Low supply and high demand are driving beef prices up across Canada.
While the price of produce has climbed this winter, the price of beef is on the rise, and consumers are going to have to dig deeper for quite some time if they want to put a steak on the barbecue or a roast beef in their oven.
“Prices are up and supply is way down,” says Askew’s Uptown meat manager Karl Kreipe. “Customers can be expecting beef prices to stay high for the next six months at least.”
Part of the issue is beef has become a world commodity, much like oil and is sold on the markets to the highest bidders. Shipping technology has increased to the point where it is relatively easy to move large amounts of beef to consumers around the world. When there is demand, the product goes to those willing to pay premium prices.
Kreipe says drought conditions in many places in the U.S. caused massive reductions in cattle herds, as ranchers couldn’t afford to keep their animals fed.
This has caused a reduction in supply, and U.S. buyers are now coming to Canada to purchase and import Canadian beef products.
“Because the U.S. dollar is so good compared to the Canadian right now, a lot of beef is being picked up by the U.S. to satisfy their markets, which is leaving a shortage in ours,” says Kreipe. “Some of my really big suppliers are telling me, ‘Sorry, there’s just no beef around.’”
Cuts of beef that have traditionally been considered cheaper are also moving up in price, as in other places in the world, those so-called lesser cuts are more valuable.
“On the world market, some of those cheaper cuts can be worth just as much as the expensive ones, so that is driving prices of those cuts up across the board.”
Another issue with beef prices is the length of time it takes to produce beef.
A chicken can go from hatching to market in six weeks, a pig in six months. But it takes two-and-a-half years for a baby calf to be ready for slaughter.
“With the size of the herds so reduced, they just don’t’ bounce back very quickly. And fewer cows ready for market means less supply which means higher prices for what’s available,” says Kreipe.
Another place the prices are impacting is the local 4H beef club. Higher prices are making the program, which sees children raise a steer, show it and then sell it, increasingly more expensive.
Trudy Schweb, a 4H leader, says the young members used to be able to purchase a calf for 99 cents a pound. Now that cost has risen to $2.50 per pound.
“The cost of getting into a beef project is hindering kids,” she says. “That being said, the kids last year sold their steers at auction in July and we had a record-breaking sale, so the prices are higher on that side as well.”
The 4H club is also supported by a loan program with Community Futures, so it can help offset the initial costs of purchasing the young animal.
As a cattle-ranching family, Schweb also sees the higher prices as helping keep ranchers in business, especially after years of very low beef prices, which saw ranchers struggling to make a living.
“The industry has to be sustainable if it is to survive and if we are to keep new young people in the industry,” she says.
For the consumer looking to keep costs down, Kriepe advises people to buy only what they need. He also suggests another alternative.
“Add more chicken and pork into your menu. At least for now.”
Schweb says the 4H program is a good way for people to access high quality beef products at fair prices. She says some people are deterred by the requirement to buy the whole animal, but she suggests people get together and split the costs of purchasing a steer at auction and then dividing the meat.
“It’s an amazing way to stock your freezer at a decent price, help some hard-working kids out and know that you are getting meat from animals that have been raised with the best of everything.”
The annual 4H stock show is held each year in July.