Wednesday, October 27

Oh no Canada! Bacon is leading the pack of sizzling hot meat prices


At these prices the butcher may be the new lonely Maytag repairman

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Supply chain crunches and a prairie drought are combining to push up meat prices across Canada about three times faster than inflation, according to Statistics Canada and Dalhousie University in Halifax.

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Average bacon prices in August were nearly 14 per cent higher than a year earlier, while a sirloin steak was more than 12 per cent expensive and even wieners increased more than 13 per cent over the same period, according to StatsCan. Inflation hit 4.1 per cent in August, its highest since 2003.

“Many staples including meat, dairy, and groceries have increased in recent months due to macroeconomic shocks, caused by both unfavourable weather patterns in the northern hemisphere and logistical challenges due to the global pandemic,” says the Agri-Food Analytics Lab at Dalhousie in a survey published Sept. 29. “Meat is the category that most Canadians have noticed a difference in prices over the last six months.”

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About half of Canadians have reduced meat purchases.
About half of Canadians have reduced meat purchases. Photo by Drew Angerer/Getty Images

The price surges are changing the way people shop. About half of Canadians have reduced meat purchases, while more than a third are buying more no-name products, using coupons more often and choosing more discounted items close to expiry dates, the survey of 10,000 people showed.

“Inflation is hitting Canadian consumers at the grocery store, as pandemic-related disruptions that impacted food production and supply bottlenecks have yet to subside,” Royal Bank of Canada said in a Sept. 30 report. “With inflation in Canada running meaningfully above the Bank of Canada’s target, financial markets are currently pricing in possible rate hikes by the end of 2022.”

The Agri-Food Analytics Lab says it gauges annual food inflation across the country at 5 per cent compared with StatsCan assessing it at 2.7 per cent.

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Prof. Sylvain Charlebois, head of the Dalhousie researchers, says there’s a disconnect between the two methods because it’s not clear what brands and stores the federal agency includes. Also, the package sizes it measures are out of date as groceries engage in shrinkflation: charging the same price for a smaller quantity.

The lab uses BetterCart Technologies Inc., a Canadian company that monitors flyers, websites and other sources daily, Charlebois says.

According to StatsCan, ground beef actually dropped a few cents to $11.56/kg in August from $11.69/kg a year earlier. It touched $11/kg in June and in Sept., 2020.

Carrots, onions, potatoes, frozen fries and baked beans also fell compared with StatsCan tallies of a year earlier. Oranges, ketchup, roasted coffee and white sugar also declined. Bread edged 2 cents lower to $2.82 a loaf in August.

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However, BetterCart says ketchup rose 7.3 per cent and potatoes climbed 12 per cent since January. It says frozen french fries jumped 26 per cent since January, not the 5.9 per cent calculated by StatsCan.

“Butter offers the most shocking difference,” Charlebois says in a recent article, noting the spread’s “whopping” 36 per cent surge according to BetterCart versus 2.8 per cent estimated by the federal consumer price index. He said butter was expected to rise after the dairy industry was exposed using palm oil in cattle feed this year.

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Back in the protein department, even switching to meat substitutes is no panacea. Prices are likely to increase for Beyond Meat Inc. products after one of its suppliers of peas, a key ingredient in some meat alternatives, said pea prices are doubling compared with 2020 after drought ruined 45 per cent of this year’s Canadian crop and adverse weather also affected European farmers.

Prices for meat substitutes like Beyond Meat Inc. products are also likely to rise because pea prices are doubling compared with 2020 after drought ruined 45 per cent of this year's Canadian crop and adverse weather also affected European farmers.
Prices for meat substitutes like Beyond Meat Inc. products are also likely to rise because pea prices are doubling compared with 2020 after drought ruined 45 per cent of this year’s Canadian crop and adverse weather also affected European farmers. Photo by Daniel Acker/Bloomberg

Canadian meat consumption hit a low of 86.8kg per person in 2019, though consumption may climb to 98.4kg in 2025, according to market researcher IBISWorld Co. The pandemic’s uncertain economic climate and competition from meat alternatives lowered revenue for the country’s largest processors — Olymel LP, JBS Food Canada Inc., Maple Leaf Foods Inc. and Cargill Inc., IBISWorld said. Revenue will climb this year, but won’t return to the high levels of 2016 for several years, IBISWorld said.

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Chicken and egg prices were up about 7 per cent to $8.13/kg and $1.91 a dozen in August compared with a year earlier, according to StatsCan.

Bacon may owe part of its higher price to a strike that closed an Olymel pork processing plant in Quebec for four months, causing industry-wide disruption.

Of course, prices may be higher in certain areas due to other constraints. A reporter in Fenelon Falls, Ont., last week saw a Sobeys Inc. grocery charge nearly $80 a kilogram for the best cuts of meat, more than double the $39.26 a kilogram for prime rib roast, the most expensive item, on the StatsCan tally for August. At those prices the store butcher may be the new lonely Maytag repairman.

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