Sticker shock at the meat counter
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May 28, 2014  |  Vote 0    0

Sticker shock at the meat counter

Beef, pork prices on the rise just in time for barbecue season. Higher prices for grain and fuel, shortages due to disease contribute to sticker shock at the meat counter


Well-aged New York strip loin steak? That’ll set you back $15.99.

A semi-boneless whole flattened chicken? That’s a more palatable $5.99 a pound.

What to buy for that weekend barbecue with your neighbours, family or friends? Your taste buds say one thing, your pocketbook says something else.

With barbecue season officially underway as of the Victoria Day weekend, consumers are in for a bit of sticker shock at the meat counter.

Beef prices are up “substantially,” says Leila Batten, owner of Whitehouse Meats in Toronto’s St. Lawrence Market. “Prices started increasing in the spring. It’s been going up, literally, weekly.”

The price increase is due partly to higher input costs – chiefly the price of feed and fuel – and also a falling Canadian dollar. Wholesale prices for red meat are quoted in U.S. dollars.

But it’s also because beef and pork are in short supply, industry experts said.

The industry is highly cyclical. When prices are down, farmers reduce their herds or switched into grain production or other types of farming.

When prices rise, it takes time to ramp up supply, particularly in beef.

“The beef industry is unique, compared to pork and chicken. It’s much easier for those to increase or decrease herd size because the breeding cycle is shorter,” says Ron Glaser, spokesperson for Canada Beef, an association of beef exporters and producers.

“For beef it takes two years from pregnancy to market ready or breeder. If a producer decides today the market signals are favourable, it takes two to three years for more beef to get into the marketplace,” Glaser said.

Glaser partly blamed the lingering effects of BSE (bovine spongiform encephalopathy), better known as mad cow disease.

The disease, which attacks the cow’s brain, sent a chill through export markets in 2004. By the time those export markets re-opened, supplies had dwindled as farmers reduced their herds or switched into grain.

“Cattle prices climbed to record highs in both Canada and the United States amid tight supplies. The U.S. beef cow herd has dropped to a 50 year low and the Canadian beef cow herd is at its lowest level since 1992,” Scotiabank economist Patricia Mohr noted in her monthly commodity price index for April.

Hog prices have also soared to a record in Ontario, tightening pork supplies. The hog herd has been reduced in the United States due to the PED (porcine epidemic diarrhea) virus, Mohr noted.

PED, which started in the U.S. but has spread to Ontario, is not harmful to humans but is deadly to piglets.

While higher prices are a boon to farmers, it’s not such good news for food processors and retailers.

Retailers and processors are attempting to limit price increases at the grocery store by rationing supplies and reducing the amount of product in a package, Mohr said.

Maple Leaf Foods Inc., Canada’s largest meat processor, said pork prices are already up 14 per cent this year – due to the “unprecedented” impact of the PED virus on hog supplies and also the lower value of the Canadian dollar.

Hog prices in the futures market on the Chicago Mercantile Exchange spiked 60 per cent in the first three months of the year, Maple Leaf Food’s president and chief executive officer Michael McCain told analysts on a May 1 conference call.

Calling it a “crisis” that has affected all meat processors, he said, “it has required us to pause and reset our pricing on short notice all of which will be rolled out across the business in May.”

The company expects to see a return to more normal conditions later this year, he said.

Intense competition in retail means not all those price increases will make their way to the consumer. And, of course, consumers can always switch to other foods.

At Whitehouse Meats, Batten says she tells customers they can stretch their dollars by buying smaller quantities of better cuts, by choosing less expensive cuts, or by mixing it up on the grill.

A couple of New York strip loins combined with a semi-boneless flattened chicken can go a long way on a platter, she says.

A flavourful bone-in “Tomahawk” rib steak – at $13.99 a pound — can be sliced to share among two or three people, she adds.

“People are looking at what they can afford,” she said. ‘We suggest people do an assortment as opposed a full beef BBQ.”

With BBQ season just getting off the ground, Batten said, her business hasn’t yet felt the full impact.

“But from everything I’m hearing, the summer’s going to be very warm and nobody’s going to want to cook inside,” she said.

Toronto Star

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