Breaking News on Food and Beverage Processing and PackagingWorldUSEurope

News > Processing

Meat prices are beefing up

While North American beef and pork prices are at top levels, analysts expect relief later this year.
While North American beef and pork prices are at top levels, analysts expect relief later this year.

Food producers are feeling the heat as the cost of red meat continues surging, but analysts anticipate the trend likely will cool later in the year.

Prices of beef and pork have surged over the past several months, with food producers and consumers alike feeling the heat. However, market intelligence from BMO Economics indicates those figures (currently at a 30-year high) could drop off before the end of the year.

High meat prices

Aaron Goertzen, economist for BMO Capital Markets, told FoodProductionDaily hog and cattle prices are up 18% and 24% respectively from this point last year.

After adjusting for inflation, hog prices are now at their highest since the mid-1990s, while real cattle prices are higher than they've been since the early 1980s,” he said.

One factor affecting the speed of the recovery in prices: to expand supply, cattle ranchers first have to restrict the supply for breeding purposes. Furthermore, hog prices have been hit by a virus in last year’s herd, estimated to have felled approximately 7m piglets.

Feeling the pinch

Goertzen said while shoppers are feeling the pinch at the cash register, but they share the burden with others on the meat supply chain.

Consumers are not alone; food processors, grocery stores, and the restaurant services industry have all have seen margins come under pressure as wholesale meat prices have risen,” he said. “Hog and cattle farmers, on the other hand, are enjoying a much-needed renewal in profitability after several extremely tough years.”

US vs. Canada

Not all North American countries are feeling the same effects. Goertzen pointed out red meat prices have risen more in Canada than the US, thanks to the state of the Canadian dollar and other factors—tough for consumers, but good news for cattlemen and processing equipment suppliers.

This period of profitability will allow farmers to invest in their businesses with purchases of new equipment and facilities,” he said. “This reinvestment will drive growth in not only the Canadian red meat industry, but also in rural communities coast-to-coast.”

Goertzen added BMO economists expect pork prices to rebound by late 2014. Cattle prices may take a bit longer but should turn around in 2015.

Subscribe to our FREE newsletter

Get FREE access to authoritative breaking news, videos, podcasts, webinars and white papers. SUBSCRIBE

Post a comment

Comment title *
Your comment *
Your name *
Your email *

We will not publish your email on the site

I agree to Terms and Conditions

These comments have not been moderated. You are encouraged to participate with comments that are relevant to our news stories. You should not post comments that are abusive, threatening, defamatory, misleading or invasive of privacy. For the full terms and conditions for commenting see clause 7 of our Terms and Conditions ‘Participating in Online Communities’. These terms may be updated from time to time, so please read them before posting a comment. Any comment that violates these terms may be removed in its entirety as we do not edit comments. If you wish to complain about a comment please use the "REPORT ABUSE" button or contact the editors.

Related products