Beef, pork prices continue downward slide
Grocery store price tags haven't fallen as far as livestock prices
Beef and pork livestock prices are plunging to levels not seen in several years, and the price tags in grocery store meat departments are beginning to fall as well.
Cattle prices are at their lowest point in almost three years in Alberta, while the value of hogs is at a seven-year low.
"Lower prices for cattle does mean lower prices for consumers, but not quite a one-to-one relationship," said Rob Roach, with the research team at ATB financial, an Alberta bank.
"We've seen beef prices fall about 20 per cent at the producer level and only about five per cent at the consumer level in the stores. That's because there is processing, slaughtering, transportation and imports and exports all mixed in there as well."
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The size of the cow herd kept falling across North America at the same time that global demand was increasing. Meanwhile, the number of hogs decreased after a deadly virus wiped out more than eight million pigs in the United States. In Canada, most of the cases occurred in southern Ontario.
Do we wish we had those prices? Absolutely, it was marvellous.- John Buckley, Alberta rancher
"As a result, prices increased fairly dramatically that year for the producers right through to the meat case," said Kevin Grier, a Guelph, Ont.-based independent consultant. "Given how high prices were, Canadians really stepped up to the meat case. We could have eaten a lot less than we did."
Spurred by those high prices, beef and pork producers have tried to rebuild their herd size in North America and are finding success.
Beef prices at grocery stores across the country increased 13.6 per cent in 2014 and 15.1 per cent in 2015, before falling by 1.1 per cent in 2016, according to Statistics Canada's consumer price index. Similarly, pork prices jumped 12.7 per cent in 2014, 5.3 per cent in 2015, and fell 1.6 per cent in 2016.
Canadian farmers enjoyed a few lucrative years selling their livestock, but those profits are returning to normal levels once again.
Cattle prices in November in Alberta averaged about $127 per hundredweight, the standard measurement for pricing cattle. That's significantly lower than the record high of nearly $200 a few years ago.
"The prices were so high two years ago, in 2015, that it is really a marked adjustment for us," said John Buckley, a cattle rancher from Cochrane, Alta., about 35 kilometres west of Calgary. "Do we wish we had those prices? Absolutely, it was marvellous."
Buckley said his operation is still profitable and the drop in cattle prices was expected.
Chicken prices and production have remained relatively flat in recent years.