Business Environment Profiles - Canada
Published: 19 July 2024
Price of red meat
221 Index
4.9 %
The price of red meat represents the price received by processors for all meat (except poultry and seafood), which includes beef, pork, lamb, veal, mutton and other meat products. Beef and pork products comprise a vast majority of the total production. Data is sourced from Statistics Canada and is presented as an index with a base of 2010. Forecasts are sourced from the medium-term forecasts provided by Agriculture and Agri-Food Canada.
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The price of red meat is most significantly influenced by the supply of livestock and rising health consciousness which can decrease demand. During the past decade, this driver has trended upward. Red meat products are essentially interchangeable and thus the prices of individual meat products tend to fluctuate with one another, mitigating any significant loss from one category. Nevertheless, red meat producers may lower prices to entice these consumers back when consumption shifts to lower-fat poultry. Moreover, during economic downturns, consumer disposable income levels are suppressed, decreasing demand for red meat products, typically pricier than poultry products. In the years since, disposable income increased, pushing up demand for red meat products, thereby increasing prices.
Furthermore, Canadian producers of red meat have increased their exports to Asian countries. The volume of red meat exported to China alone increased by an annualized 16.0% between 2010 and 2016, according to the Conference Board of Canada data. In addition, several disasters struck cattle and hog farmers at the beginning of the five-year period, which decreased livestock herd numbers. The restricted supply pushed livestock prices up temporarily between 2015 and 2017, increasing red meat prices. However, as producers began to recover and further increase their livestock numbers in the latter half of the period, prices of red meat began to trend downward, returning to prices similar to the beginning of the five-year period. However, global supply chain disruptions and reduced consumer demand amid the COVID-19 pandemic forced farmers to slow production. Economic recovery in 2021 spurred demand for red meat products, sharply increasing prices as demand outpaced available supply. This trend continued in 2022 amid rising inflation, which raised the price of most goods. With this trend of high inflation continuing through the end of the period, the price of red meat is set to increase at an annualized rate of 4.9% over the five years to 2025.
As export demand increases, price volatility is expected to continue over the next five years. Ho...
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