Beef prices are likely to remain high until mid to late 2025, possibly even longer. Droughts in North America have forced many cattle producers to reduce their herds, resulting in tighter supplies.
Higher food costs, elevated interest rates—crucial for the capital-intensive cattle industry—and downsizing herds have collectively pushed prices to record levels. As many producers exit the industry, the reduction in supply exacerbates the situation. For cattle producers, these high prices are welcome, but for consumers, the story is quite different.
Beef Prices Have Been a Major Driver of Food Inflation
Beef has been a significant contributor to food inflation in recent months, outpacing general inflation. According to Statistics Canada, the price of beef stewing cuts has increased by 19% in the last year, while beef rib cuts surged by 26%.
Even ground beef, often considered the most affordable beef option, has seen a 15% price hike over the past year. These increases build upon multiple price hikes in recent years. With current trends, farmgate beef prices could continue climbing until mid-2025, further prolonging upward pressure on retail prices.
Unless you have a direct connection with a rancher or find exceptional deals, consumers should brace for significantly higher beef prices. Within the broader meat category, beef isn’t the only protein facing price challenges—pork and chicken prices are also on the rise. The hog market has experienced similar pressures, which could lead to more expensive pork chops, ham, and bacon.
The Situation in the U.S. Mirrors Canada’s Beef Price Increases
The situation is no different in the United States, where a pound of ground beef is now at $5.67, a record high and a 43% increase since January 2021.
Beef, long considered a luxury protein, is now reaching price points that could severely dampen demand for an extended period. While overall meat sales fell 3% in the latest quarter, American consumers are still purchasing beef—albeit at a much steeper cost.
Canada’s Cattle Herd Reaches Historic Lows
We’ve seen this scenario play out before. In 2015, beef prices at retail surged nearly 30% within a few weeks due to drought-induced cattle sell-offs. Consumers retreated from beef, and sales never fully recovered. The current situation could be even worse.
As of July 1, 2024, Canada’s cattle herd was the smallest since 1987, despite the country having 15 million more people. The U.S. is also facing a similar decline, with the smallest cattle inventory since 1951.
At some point, cattle producers may attempt to rebuild their herds to capitalize on high prices, but this won’t happen overnight. Economic uncertainty, fluctuating interest rates, and the upcoming U.S. election may delay any significant industry expansion. For now, beef prices remain high in 2025, and consumers should expect continued inflationary pressure.
Looking Ahead: High Beef Prices Could Last Until 2026
Looking ahead, consumers should prepare for elevated beef prices through 2025 and possibly into 2026. Whether it’s BBQ season or not, the beef industry will face significant challenges in maintaining consumer interest at these price points. The price surge in 2015 led to the closure of many butcher shops as consumers sought more affordable protein alternatives.
As history has shown, when prices spook consumers, new habits form. This shift could have long-lasting effects on sectors like beef, which are key to North America’s agricultural economy. Keeping consumers engaged in the face of these high prices will be a critical challenge for the beef industry in the coming years.
More from Sylvain Charlebois:
Billions of liters of milk wasted in Canada since 2012 [Op-Ed]
Halloween candy shrinkflation: Canadians paying more for less [Op-Ed]
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Rising food prices are reshaping Canadian Thanksgiving traditions [Op-Ed]
I am an experienced and passionate butcher with over 10 years of experience in the butchery industry. My commitment to quality, food safety, and customer satisfaction is at the core of my work. I have a strong background in butchery, an in-depth knowledge of various meat cuts, and I can provide high-quality meat products while adhering to Australian sanitary standards and regulations.