Key points

• Droughts and processing bottlenecks have pushed beef prices beyond general food inflation, placing a squeeze on both consumers and producers.
• The herd rebuilding cycle has begun, but because cattle production follows a strict biological timeline, tight market supply and elevated prices will persist in the medium term.
• Choosing Canadian beef over foreign imports preserves essential price signals, encouraging Canadian producers to expand their herds, supporting industry longevity and protecting Canada’s food sovereignty. 

Step into the meat department of any Canadian grocery store, and the price tags on ground beef and your favourite cuts of steak tell a stark story. The increase in beef prices has been outpacing general food inflation, forcing consumers who want to eat beef to stretch their grocery budgets, switch from premium cuts to less expensive options like ground beef and brisket, or cut back in other areas.

For today’s Twenty-Four, we sat down with Lee Irvine, Director and Beef Segment Specialist at ATB Financial, to unpack what’s driving beef prices, how we got here, and when—or if—we can expect relief.

Compared to five years ago, the price of food in Canada purchased from grocery stores is up 29%; for beef, it’s 61%. Shoppers are feeling the squeeze, but higher beef prices aren't yielding windfall profits for local ranchers.

"Ranchers and feedlots don’t set the price and they’re not getting rich," Lee notes. Like consumers, ranchers are also dealing with inflation due to rising operating expenses and the increased cost of replacing breeding stock and feedlot inventory.

Beyond the price

To understand what is driving prices, it helps to examine how value flows through the beef supply chain. Retailers and meatpackers establish wholesale prices based on consumer demand, sending a price ripple backward to feedlots (where cattle are fed to reach their optimal weight before harvest) and, ultimately, cow-calf producers on the ranch.

The primary catalyst for today’s tight supply was severe droughts between 2021 and 2023 in western Canada and the United States. Parched pastures and soaring feed costs forced ranchers to reduce their herds, shrinking North American cattle inventories to multi-decade lows.

Initially, this shortage gave feedlots short-term pricing power as meatpackers bid aggressively to keep plants running. But as packers absorbed severe operational losses, they pivoted to their primary operational lever of slowing down processing line speeds and reducing shifts.

"The packers slowed their chain speeds and reduced shifts, which backed up the feedlots," Lee explains. "That increases the supply of cattle waiting, allowing packers to bid lower and shift leverage back into their favour."

By restricting plant capacity, packers created a bottleneck that backed up feedlot inventories well above normal levels, escalating cost pressures and eliminating margins for operators.

The farm gate

As feedlots absorbed those losses, lower purchase offers trickled down to cow-calf ranchers. Faced with weaker market bids for calves, ranchers made a decision that will ultimately set the stage for consumer price relief down the road: keeping young heifers on pasture to breed rather than selling them into a losing market. Expanding breeding herds today is the essential first step to increasing tomorrow's beef supply and bringing retail prices back down.

While heifer retention officially marks the beginning of the herd rebuilding phase, relief for family food budgets will not happen overnight.

"This is a time functionality that we don't have—we physically cannot speed it up," Lee emphasizes. "This isn't like putting another shift onto a manufacturing facility to just make more widgets."

Because it takes 24 to 36 months to retain a heifer, breed her, raise her calf, and bring that beef to retail shelves, North American supplies will remain tight. In the meantime, controlled processing speeds will keep wholesale supplies disciplined, keeping retail prices elevated.

Food sovereignty and the future

When domestic prices spike, a common question arises: why not import cheaper foreign beef?

While meatpackers may favour foreign imports to lower costs, Canadian cattle ranchers strongly oppose them. Flooding the market with cheap imports disrupts domestic price signals, discouraging ranchers from reinvesting in their herds. Protecting those price signals is essential to maintaining Canada’s long-term food sovereignty, ensuring a self-sustaining agricultural sector, and keeping the next generation of ranchers on the land.

Ultimately, the choice at the meat counter carries weight far beyond a single grocery bill. Buying “beef with the leaf” supports Canadian producers, workers and the economy.

"We owe the consumer a debt of gratitude," says Lee. "They continue to support us and choose Canadian beef, even when budgets are tight. When consumers buy Canadian, they aren't just supporting current food production—they’re helping secure the next generation that will feed the next generation of Canadians."

Answer to the previous trivia question: The Enchanted Owl is the name of the stone-cut print by Inuk artist Kenojuak Ashevak (1927–2013) that was featured on a postage stamp in 1970.

Today’s trivia question: Who was the first woman on the Supreme Court of Canada?