Cattle prices are rising because supplies are falling

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This might take a little sizzle out of your barbecue season.

Consumers can expect to shell out more for beef this summer, says a report released Thursday by an agricultural think-tank in Guelph.

Kevin Grier, who wrote the report, predicts retailers will respond to a sharp rise in cattle prices by charging more for beef and having fewer sales.

“If you would have thought $4.99 or $5.99 would have been something attractive for strip loin last year, you are probably looking at $6.99 or more on the front page of a flyer. You will see less of those items featured and you will see them at higher prices.”

Consumers are expected to react by buying less beef and more chicken and pork. That could have long-term implications for the beef industry, Grier warned.

“The good news for producers are prices are high and returns are good. But over the longer term, three years or so, when production starts to increase, we could find an environment where consumers are getting used to eating less. We could have a market share fight again.”

Grier, a senior market analyst with the George Morris Centre, said cattle prices are rising because supplies are falling.

The report said over the past 14 years, all food items have increased in price by 3% a year while beef prices went up 4%.

The centre forecasts beef prices will likely climb by 5% in the first half of this year.



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