Widespread drought in the Canadian Prairies is driving up commodity prices, leaving restaurants to contend with a higher cost of doing business.
“Everything has gone up, especially produce and meat prices,” Thomas Siarkos said.
Siarkos, who has owned Memories Dining and Bar in Regina for 32 years, said the prices of the beef and produce he uses have recently soared by 12 per cent.
Alberta, Saskatchewan and Manitoba have all seen record heat levels and little rain this year. The Grain Growers of Canada is projecting historically low yields across the Prairies amid unprecedented drought conditions.
“When the drought is happening and when our farmers don’t have a good yield, it affects our business,” Siarkos said.
For now, the restaurant owner said he won’t be passing on the costs to his customers, who have been flooding into the establishment since COVID-19 restrictions were lifted in Saskatchewan.
But not all restaurants are able to absorb the increasing costs.
Famena Ally, who owns Famena’s Famous Roti and Curry in the heart of Winnipeg’s downtown, is trying to keep up with rising prices.
The price of meat and vegetables has almost doubled, and she’s had to pass on the cost to her customers.
“We’re not making much money. We’re working at losses right now, but at least we have enough to pay the bills until things change. I hope the drought will be over,” Ally said.
Sylvain Charlebois, director of the agri-food analytics lab at Dalhousie University in Halifax, said the full impact will be felt through the fall and winter as climate change affects commodity prices.
“Processors are paying more for their inputs due to droughts, which have been affecting major, major markets like Canada, the U.S., Russia,” he said. “The costs of wheat, canola, barley, corn, all these commodities are much more expensive than last year.”
While the impact of the drought is palpable in the hospitality industry, it will be felt across the entire Canadian economy.
“The agriculture sector is important. And if that sector isn’t doing well, it has all sorts of implications for transportation and activity in that area as well. And so it’s reflected, I think, in the overall state of the economy,” said Pedro Antunes, chief economist at the Conference Board of Canada.
Antunes said that lower production due to the drought in Saskatchewan, Manitoba and Alberta also has a negative impact on consumers’ confidence.
In Regina and Winnipeg, both Siarkos and Ally have hope.
“We prepare for the worst and hope for the best,” Ally said. “We just want to keep open.”