Higher beef and pork prices make summer BBQs expensive
With Canadians eager to fire up the grill this BBQ season, many are discovering the price of some of the most popular meats has skyrocketed in recent months.
According to Statistics Canada, retail prices for grilling steaks and ground beef are up between 11 and 12 per cent in the past 12 months. That's more than six times the two per cent increase seen in Canada's overall inflation rate over the same period.
Pork prices have leapt even higher, up 16 per cent since April 2013. Hot dog prices have been a bit more stable, but are still up by more than five per cent since last April, StatsCan says.
The reason is simple supply and demand.
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Cattle herds are at record lows after several years of farmers killing more cows than normal in order to sell them to stay afloat. And pork prices are down because of a new virus that's decimating piglets. With a fatality rate near 100 per cent for very young animals, porcine epidemic diarrhea virus has wiped out about a tenth of North America's normal pig population — although it's worse in the U.S. where pig farms tend to be larger and therefore more cramped.
Higher pork prices are good news in the short term for Canada's hard hit $3-billion pork industry, but over the long term, a declining number of animals is bad news for long-term sustainability, Canadian Pork Council spokesperson Gary Stordy said in an interview.
"There's a decreasing supply of live animals and things could get worse," he said.
The pig virus has caused the wholesale price for pork to soar, even before it hits butcher stores. The price for pork chops in the U.S. recently hit $3.84 a pound, the highest price since 1998. And ground beef prices are even pricier, up to a 20-year high of $3.69 a pound, data compiled by Bloomberg shows.
"Retail prices for beef and pork cuts have steadily pushed into new record territory" said John Anderson, deputy economist with the American Farm Bureau. "Farmers and ranchers are raising smaller numbers of hogs and cattle. This is the key factor contributing to higher retail meat prices, a trend that is likely to continue through the summer and, at least for beef, into next year."
Higher prices further up the supply chain are trickling down. TSX-listed meat packing company Maple Leaf Foods said earlier this month it will be raising prices in order to keep up with higher costs due to the pig virus.
"We are reasonably confident that the entire market will react in similar ways … because the cost increases are an industry-wide issue," CEO Michael McCain told investors on a conference call when the company posted its latest earnings.
The pig virus is the latest calamity to befall an industry that has been dealing with higher prices for feed for the past three years. The short-term spike in retail prices is temporarily giving ranchers and pig farmers a little more cash to pay their bills for now, but even farmers don't like the trend.
Retail prices for beef and pork cuts have steadily pushed into new record territory.- John Anderson, economist
"I should be saying this is good," Stordy says, "but if the declining numbers is a trend that continues over the long term, it will jeopardize the entire industry."
There's no indication that there's not enough meat to keep up with demand during the busy summer BBQ season. But be ready to pay more for it because none of the factors pushing prices higher seem poised to disappear any time soon.
If higher pork and beef prices have you looking for alternatives, there's always chicken — the price for a kilogram of chicken has actually declined by 0.5 per cent from $7.16 to $7.11 in the past year, StatsCan data shows.