To understand why food costs are increasing, it is important to separate the inflation caused by money printing by banks and governments from the real cost increases occurring in the real economy.

Real cost increases in energy production (see “Why Gas Prices are High) make everything more expensive as energy is the prime resource. Food production is quite energy intensive and therefore very sensitive to energy costs. Also, nitrogen chemical fertilizer is largely an energy transformation process while the natural mined potash is a slowly depleting resource. On top of that, Russian supplies of potash may be reduced given the long war on-going in Ukraine.

Money printing by banks and governments has generated a great deal of inflation but looking beyond that, real cost increases have driven up many prices. Monetary policy will not affect the real cost increases driving a substantial portion of what we term “inflation”.

Energy cost increases cause all prices to rise as energy is the primary resource. Energy is an increasingly more expensive commodity however as we deplete the richest resources and move on to less dense and smaller sources.

At this point in the early 2020s, Canada’s population has reached over 38 million people. Demographic models in the late 1900s forecast that with balanced immigration Canada’s population would stabilize near 28 million sometime between 2020 and 2030. The increase of 10 million has been driven by the highest immigration levels in the world and represents a milestone of imposed population growth.