There is no shortage of reminders of the fundamental relationship between supply, demand and price, but paying (as I recently did) $16 for a small pack (about 500 grams) of ground beef made my heart skip a beat. (I should have gone for a larger “value pack” and froze what I didn’t use or looked for an “enjoy tonight” sticker to get $2 off, but even then the price would still be eyepopping.)

The reason for my sticker shock is remarkably straightforward: the number of cows in the North American herd has gone down (low supply) while people keep buying beef (high demand), so the price has gone up.

The latest reading from the Consumer Price Index confirms my experience at the grocery store was not a one-off with the price of fresh or frozen ground beef in Canada 21% higher in April 2025 than it was in April 2024.

According to Statistics Canada, the Canadian cattle herd hasn't been as small as it was at the start of 2025 since 1988 (1994 in Alberta). In the United States, the cattle herd is the smallest it has been in 73 years.

In reality, it’s a lot more complex than fewer cows = higher prices with everything from the weight of the cows and feed costs to foreign imports and the availability of labour to dietary preferences and (human) population growth potentially playing a role. Nonetheless, it is a key factor and helps explain the latest data on the price of cattle received by Alberta ranchers released this morning.

Compared to 12 months earlier, the average price of cattle for slaughter in Alberta was 14% higher in April 2025 while the price of cattle for feeding was 26% higher. In both cases, the monthly price was the highest it has ever been (see the chart below). The high prices are a boon for the cow/calf sector but can be challenging for the feedlot and packing sectors.

Because it will take time to rebuild the North American cattle herd, beef prices are likely to stay elevated for some time to come.

Answer to the previous trivia question: According to Google Gemini, Fort McMurray is called “Fort Mac” because "Fort Mc" sounds silly.

Today’s trivia question: When did Alberta’s cattle herd reach its largest size?