The Windsor Star
February 9, 2011

AMHERSTBURG, Ont. — With farmers giving up on raising cattle, the price of beef is rising and your steaks and hamburgers could cost 20 per cent more by barbeque season. “I hate to say this but I can see where beef is going to be a luxury,” said Amherstburg farmer Robert Bailey Tuesday.

Even though the price for his cattle is increasing, Bailey said he’s still not making enough money to cover his costs such as the higher price of corn to feed cattle. Bailey, 70, said for the first time since he started in 1959, he likely won’t have any beef cattle this spring. “It’s not worth it.”

The price of hamburger has already gone up about 10 per cent in Canada in the last year and you can expect to start seeing higher prices for beef in general.

Ted Farron, owner of Ted Farron’s Gourmet Butcher Shop, said the supply of beef is “scary low” at the moment and he estimates beef prices could rise 20 to 30 per cent by barbeque season.

His supplier, Norpac Beef, has already seen a 20 per cent increase in the last six months for the cattle it buys. Norpac owner Ron Heleniak said it’s difficult to know how restaurants and stores will deal with the rising costs but consumers will definitely see increases on hamburger because it’s in high demand. During poor economies, people tend to buy more hamburger. He said a 15 to 20 per cent increase on beef in the stores depending on the cut is a safe guess.

Norpac Beef manager and cattle buyer Matthew Heleniak was heading to get cattle at a sale of about 100 animals where two years ago buyers would be picking from double to triple that number. “A lot of people got out of the business. It could be here to stay,” he said of the higher price.

The increased price of corn and older farmers means there’s more of an incentive for most farmers to use land for corn than cattle, said Shawn Morris, president of the Essex County Cattlemen’s Association.

Morris, 39, said he doesn’t expect retail beef prices to go wild but he also doesn’t expect cattle farmers to boost their herds for a few years. And there won’t be more beef until three or four years after farmers decide to increase herds.

Morris said farmers need the higher beef prices to make money for the first time since 2003. “If virtually everything else goes up in price then we need to expect food to go up,” he said.

The number of beef cattle around the world is dropping. In Canada, beef cattle decreased from 15 million to 13 million since 2005, said Brian Perillat, a senior analyst with Canfax, a division of the Canadian Cattlemen’s Association. Canada lost 15 per cent of its beef producers in the last five years and is down to 84,000 beef farmers including 16,800 in Ontario, Perillat said.

Jim Clark, executive director of the Ontario corn fed beef program, said he thinks the price jump consumers see could be more in the 10 per cent range. He said shoppers can expect to see beef prices rise steadily over the next decade. Clark said the cattle price for farmers never kept up to the production costs, Ontario no longer has the export advantage of a low Canadian dollar and young farmers aren’t entering the business.

He also expects pork prices to rise. Prices for hogs have gone up but that’s not because of a shortage, said Mary Jane Quinn of Ontario Pork. She said it’s difficult to predict if there will be a jump in pork prices for consumers because of competition from U.S. imports that lowers prices.

There’s a seasonal shortage of Ontario lamb along with higher prices now but that will sort itself out before Easter as more lambs are born.