Quebecers could pay “between 25% and 40% more” if they want to enjoy a good steak on their barbecues in the coming weeks.
“It’s quite spectacular what we’re seeing with the price of beef since the pandemic,” says food expert Sylvain Charlebois. Since March 2020, the price has increased steadily.”
And the reason for the significant increase that is coming is quite simple. In the past year, livestock farms have reduced the size of their herds due to skyrocketing costs.
“Feeding livestock is becoming more and more expensive,” adds Charlebois. The size of the herds is the same as what we saw in 1990. There is less inventory.”
Currently, the price of beef on world markets is 11% higher than the previous historical record of 2014.
“At that time, several butcher shops had closed their doors. Today, we anticipate that it will last longer and that it will hurt independent butchers more.”
A blow
Butchers have been accustomed to recurring increases in the price of beef for several years. However, they did not expect this year’s event to be so big.
“It’s going to hurt,” says the owner of the Terre et Océan butchery and fishmonger, Carlos Dighlawi. People are already chasing the specials.
“The increases have already started. I have already had three increases for the same kilo of ground beef in the last month. However, I have decided not to increase my prices even if my profit margin is slimmer. On the other hand, at some point, I know that I will have no choice.”
As for the Côté butcher shop, we are wondering about the increases in recent years.
“Not all cuts increase at the same time,” says François Pineault, associate butcher. Since last year, it’s been the round [coupe la moins chère] which has seen good increases, but we all wonder why.
“For example, we sold our Boston steak more expensively [meilleure qualité] cheaper than our round steak.
“If we have an increase of 10 or 25%, I will have no choice but to pass it on to my client because my fixed costs are still the same.”
Both butchers believe their customers are likely to switch to seafood, poultry or pork if beef is too expensive. Currently, due to its affordability, pork has several new fans.
The interest rate storm
Meanwhile, on Quebec breeding farms, it is not more obvious. They are faced with the same reality as their Canadian and American colleagues.
Maintaining their livestock is a big part of their budgets.
“Everything has increased like diesel, fertilizer and seeds,” mentions Chantal Agnew of the Bon Bœuf farm and boutique in Saint-Chrysostome. Our animals eat what we harvest on our land, but the cost and rental of machinery has also increased significantly.”
There is one factor that puts even more pressure on the shoulders of breeders: interest rates.
“For the small producer who has loans, this is an important factor,” adds the woman who has a herd of 200 head. This is what hurts the most right now.
“When rates went from 2 to 7%, it had a big impact on our profit margins. We want to avoid putting the cost of our interest on the price of our products at the store. We don’t want to scare customers, but we want to cover our costs as much as possible.”