From FCC Express, by Owen Roberts
A new report says backyard chefs across Canada may be burned by the high price of beef when spring arrives and they gamely fire up their barbecues.
The report, called “Your steak will get more expensive” by the Guelph-based George Morris Centre, warns consumers that beef prices are likely to stay that way.
Further, it predicts the kinds of grocery store sales of beef that normally accompany barbeque season will be rare.
“Over the past several years, beef prices at the consumer level have increased more than other consumer items,” says the report. “This is likely to continue to increase even more in 2014.”
The Canadian Cattlemen’s Association concurs.
“Beef lovers have been feeling the pinch with higher retail prices,” says Brenna Grant, manager of Canfax Research Services with the association.
She notes in the past two years, beef prices have risen dramatically, outpacing general food inflation for the first time in a decade. Basic supply and demand, production costs (particularly feed prices) and the lag time responding to market signals are contributing to high beef prices, she says.
In fact, supply is down significantly. Beef production in Canada peaked in 2008 and has since declined by 20 per cent.
And even once it starts rebounding, “building up a herd is a slow process,” Grant says. “It can take up to three years for supplies to increase.”
Like the George Morris Centre, she too expects high prices to prevail throughout the year.
Beef is often featured in grocery store flyers as a loss leader, during spring and summer when barbeque grills are active. But this year, that’s improbable. The centre notes as the wholesale price of beef remains high, retailers are finding it increasingly difficult to feature it in promotions.
Over the last several years, beef typically has been featured on two-thirds of the front pages of flyers across the country. But that share has been declining in recent weeks.
“The higher the wholesale price of beef becomes, the less attractive beef can be priced at in flyers,” says the report. “Retailers appear to be responding rationally to the higher beef costs and weaker margins by featuring less.”
That, it adds, has a big influence on sales. Flyers can move up to 10 times the volume of a regularly priced beef item.