Ask John Wildenborg if he thinks Canadians will be paying more for steak during future barbecue seasons, and the owner of Calgary specialty butcher shop Master Meats doesnB次元官网网址檛 hesitate.
B次元官网网址淧rices are definitely going to go higher, no ifs, ands or buts about it,B次元官网网址� he said.
B次元官网网址淚t keeps me up at night, actually, thinking about coming into the summer and where prices are going to be. ItB次元官网网址檚 not a good situation.B次元官网网址�
Beef B次元官网网址� whether in the form of a juicy burger or a classic tenderloin steak B次元官网网址� is a mainstay of many CanadiansB次元官网网址� diets. Its popularity is the reason why consumer demand for beef has historically remained strong, even through periods of economic downturn when Canadians have less money in their wallets.
But the business of beef is changing, in large part due to consecutive years of severe drought across North AmericaB次元官网网址檚 main cattle-producing regions. From parched southern Alberta to water-scarce east Texas, ranchers have been due to a lack of grass for grazing. The resulting shortfall in cattle supply is reducing overall beef production and helping to push retail beef prices higher.
B次元官网网址淎 10-ounce New Yorker right now B次元官网网址� would cost around $20. Three years ago that was maybe a $15 steak,B次元官网网址� Wildenborg said.
B次元官网网址淎nd this is usually the slow time of year for beef, but wholesale prices havenB次元官网网址檛 dropped off at all since Christmas. IB次元官网网址檓 paying 40 per cent higher than I was last year at this time.B次元官网网址�
Food in general, as consumers know, has increased in price over the last three years due to the COVID-19 pandemic and an overall rising cost of living. But while inflation is starting to moderate in a number of food categories, the drought factor means beef prices are not.
B次元官网网址淲hen you talk to producers, whether itB次元官网网址檚 in the Canadian provinces or key cattle-producing regions of the United States, many producers will tell youtheyB次元官网网址檝e had to experience two B次元官网网址榟undred-year droughtsB次元官网网址� back-to-back over the course of 10 years,B次元官网网址� said Lance Zimmerman, a Kansas-based senior beef analyst with Rabobank.
B次元官网网址淎dd to that a global pandemic and all the challenges that go along with that, and weB次元官网网址檝e had a 10- to 15-year period thatB次元官网网址檚 been particularly challenging for a lot of cattle producers. It has led to a lot of liquidation.B次元官网网址�
Liquidation is when a rancher makes the decision to sell off a greater proportion of heifers and cows for slaughter rather than retaining them to grow his or her herd. Ranchers may decide to do this because of a variety of factors, including high input costs, limited labour availability and high interest rates, as well as the challenges associated with long-term drought.
In Canada, the size of the national cattle herd has been declining for years, a trend that continued last year amid a punishing drought in Western Canada. This countryB次元官网网址檚 beef cow inventory fell in 2023 by 1.5 per cent to 3.66 million animals B次元官网网址� the lowest level since 1989.
South of the border, U.S. Department of Agriculture figures show an even more dramatic story. There, the national cattle herd has been contracting for five years, reaching 28.2 million animals in 2023. ThatB次元官网网址檚 the smallest number of cattle the U.S. has seen since 1961.
Fewer cattle means less beef production, which translates to fewer exports as well as higher prices at the retail counter.
B次元官网网址淯nfortunately for the consumer, those prices are going to ratchet higher,B次元官网网址� said Zimmerman.
B次元官网网址淥n a U.S. basis, retail beef prices are currently about US$8 a pound, and by our estimation, over the next several years we can expect another dollar-and-a-half increase, quite easily.B次元官网网址�
In southeast Alberta, near the tiny community of Jenner, rancher Brad Osadczuk shipped some of his cattle east to Saskatchewan last summer to graze on rented pastureland. It was the only way he could feed them because his own grassland was entirely depleted by drought.
B次元官网网址淭his past year was the worst year for drought in adult life and I was born in 1971,B次元官网网址� Osadczuk said. B次元官网网址淥ur native prairie just never turned green.B次元官网网址�
While Osadczuk was able to avoid reducing his herd size, he said many ranchers in his area have been choosing not to replace cows after they sell them for at least the past five years.
B次元官网网址淲eB次元官网网址檝e been mitigating drought for a long time,B次元官网网址� he said.
B次元官网网址淪o weB次元官网网址檙e kind of at a point in this part of Alberta where our herds are pretty small already.B次元官网网址�
Even if the current drought cycle were to end this year, cattle numbers canB次元官网网址檛 rebound overnight. ThatB次元官网网址檚 why experts say the new era of higher beef prices is here to stay, at least for a while.
B次元官网网址淭his isnB次元官网网址檛 a short-term thing,B次元官网网址� Osadczuk said.
B次元官网网址淔or a female calf that is born today, itB次元官网网址檚 four years before that female can have its own calf that can end up in the food chain.B次元官网网址�
Anne Wasko, a Saskatchewan-based market analyst with Gateway Livestock, said North American cattle and beef supplies will remain tight for several years, and much is riding on Mother Nature.
B次元官网网址淲eB次元官网网址檙e going to be looking at smaller supplies in B次元官网网址�24, B次元官网网址�25 and possibly out as far as B次元官网网址�26,B次元官网网址� she said.
B次元官网网址淲e truly need moisture, first and foremost, to turn this boat around.B次元官网网址�
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Amanda Stephenson, The Canadian Press
