14 July 2008

Price rises and eating local

This report perplexes me: CanGro's shock waves.

The doors of the country's last fruit canning plant [in St. Davids, Ontario] closed yesterday with a soft thud that echoes beyond Niagara. It was a pragmatic decision on the part of CanGro, owned by American private equity firms Sun Capital and EG Capital Group.

Quite simply, the products can be made cheaper elsewhere.

Many union reps, growers, economists and even consumers reluctantly acknowledge the canned products put out by the plant, Del Monte fruit cocktails and the like, were approaching their best-before date. Consumption of canned goods is near stagnant (about 2 per cent growth a year), fruit production costs (particularly labour) are escalating, and the plant, while it made money, was not considered efficient in global terms.

This closure strikes me as premature and short-sighted. The past half a year has seen fuel prices rise to new levels. As fuel prices rise, so, for obvious reasons, do those of products transported from long distances. Over the past two decades or more, we North Americans have become accustomed to finding reasonably-priced fresh fruit and vegetables in our supermarket's produce bins all year round. During the winter months we are privileged to eat peaches and nectarines imported from Chile and South Africa, whereas in my childhood and youth, these were available only certain times of the year. The rest of the time we were compelled to eat them canned or frozen.

Given the lower fuel costs of the 1980s and '90s, it is not surprising that demand for canned goods fell. Who would not prefer fresh over canned produce? Yet it may be that this period represented a spell of exceptionally fair economic weather that could not last. As fuel costs raise the prices of everything else, the selling of canned fruits may soon become more profitable than it has been in decades. Eating locally, which is being touted by many, may well become necessary for virtually everyone with limited means. If Niagara orchards have been uprooted and if all the fruit-canning plants have been closed, this could mean that even canned fruit will be scarce, thus driving up its price for all of us.

Couldn't the owners of the St. Davids plant have held out a little longer? They might have been able to turn a tidy profit while maintaining 150 jobs.

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