News Releases

• Canadians spend an average of 10 per cent of disposable income on food
• The agriculture sector poised to strengthen, over the next two years, aided by favourable prices.
• Consumers are likely to face somewhat higher food costs later this year in light of recent increases in commodity prices.

TORONTO, February 12, 2011 – BMO Bank of Montreal today recognizes an important milestone for Canadian consumers – Food Freedom Day 2011. According to the Canadian Federation of Agriculture, this is the calendar date by which the average Canadian will have earned enough money to pay for groceries for the entire year.

Canadians spend an average of just over $7,000 on food annually, which is approximately 10 per cent of household expenditures. That compares to $5,700 (11.4 per cent of household expenditures) in 1997.

By comparison, according to the United Nations Food and Agriculture Organization, food consumption accounts for 45 per cent of household expenses in Indonesia, 39 per cent in China, and over 13 per cent in the United States. In Egypt, food inflation has risen above 20%, with the price of common food items such as tomatoes surging as much as 300% last year. The price for a kilogram of meat has risen to as much as one third of a monthly wage.

Looking to the year ahead, BMO Economics expects a moderate increase in food prices for Canadians. “The agriculture sector should experience solid growth over the next two years,” said Kenrick Jordan, Senior Economist, BMO Capital Markets. “The prices of grains and oilseeds, which have soared lately, should remain fairly strong over the medium term as a result of low inventories, healthy demand from developing countries, and continuing expansion of the global biofuels industry. This should be a constructive environment for crop production.”

Meanwhile, demand for meat is also expected to grow at a brisk rate. As incomes increase, populations in developing countries are enriching and broadening their diets. This should be a positive development for the livestock sub-sector.

“Canadian consumers continue to benefit from a strong and stable agriculture system with reliable food sources and unparalleled safety. While there will be some increase in food prices, we shouldn't see the kinds of supply issues some other countries are having to address,” said David Rinneard, National Manager of Agriculture, BMO Bank of Montreal. “The issues being experienced in other parts of the world lend credence to the importance of supporting a strong and vibrant Canadian agricultural sector” added Rinneard.

BMO's roots in the Canadian agricultural sector date back to 1817, when it first began working with farmers. BMO Bank of Montreal provides customized loan and deposit solutions to Canada's agri-business owners, the single largest core commercial sector that the bank serves.

Fast Facts About Canada's Agriculture Industry:

• Canada is the world's fourth largest agriculture exporter and 6th largest importer, accounting for a combined $65 billion in global trade
• The agriculture and agri-food sector plays an important role in the Canadian economy, employing one in eight jobs directly and accounting for 8.1 per cent of total GDP, according to Agriculture and Agri-Food Canada.
• Local farmers' markets are responsible for over $1 billion in sales and have a total economic affect of over $3 billion  

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For news media inquiries, please contact:

Paul Cunliffe, Toronto, paul.cunliffe@bmo.com, (416) 867-3996
Ronald Monet, Montreal, ronald.monet@bmo.com, (514) 877-1873
Laurie Grant, Vancouver, laurie.grant@bmo.com, (604) 665-7596