The cost of meat products will jump about three per cent, compared to a rise of about five per cent in 2011, while the price of fresh vegetables will go up one to three per cent in 2012, versus a jump of 10 per cent this year.

    Also, baked goods prices are expected to rise three per cent, from seven per cent this year.

    Relief at the cash register will make 2012 a good year to tackle consumer debt, Charlebois added.

   “For a great number of years, Canadians were somewhat spoiled by relatively modest food inflation,” explained Douglas Porter, deputy chief economist at BMO capital markets, who generally agrees with the report.

    Over the past ten years, however, prices at the supermarket have risen faster than inflation, Porter said.

    A number of factors are responsible for the upswing in prices around the world, including the rising cost of fuel and raw materials, extreme weather patterns and economic uncertainty.

    On top of that, the number of meat eaters in emerging markets has risen as a middle class begins to surface. The additional grain needed to feed the animals puts more pressure on the agricultural system, Porter said.

    Competition between major retailers, such as Loblaws, Metro and Sobeys, will help control prices next year, according to the study. Price wars are expected to heat up, especially with the entrance of U.S. retailer Target.

    But it wasn’t a lack of competition that caused the prices to go up in 2011, said Michael Burt, associate director of industrial economic trends at the Conference Board of Canada. The price spike was more related to one-time supply shocks and the underlying agricultural prices, he said.

    "Obviously more competition is generally a good thing for consumers, but it’s not going to be the primary factor of a reduction in inflation,” Burt said.

    For people who tightened their budgets in 2011, next year will bring good news as the price of core grains and sugar are down, he said.