Beef prices have reached historic highs amid supply shortages, and this trend shows no signs of stopping. Consumers will likely have to rethink their beef consumption through 2025.
Published at 1:50 a.m.
Updated at 7:30 a.m.
Sorry beef lovers, but prices are likely to stay high until the end of 2025, or even longer. Droughts in North America have forced many ranchers to reduce their herds, leading to a decline in supply. Rising production costs, high interest rates and shrinking herds have collectively driven up prices. This situation is favorable for producers, but much less so for consumers.
Beef has become one of the main drivers of food inflation. According to Statistics Canada, the price of stewing beef increased 19% in one year, while prime rib jumped 26%. Even ground beef, often seen as the most affordable option, has seen a 15% increase this year. These increases come on top of several price increases in recent years. If the trend continues, farm prices could continue to rise until mid-2025, putting prolonged pressure on retail prices.
Unless they have direct contact with a producer or find great deals, consumers should expect to pay significantly more for their beef. In the United States, the situation is similar. The price of a pound of ground beef reached US$5.67, a record.
Although meat sales fell 3% last quarter in Canada, according to marketing research firm Nielsen IQ, consumers are still buying beef, but the volume has declined significantly.
We already experienced this in 2015, when retail beef prices increased by almost 30% in a matter of weeks. Consumers then reduced their consumption, and sales never fully recovered. Today, the situation could be worse, with the Canadian cattle herd at its lowest since 1987. In 1987, there were 15 million fewer Canadians. In the United States, the decline is even more marked, reaching a level not seen since 1951.
Although some ranchers might try to rebuild their herds to take advantage of the high prices, it will take time. Economic and political uncertainties are holding back any rapid expansion.
Beef prices are therefore expected to remain high until 2026. The industry will face the challenge of maintaining consumer interest in the face of this situation. If prices push consumers to change their habits, it could have lasting consequences for the beef sector, a pillar of the North American agricultural economy.
For Quebec beef under the Bœuf Québec brand, on the other hand, all this is perhaps good news. Short distribution channels that support local products are less affected by macroeconomic movements, such as those currently affecting the global beef market. The price of Quebec beef is likely to change little.