Beef prices up 13 percent in Canada amid historic supply shortage

If you've felt sticker shock at the butcher counter lately, you're not alone. Fresh or frozen beef prices in Canada have climbed nearly 13 percent since May of last year, according to Statistics Canada — far outpacing pork (up 3 percent) and chicken (up 1.8 percent).

The spike reflects a tightening vise: North American cattle herds are at "historical lows," according to Calvin Vaags, president and CEO of True North Foods, a beef processing facility in Manitoba. Meanwhile, demand has surged to its strongest level since the early 1980s, fuelled by a surge in protein consumption.

Ranchers are now in a "rebuilding phase" where they're growing their herds rather than sending cattle to slaughter. Tyler Fulton, a rancher in Manitoba and president of the Canadian Cattle Association, said the earliest new beef would reach consumers is three years away. "It's hard to wrap your head around the economics," Fulton said.

Statistics Canada data shows the Canadian cattle herd did rise this January, marking the first year-over-year increase since 2018. Conditions across Canada are "excellent" for raising cattle, Fulton added, with no significant drought concerns except in a small area of B.C.

Market analyst Kevin Grier says the price climb defies expectations. "People keep saying, 'What's the breaking point? When's the breaking going to go? And I don't know, because I've been expecting the breaking point to come for three years," Grier said. "You could always make an argument that we've reached the limit, but it just seems like we keep going."

The federal government's National Food Security Strategy is addressing market concentration in slaughterhouses, which leaves the supply chain vulnerable to shocks.