Sources: CGC, AAFC, FCC Economics
The largest benefits are expected for processors that rely heavily on hogs and cattle, as these inputs are forecast to see notable cost declines. This is positive news for meat processors that have faced high livestock prices in recent years. Grain and oilseed users are also likely to benefit, although gains may be more moderate compared to livestock-related inputs.
Canola, cattle, and milk remain the most important raw materials by value, each accounting for roughly seven percent of total raw material costs. While not all prices are expected to fall sharply, the overall raw materials price index is forecast to decline in 2026. This signals broader cost relief for processors across different food categories.
Additional optimism comes from slower price growth in other important inputs such as cocoa, sugar, and natural gas. These trends suggest that cost pressures may ease beyond agricultural commodities alone, supporting more stable operating conditions for food and beverage manufacturers.
Despite these positive signs, costs remain high when compared to levels seen five years ago. There is also ongoing risk that prices could rise again due to factors such as changing trade policies or global market disruptions. As a result, processors are encouraged to focus on strategic sourcing, efficiency improvements, and productivity gains.
Overall, while challenges remain, 2026 could mark a turning point for Canadian food and beverage processors as easing input costs provide much-needed breathing room after years of financial strain.
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