High beef prices to stay for years to come, says Guelph analyst
Drought, disease and high feed prices have reduced North American herds to a 50-year low
Whether you like it rare, medium or well done, chances are buying beef could leave you feeling raw for years to come.
According to data from Statistics Canada, the average retail price of regular ground beef has risen 41 per cent in the last three years. On average, for example, a pound of ground beef that was worth $4.02 in April 2012 had risen to $5.70 by April 2015.
"Beef is going to be high and it's going to stay high," Kevin Grier, a Guelph, Ont.-based independent consultant who analyses the price of livestock, meat and groceries, said in a phone interview.
'Very, very, very low beef supplies'
Grier says a combination of drought, high corn prices due to increased ethanol production and concerns over mad cow disease have reduced the total size of the North American cattle herd to its lowest level in the last half-century.
"We've got very, very low beef supplies in Canada and the United States, and so we have very high prices and we're going to have those prices throughout the summer, throughout 2015 and 2016 easily," he said. "So that's something we're going to get used to and realize is the norm."
Grier said these days, T-bones or prime rib fetch $8.99 or even $9.99 per pound on sale at grocery stores. Gone are the days when juicy cuts of beef graced the covers of supermarket fliers at rock-bottom prices.
"We used to see prices in the $4.99 range for a T-bone," he says. "Those days are long past."
Beef consumers will likely feel the price shock for quite a while, Grier adds. He says it will take farmers years to rebuild North American herd levels, which are at historic lows.
"I equate it to an ocean liner," Grier says. "The beef ocean liner takes a long time to turn around."
'Eat less and higher quality'
"No discounts or any special offers, no way," says Viktor Besenseschek as he and his wife Erika prepare for their weekly grocery run at a supermarket in Kitchener, Ont.'s Central Frederick neighbourhood.
"The steak, the cut that I take, it went from four or five dollars to about 12 dollars," he says. "I wish the prices would go back down to normal because the incomes didn't change to compensate."
The couple, both 74, haven't given up on beef. They still enjoy their favourite cut, but they don't eat as much.
"Eat less and higher quality," Viktor Besenseschek says. "It used to be a big plate, like, a 16-ouncer. Now, it's an eight-ouncer. It's the same cut, a one-inch cut. It's just smaller."
The king of meats
"It's viewed as the king of meats," David Banbury says, "I love my steaks."
He should. Banbury was raised on a beef farm and saved up $1,000 to buy his first cow when he was in high school. Now 37, the father of three still lives on a working beef farm outside the hamlet of St. Agatha, despite having a full-time job in the city as an engineer for BlackBerry.
"What is the quote?" he asks himself as the topic of beef prices come up. "'People will eat as much chicken as they can stand and as much beef as they can afford.'"
Considering the record-high price of beef, the quote is fitting. Banbury advertises his meat as a premium product, which might appeal to people like the Besensescheks who have bought into the "eat less, but eat high quality" ethos.
"High-quality, 100 per cent grass-fed beef, raised in an environmentally sustainable and friendly manner," according to a postcard-sized handbill he gives to his customers.
He sells in bulk, charging about $325 for a 30-pound beef package, which includes steaks, roasts, ground beef, stew beef hamburger patties or beef sausages.
That works out to just under $11 per pound for grass-fed beef and the price isn't scaring anyone away.
"There is such a high demand and such a limited supply," he says. "There are lots of people looking for it and typically it's hard to find."
The surge in beef prices has even startled Banbury, who says a steer that would have fetched $750 at an auction four years ago now costs $1,800.
With beef prices so high, even Banbury admits he has his doubts at times.
"There is a little worry in the back of your mind that at some point, prices will get too high and people will just stop eating beef," he says.