Canfax CEO Brenna Grant spoke at the Canadian Beef Industry Conference (CBIC) in Penticton, “We’re challenged when the price relationship with pork and chicken doesn’t work out, and we’re seeing incentives for consumers to switch proteins,” says Grant. Retail beef prices hit record levels in the first quarter of 2022, Grant said. This means that some consumers will have to switch to pork and chicken.
“Pork and poultry prices have adjusted again as prices fell in the second quarter, but they remain high compared to historical price ratios for poultry,” he said. “So if this continues, we expect more switches to poultry as the year progresses.”
“There was a lot of volatility in the market and a lot of food inflation. But as you can see, the cost structure is aligned across the supply chain,” she says. “There’s not much room for them to go further down. Retailers’ margins have been pushed into negative territory over the past two years. And some of these price adjustments will allow them to get back into the black.”
Another issue driving beef prices is consumer supply. In 2021, Canada was a net importer of beef. Now they are a net exporter, with Grant saying about 4,000 were exported in the first half of 2022.
All these exports are tightening the supply of beef to consumers.
“With this very strong net beef trade, with large exports and slightly less stable imports, and relatively stable production, the supply of pure beef to Canadian consumers is at its tightest since 2015,” said Grant. say.
“Basically, domestic breeding is relatively stable,” she says. “The supply shortage, especially for Canada, is due to a steady increase in net trade, increased exports, and a steady increase in imports, which is actually reducing beef production in the Canadian market.”
Cattlefax’s Duane Lenz also presented at CBIC on the global beef market and outlook for the remainder of 2022.
According to him, high retail prices are a global phenomenon, but manufacturers need not worry too much.
“Everyone thinks retail prices here in Canada and the U.S. are too high,” Lenz says. “At the same time, someone in China is buying it at our existing price and shipping it all over the world, and they are happy to have it. So, add in the shipping costs, and all is well, so to speak. ”
Grant adds that total beef production is up about 2% this year. She says the main thing producers should be aware of is that cattle prices can rise in the fall.
“Importantly, prices are likely to rise this fall.”
Follow us on LinkedIn, Twitter & Facebook.
Source: Canadian Cattleman