Beef prices continue to soar, but signs of coming relief are emerging

There may be some slight relief on the horizon for steak and hamburger lovers in Canada who have seen beef prices soar in recent years, experts and data suggest, with the possibility of supply finally catching up to demand.

The latest consumer price index report from Statistics Canada on Monday showed that the price of fresh and frozen beef rose nearly 14 per cent year over year in February — once again outpacing overall food inflation at 4.1 per cent.

However, the new numbers mark a drop from the 18.8 per cent increase reported in January compared with the year before.

“I think we’re starting to see some turnaround,” said Mike von Massow, a food economist at the University of Guelph.

“We sort of see seasonal variation in prices because of seasonal variation in demand,” he added, with more people grilling in the summer months, “but it appears that we’ve maybe reached the peak to a degree and maybe — not quickly, but over the next several years — we’ll start seeing better supply and lower prices.”

Last November, retail beef prices rose 27 per cent from the year before and were 41 per cent higher than the five-year average, according to the latest market report released last month by Canada Beef.

Those higher prices were a hangover from multiple years of drought in Western Canada in the early 2020s, which reduced pasture growth and feed stocks for cattle herds. The war in Ukraine and other supply disruptions also drove prices for feed, fertilizer and other production inputs higher.

That led producers to hold back on expanding their herds. As a result, the number of cattle across Canada fell last January to its lowest level since the 1980s, despite consumer demand reaching its highest point since that same decade.

Yet in another positive signal, cattle numbers saw their first increase since 2018 at the start of this year, Statistics Canada reported last month.

“That’s a good sign,” said Jamie Kerr, a market analyst at Canfax, a Calgary-based beef industry research organization.

“We have producers who are looking at current prices and saying, ‘I’m willing to expand right now.’ And it’s something that we’re seeing across Canada, every province or most of the provinces have seen an increase.”

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Part of the issue facing beef producers — and why beef prices have risen so much more than other kinds of meat like chicken and pork — is that it simply takes longer to raise cattle.

Cows don’t tend to have multiple births the way chickens and pigs do, and it takes a couple of years to raise and fatten calves up to the proper weight for slaughter. It takes even more time before those heifers are old enough to start producing calves of their own.

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While the gestation period for cattle is around nine months, pigs “can have three gestations in a year, and for chickens, you can have eight or nine,” said Ellen Goddard, an agricultural economist at the University of Alberta.

“If we were talking about elephants, it would be a 20-year cycle because the gestation period is even longer.”

Statistics Canada said Monday that fresh and frozen chicken prices rose eight per cent year over year last month, while pork rose 9.2 per cent. Both numbers were up from January.

Overall, the consumer price index for meat increased 8.2 per cent in February compared with the year before.

Also, unlike pigs and chickens, which are typically raised indoors, cattle are raised outdoors, making them more susceptible to weather shifts and disruptions.

Kerr said beef producers are opting to expand their herds now because weather forecasts have been promising heading into this year, with a better chance of rainfall that will feed and grow their pastures.

That can quickly change, however.

“Nothing is guaranteed, but currently it’s looking pretty good,” he said.

Kerr added that the federal government’s recent deal with China that includes reopening the Chinese market to Canadian beef exports may bring further stability to producers, allowing them to focus on expanding their herds, though he warned it could impact domestic supplies.

“More markets are always good,” he said. “Overall, we view that as a positive.”

2:14 Canadian beef exports return to China

Goddard said beef production has always been complicated, with producers needing to weigh multiple factors before deciding whether to expand their herds, keep them stable or even decrease their size.

The choice to expand may lead to short-term pain for consumers to allow for long-term gains in supply.

“When you start rebuilding your herd, there’s fewer animals going to slaughter,” Goddard said. “So it could get worse before it gets better.”

Experts said the prediction in the latest annual food price report from Dalhousie University’s Agri-Food Analytics Lab, which said beef prices may not start to come down until mid-2027, remains likely.

Demand will also remain high and keep pressure on producers, they add.

Although von Massow said beef consumers are getting older and consumers in general are diversifying with other proteins and plant-based meals, Canada Beef and Canfax have said the rise of GLP-1 weight-loss drugs has those consumers incorporating more beef into their diets.

Von Massow said beef also remains a cultural touchpoint for many Canadians.

“That Sunday night family roast beef dinner, the beef steak on a barbecue in the summer, those are sort of ingrained in North American culture,” he said.

“I think we’ll continue to see beef be in demand. I think will see sort of a rebound as price goes down, but some of those other pressures will continue to exist.”