“While inflation is a burden on every Canadian, farmers are always committed to providing safe, affordable and nutritious food the Canada and the world needs, and do their best to accomplish that as efficiently as possible.“While the costs of food production have increased, there has been a simultaneous increase in many commodity prices, the price at which farmers can sell their raw product. With harvest in Canada and other major production areas still to come for many products, it is yet to be seen if those increases will balance out the increased costs, but our members across Canada have raised concerns to CFA that many farmers and ranchers will face losses if things continue on with their current trends.”However, these increased costs to farmers are not why consumers are seeing increased prices on the retail shelves in most cases, due to the fact that the vast majority of farmers are price-takers.“While some can control when they sell, whenever they go to sell at market, they are given whatever price the market will pay for them. That means when costs go up, farmers don't have the option to simply sell their products at a higher price to offset those increases like many other businesses do.”A few agriculture sectors, including dairy, poultry and eggs, operate under Canada's supply management system, which matches production levels to the level of demand. This unique system also allows farmers to work together to ensure the price they receive covers their cost of production, providing a means through which farmers can influence the price of the products they sell based on the rising costs they experience.