Meat prices climb as Canadians fire up the summer BBQ season
Consumers are paying more, but restaurants and producers also struggle with higher costs
The summer barbecue season is quickly approaching and with COVID-19 restrictions easing across most of the country, there could be strong demand for burgers, steaks, chicken breasts and pork chops as Canadians gather again with friends and family.
The prices for meat proteins have been climbing since the start of the year, and there's no sign the upward pressure is going to lose its sizzle.
A combination of supply-chain disruptions, higher prices for the grain needed to feed livestock and increasing demand will impact not only consumers but some producers as well.
"We're expecting consumers to pay way more at the meat counter than before," said Sylvain Charlebois, the director of the Agri-Food and Analytics Lab at Dalhousie University in Halifax.
Charlebois said Canadians have already seen prices for chicken and pork go up by five per cent on average since the beginning of the year, and he expects beef prices to rise even higher this summer.
"The food inflation rate could actually exceed seven or eight per cent, in beef in particular."
Depending on who you talk to, the increases in wholesale prices for chicken, beef, pork and lamb have already climbed much higher than that.
"We've seen the biggest increases in rib eye, tenderloin, New York steak and sirloin, brisket as well," said Alexander Ross, the owner of Harry's Natural Meats in south Calgary, of the price fluctuations of the past year.
"Those are the main cuts that have gone up in price drastically, anywhere from 15 to 30 per cent."
Another hit for restaurants
Consumers will likely pay more regardless of whether they're shopping at the grocery store or ordering from a restaurant.
At Jane Bond BBQ in southeast Calgary, chef Jenny Burthwright was overcome with emotion while talking about the challenges her business has faced over the past year.
From intermittent openings and closings, recurring COVID-19 restrictions, an unstable customer base, staffing shortages and soaring prices for meat.
"Thirty to 45 per cent is what I've seen," she said of the increase in what she has had to pay her suppliers in the last year.
Burthwright said the price for beef brisket, one of her specialities, has gone from $8.50 per kilogram to $15 over the past year.
She said her profit margins are so tight that she hasn't been taking a salary. She said she had to also lay off a manager and increase prices.
Burthwright questioned how much longer she could continue to operate.
"Every day, I kind of come in and say what's the point? Why are we opening the doors, right?" she said, fighting back tears. "We're operating at a loss every day, and it's pretty hard."
Not all producers see benefits
As prices climb, you might expect profits to do so, but that's not necessarily the case for all producers.
Cattle producers have been affected by pandemic-related disruptions to the supply chain, particularly on account of staffing shortages and closures at processing plants.
A slowdown in processing has created a bottleneck at the farm and feedlot while domestic and international demand for Canadian beef has been strong.
As a result, cattle producers and feedlot operators were earning less while the tighter supply and steady demand drove up prices for processors and retailers, according to a market analyst with Canfax, a division of the Canadian Cattlemen's Association.
"There's just so much demand there, and we're not able to fill the pipeline as fast as we'd like to, just with sort of the bottleneck at the processing sector," said Brian Perillat.
Perillat said consumers will continue to see higher retail prices for beef.
Prices for slaughter cattle in Alberta have risen by nearly eight per cent this year to the end of April, according to Statistics Canada.
Hog prices are soaring, up 60 per cent during that same period, according to Statistics Canada.
Alberta Pork, an industry advocacy group, said while producers are making more money right now, they're playing catch-up from years of losses while at the same time dealing with increased costs, such as higher feed prices for grain.
Perillat of Canfax said grain prices have gone up partly because of weather concerns and drought in parts of the U.S. as well as strong demand from China, which has increased its imports of barley and corn from North America.
Alberta Pork's executive director, Darcy Fitzgerald, said the group is pushing for more price transparency within the industry to ensure producers get their fair share.
"Today, by far, the retailer gets the most amount of money, then the packer or the processor, and then the producer," Fitzgerald said.
He said farmers aren't asking consumers to pay more.
"What we're asking is that, could everybody in the system, share the money equally."
Chicken farmers get a raise
Alberta chicken producers, who work under a supply-managed system, have recently seen an increase in the amount of money they receive for every kilogram of chicken they produce.
Alberta Chicken Producers, an industry group, said the 10 cent per kilogram increase is to help cover the rising cost of feed, which has seen a "sharp upturn" since last fall.
Byron Ference is a third-generation chicken farmer who runs his family's operation in the Alberta foothills near Black Diamond, Alta.
They recently completed construction on a massive new barn that has enough room for 75,000 birds.
He said the increase will help cover his costs — which include financing the multi-million dollar barn — and bouncing back from a production cut that was ordered during the pandemic.
"We were thrilled," Ference said of the increase.
"We were definitely feeling a little bit of the squeeze. Even before COVID came in, there were complaints of, you know, the prices not really representing what kind of costs and increases we were experiencing."
Those costs inevitably get passed on to the processor, the retailer and, ultimately, the consumer, he said.
Statistics Canada said chicken prices between January and April have risen nine per cent.
Feed prices, pandemic impacting prices
Charlebois said while many Canadians expect meat prices to rise during the summer barbecue season, this year is different.
While feed prices are rising, the biggest wild card has been the impact of COVID-19, which disrupted nearly 20 processing facilities across the country since the start of the pandemic.
On the retail side, he said, grocery stores have also faced added costs, including the expenses associated with stepped-up cleaning measures and other COVID-19 precautions, which have likely been passed onto customers.
He said while 92 per cent of Canadians still buy meat, consumers can always look for other sources of protein.
"We are expecting plant-based products to be much cheaper in a few months from now," he said.
"If you're looking for a protein source, you may consider mixing things up a little bit."
Bryan Labby is an enterprise reporter with CBC Calgary. If you have a good story idea or tip, you can reach him at email@example.com or on Twitter at @CBCBryan.