These foods will be hit hardest by inflation in 2025, according to AI modelling

The new year won’t bring a resolution to rising food costs, according to a new report that predicts prices will rise as much as five per cent in 2025.

Canada’s Food Price Report 2025, published Thursday, says food prices will continue to outpace Canada’s target inflation rate of two per cent.

In total, food costs will rise somewhere between three and five per cent, predicts the report. Meat could be hit especially hard by inflation and cost somewhere between four and six per cent more by the end of next year.

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The report is a joint effort between four Canadian universities, with authors from Dalhousie University, the University of Guelph, the University of Saskatchewan and the University of British Columbia.

This year, the team says a family of four can expect spend approximately $16,833.67, an increase of more than $800 from last year.

Source: Canada's Food Price Report 2025

A ‘tangled web’ of factors

The report cites a wide range of factors that might affect food prices, including climate change, geopolitics, energy costs and consumer indebtedness.

Sylvain Charlebois, lead author of the report and professor at Dalhousie University, says beyond even those, other events can impact the prices you see at the grocery store.

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“Every year we try to look at factors that can push prices higher, and of course climate change is always one wild card,” Charlebois said. “The other wild card for next year is the return of Donald Trump to the White House.”

“With the support of Congress, the Supreme Court and everything else, we certainly are very concerned about tariffs.”

Other unexpected occurrences can also throw off the model. For example, Charlebois says Russia’s recent decision to reduce wheat exports, for example, could have significant impacts on prices in the future.

“They're the largest exporter of wheat in the world, and wheat represents about 20 per cent of all calories consumed on earth.”

The Ukraine war in 2022 was something that caused Charlebois’ team to miss on their prediction that year — but overall, their reports have been generally accurate, with inflation falling within their predicted bounds six of the past seven years.

Using AI to predict prices

Beyond just the obvious, researchers are trying to analyze every factor that comes together to cause the price of food to increase.

“You can't point to one variable and be like this is why this is expensive right now,” Kristina Kupferschmidt, who worked on the report as a PhD student at the University of Guelph and Vector Institute, told CTV News. “It's this whole tangled web.”

Kupferschmidt, currently an assistant professor at University of Prince Edward Island, works with food experts to identify what factors are important in food production and pricing.

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“You can imagine each month we have a point for how expensive prices are,” she said. “But we can also take in other data that represents things that we know are important, things like drought measurements or how strong we expect the El Nino oscillation to be or the exchange rate in the U.S.”

The team has been using machine learning for years to predict future prices, but this year, the team introduced a new technology to help them consider even more factors.

Kupferschmidt says large language models (LLM), a type of artificial intelligence, allowed the team to process information beyond just raw data.

They were able to look at plain language text — feeding in full reports from previous years to their model, for example — to gain insight into what previously unexplored factors might cause food prices to increase.

“I think this report is actually this very neat instance of human experts and AI systems working together to make better forecasts,“ Kupferschmidt said. “I think LLMs can do a great job forecasting, but I think there's ultimately no replacement to having a human in the loop.”

She says the five per cent mark is hopefully at the high end of what Canadians can expect, but that the team errs on the side of over-predicting rather than leaving people caught off guard by even larger price increases.

“I think a lot of care goes into trying to kind of predict the upper bound of things, because at the end of the day, the purpose of the report is to allow people to kind of budget into the future.”