With the warmer weather starting to arrive, you may be looking forward to long, sunny afternoons spent hanging out in the backyard, enjoying a cold beverage or two, and flipping some burgers. The bad news is this classic summer activity now comes with a hefty price tag.
Driving the news: Beef prices are up 14% since this time last year and likely to stay high this summer, as new forecasts show North American beef production on track to fall again this year.
Over the past decade, beef prices have increased by 65%, more than double overall inflation.
Why it matters: For Canadians already burdened by high grocery prices, burgers are no longer the cheap and cheerful way to feed a crowd they once were, while steaks — even cheaper cuts — have turned into luxury splurges for special occasions.
Why it’s happening: Most of the run-up in beef prices happened in the past three years, triggered by a severe drought that made it more expensive for ranchers to feed their herds. They responded by thinning out their herds, which led to a supply crunch that we’re now experiencing in the form of higher prices.
Once a cattle herd is culled, it takes years to rebuild, and ranchers — still operating on thin margins because of higher land costs and expensive inputs (like feed and fuel) — may be hesitant to invest in expanding their herds and potentially driving prices down.
At the same time, demand for beef has held up, driven in part by consumers looking to up their protein intake. So long as demand is strong, there’s little reason for producers to lower prices.
Bottom line: If you want to barbecue on a budget, maybe consider hot dogs. It’ll likely be a couple of years before beef looks affordable again.—TS
