Pastrami panic the latest surge in global food prices

William Kaminski has a tough choice ahead of him.

The owner of Vancouver's PHAT deli built his reputation on smoked meat sandwiches. But while the price of his product hasn't changed in five years, the cost of the raw ingredients has jumped.

Pastrami prices have risen by as much as 12 per cent in the past six months alone. Kaminski says the cost has doubled since he opened his restaurant in 2004.

"It's hard to make ends meet right now," he says. "I have to make a decision now on what to do, because I can't absorb that cost — it's just massive."

Recipe for disaster

Beef, hazelnuts, almonds, chocolate, limes: it sounds like the ingredients for a nightmare birthday cake.

It would certainly be an expensive one, given the spiking cost of all these products, for reasons ranging from climate change to the influence of drug cartels.

University of Guelph Food Institute senior external director Paul Uys says consumers should pay attention.

"It's an out-of-sight, out-of-mind situation, I guess, until it's not available, and everybody's in a big furor about why they're paying through the nose for it," he says.

"I think that's one of the challenges we have in the market."

Nutella crisis

Remember the great Nutella crisis of 2014?

Frost devastated crops in Turkey, which supplies 70 per cent of the world's hazelnuts, and Italian confectionery powerhouse Ferrero scrambled to secure supplies for its hazelnut-based products: Nutella and Ferrero Rocher chocolates.

It was a bittersweet moment for lovers of the popular breakfast spread who worried the cost of Nutella might soar at the very moment they learned it actually contained something nutritious.

Fans of baklava endured similar hardship last year as the cost of pistachios, a key ingredient, soared due to low rainfall and pest infestation in southeast Turkey.

Pistachios have faced peril in the past: the cost of the nut soared in the late 1970s as a consequence of revolution in Iran, then the world's leading supplier.

Marzipan mayhem

California's drought has directly affected the Victoria bakery Michele Byrne and her family have owned since 1956. They buy California almonds to make marzipan.

"The price of the almonds has skyrocketed so bad that we said, 'We can't just eat this, we have to pass it on,'" Byrne says.

"We put the prices up six months ago, and if they keep going up, we're going to have to do it again."

Uys says globalization of the food market means bad weather or turbulent politics in one part of the world necessarily affects prices in another.

"The ripple effect is now felt in most quarters of the world. If there is a shortage in one area, it will be felt elsewhere," he says.

"Unless we do something, what we call our natural capital — whether it's sustainable seafood or coffee or tea or palm oil, or even how we manage our water supplies — are all crucial to how we're going to face a sustainable future."

Whim of the market

Pastrami and smoked meat are made from cured brisket; pastrami is rolled in a black peppercorn base before smoking, whereas smoked meat is rolled in cloves, sugar, paprika and black pepper.

Omnitsky's Kosher Delicatessen owner Efrem Rappaport produces both, and he says the rising cost of beef left him no choice but to increase prices.

"The price of grain has gone up, and the price to feed cattle has gone up. Cattle prices have gone up, so raw meat prices are up, and raw meat prices affect me as a producer," he says. 

"I don't take raising prices lightly, and I think about it long and hard before I go and make a move like that, but I have to do what I have to do to try and make a living."

Next up: fish

Before joining the food institute, Uys worked as a senior executive at Loblaws, heading the company's sustainable seafood initiative.

He says shortages have suppliers pumping commodities like ancient grains, which grow easily, can be adapted into a variety of products and are rich in protein. 

He fears a looming fish crisis could make pastrami's problems pale by comparison.

"There are a billion people daily around the world who rely on the seas as their source of protein," he says.

"And as that source of protein increasingly becomes denuded, it is raising some very big alarm bells."

Kaminski says he'll make a decision on sandwich prices soon. He thinks he won't be the only one rethinking the future.

"Any family today is going to have to [adjust] their lifestyle for price increases in all food, across the board. Vegetables, chicken, fish: there's only so much of it."