Predictions of a sharp increase in the price of beef is coming true in Ottawa.
The owner of Saslove's Meat Market said suppliers have been raising the price bit by bit since February, after warnings from economists and industry experts.
The ByWard Market business kept prices steady for months, said owner John Diener. But after a recent evaluation revealed the shop was barely breaking even and some weeks even losing money, Diener decided to raise beef prices more than ever before — 20 per cent for some cuts compared to last year.
"We're not the kind of business that lets our prices fluctuate week to week," Diener said.
"So if things go up a little bit one week we keep the prices the same, if they go down a few cents the next week, we leave things the same. It all kind of averages out. But once we got into late May, early June, we saw some major increases in price."
The price of ground beef went from $9.53 per kilogram in June 2013 to $11 per kilogram in June 2014, according to Statistics Canada. The price of sirloin steak went from $17.34 per kilogram in June 2013 to $19.86 per kilogram in June 2014, Statistics Canada said.
The average price of beef is 17 per cent higher than last year but some cuts have risen much more, such as brisket up 65 per cent from last year.
Economists, industry experts predicted hike
Diener has been expecting the increase in beef prices for a couple years.
"There were severe droughts in the U.S., a lot of people got out of raising cattle because of the problems that they faced because of the droughts," Diener said. "The market in North America is all intertwined so whatever happens in the U.S. affects Canada, whatever happens in Canada affects the U.S."
Saslove's has been in business in the ByWard Market for 60 years but the rising cost of beef coupled with higher utility costs is causing Diener to rethink his approach to business.
"We didn't realize how much it was costing us. You see a little increase every week and you don't do anything about it, but after a while, the effect becomes cumulative," he said. "It means being more analytical now. Doing everything we do in a more calculated way. It means you spend more time administrating."