Beef prices expected to keep falling, slowly: Cattle prices have already dropped by 30% after record levelsFriday, August 12, 2016 > 09:00:24
The sky-high grocery store price tags on cuts of beef are starting to drop and should keep falling over the next few years, according to industry analysts.
The beef industry experienced record high prices over the last few years, but the lucrative period is coming to an end.
Cattle prices have fallen by about 30 per cent in the last year and retail prices are falling, although at a much slower rate, according to Canfax, a Canadian beef statistics firm.
'Consumers vote with their dollars every time in the grocery store'
- Randy Blach, Cattlefax
"They went up so high, so fast. They could come down fairly substantially, but we may not see it for a few years," said Brian Perillat with Canfax. "They've just started to come down in the last four to six months. It always is slower coming down."
Grocery stores are again starting to feature discounts on beef, which customers rarely saw in the last few years during the price spike.
The average retail price for one kilogram of round steak was $19.09 in June 2015 and fell to $18.31 in June 2016, according to Statistics Canada. One kilogram of regular ground beef dropped from $12.75 to $12.29 during the same timeframe.
"Last year, I went and bought a crock pot and the roast that went in it was as much as the utensil," said Saskatchewan beef producer Bruce Holmquist, recalling his own sticker shock at the grocery store. "Everything has to be adjusted accordingly and I hope the retailers, although they do control it and they make the decisions, keep that in mind because we don't need a further reduction in beef consumption."
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Industry analysts shared the latest market figures to hundreds of farmers at the Canadian Beef Industry Conference in Calgary on Thursday.
Ranchers experienced a major correction in prices in recent months. Another concern is how the beef industry continues to lose market share compared to poultry and pork.
Poultry remains the top selling meat in Canada and the United States, followed by beef and pork.
In the U.S. poultry and pork are both experiencing record production with further growth expected this year, according to U.S. statistics firm Cattlefax.
While beef prices are falling, they still are comparatively higher than other meats.
"Consumers vote with their dollars every time in the grocery store," said Randy Blach with Cattlefax. "The demand has peaked. Prices are starting to work lower, but we're not falling out of bed. High quality meat was still at record high levels this spring."