As Canadians start the summer barbecue season, meat prices are rising
The summer barbecue season is approaching, and as restrictions on COVID-19 are relaxed in most parts of the country, and as Canadians gather with friends and family again, demand for burgers, steaks, chicken breasts and pork chops may be strong.
Since the beginning of this year, the price of meat protein has been climbing, and there is no sign that the upward pressure will weaken.
The combined effect of supply chain disruptions, rising prices of grains for livestock, and increased demand will affect not only consumers, but also some producers.
Sylvain Charlebois, director of the Agricultural Food and Analytical Laboratory at Dalhousie University Halifax, said: “We want consumers to pay more at the meat counter than before.”
Charlebois said that since the beginning of this year, Canadians’ chicken and pork prices have risen by an average of 5%, and he expects beef prices to rise again this summer.
“Food inflation may actually exceed 7% or 8%, especially beef.”
Depending on who you talk to, wholesale prices of chicken, beef, pork, and lamb have risen far above this level.
“We have seen ribeye, tenderloin, New York steak and sirloin, and brisket have the biggest gains,” said Alexander Rose, owner of Harry’s Natural Meats in southern Calgary, of the price fluctuations over the past year.
“These are the main declines in the sharp price increase, ranging from 15% to 30%.”
Another hit for the restaurant
Whether shopping in a grocery store or ordering from a restaurant, consumers may pay more.
At the Jane Bond BBQ restaurant in southeast Calgary, chef Jenny Burthwright was emotional when she talked about the challenges her business has faced in the past year.
From intermittent store openings and closings, recurring COVID-19 restrictions, an unstable customer base, staff shortages and soaring meat prices.
“30% to 45% is what I see,” she said of the increase in the fees she had to pay to suppliers last year.
Burthwright said the price of one of her specialties, sirloin, has risen from US$8.50 per kilogram to US$15 in the past year.
She said her profit margin was so low that she did not receive a salary. She said she also had to fire a manager and raise the price.
Burswright questioned how long she could continue to operate.
“Every day, I would come in and say what’s the point? Why do we open the door, right?” She said, holding back tears. “We are losing money every day. It’s very difficult.”
Not all producers see the benefits
As prices rise, you may expect profits to rise, but this is not the case for all producers.
Cattle producers have been affected by supply chain disruptions related to the pandemic, especially due to staff shortages and closures of processing plants.
Slow processing has created bottlenecks on farms and feedlots, and domestic and international demand for Canadian beef has been strong.
According to a market analyst at Canfax, a subsidiary of the Canadian Cattle Association, as a result, the income of cattle producers and farm operators has decreased, while tighter supplies and stable demand have pushed up prices for processors and retailers.
“The demand there is so great that we cannot fill up the pipeline as quickly as we hoped, just because there is some kind of bottleneck in the processing department,” said Brian Perillat.
Perillat said that consumers will continue to see beef retail prices increase.
According to Statistics Canada, as of the end of April this year, the price of slaughtered cattle in Alberta has risen by nearly 8%.
According to Statistics Canada, the price of live pigs has soared, rising by 60% over the same period.
Industry advocacy organization Alberta Pork said that although producers are now making more money, they are catching up from years of losses while coping with increased costs, such as rising grain feed prices.
Canfax’s Perillat said that the increase in grain prices is partly due to weather problems and droughts in parts of the United States and strong demand from China, which has increased imports of barley and corn from North America.
Darcy Fitzgerald, executive director of Alberta Pork, said that the organization is promoting greater price transparency in the industry to ensure that producers get a fair share.
“Today, so far, retailers get the most money, then packers or processors, then manufacturers,” Fitzgerald said.
He said that farmers did not ask consumers to pay more.
“What we want to ask is that everyone in the system can share this money equally.”
Chicken farmers get a raise
Alberta chicken producers working under the supply management system recently discovered that their income per kilogram of chicken produced has increased.
Industry group Alberta Chicken Producers said the 10 cents per kilogram increase was to help make up for the increase in feed costs, which have been “rapidly rising” since last fall.
Byron Ference is a third-generation chicken farmer who runs his family business in the foothills of Alberta near Black Diamond, Alta.
They recently completed the construction of a huge new barn with enough space for 75,000 birds.
He said this increase will help cover his costs — including financing a multi-million dollar barn — and recover from production cuts ordered during the pandemic.
“We are very excited,” Ference said of growth.
“We did feel a little bit of pressure. Even before the COVID, there were complaints. You know, prices don’t really represent what kind of cost and growth we are experiencing.”
He said that these costs will inevitably be passed on to processors, retailers, and ultimately to consumers.
Statistics Canada stated that chicken prices rose 9% between January and April.
Feed prices, pandemic affects prices
Charlebois said that while many Canadians expect meat prices to increase during the summer barbecue season, this year is different.
Although feed prices are rising, the biggest uncertainty is the impact of COVID-19, which has disrupted nearly 20 processing facilities across the country since the beginning of the pandemic.
He said that in retail, grocery stores are also facing additional costs, including costs associated with enhanced cleaning measures and other COVID-19 prevention measures, which may have been passed on to customers.
He said that although 92% of Canadians still buy meat, consumers can always look for other sources of protein.
“We expect plant-based products to be much cheaper in a few months,” he said.
“If you are looking for a source of protein, you can consider mixing it up a bit.”
Bryan Labby is a corporate reporter for CBC Calgary. If you have good story ideas or tips, you can contact him at [email protected] or @CBCBryan on Twitter.