Ask John Wildenborg if he thinks Canadians will be paying more for steak during future barbecue seasons, and the owner of Calgary specialty butcher shop Master Meats doesn’t hesitate.
“Prices are definitely going to go higher, no ifs, ands or buts about it,” he said.
“It keeps me up at night, actually, thinking about coming into the summer and where prices are going to be. It’s not a good situation.”
Beef — whether in the form of a juicy burger or a classic tenderloin steak — is a mainstay of many Canadians’ diets. Its popularity is the reason why consumer demand for beef has historically remained strong, even through periods of economic downturn when Canadians have less money in their wallets.
But the business of beef is changing, in large part due to consecutive years of severe drought across North America’s main cattle-producing regions. From parched southern Alberta to water-scarce east Texas, ranchers have been downsizing their herds due to a lack of grass for grazing. The resulting shortfall in cattle supply is reducing overall beef production and helping to push retail beef prices higher.
“A 10-ounce New Yorker right now … would cost around $20. Three years ago that was maybe a $15 steak,” Wildenborg said.
“And this is usually the slow time of year for beef, but wholesale prices haven’t dropped off at all since Christmas. I’m paying 40 per cent higher than I was last year at this time.”
Food in general, as consumers know, has increased in price over the last three years due to the COVID-19 pandemic and an overall rising cost of living. But while inflation is starting to moderate in a number of food categories, the drought factor means beef prices are not.
“When you talk to producers, whether it’s in the Canadian provinces or key cattle-producing regions of the United States, many producers will tell you they’ve had to experience two ‘hundred-year droughts’ back-to-back over the course of 10 years,” said Lance Zimmerman, a Kansas-based senior beef analyst with Rabobank.
“Add to that a global pandemic and all the challenges that go along with that, and we’ve had a 10- to 15-year period that’s been particularly challenging for a lot of cattle producers. It has led to a lot of liquidation.”
Liquidation is when a rancher makes the decision to sell off a greater proportion of heifers and cows for slaughter rather than retaining them to grow his or her herd. Ranchers may decide to do this because of a variety of factors, including high input costs, limited labour availability and high interest rates, as well as the challenges associated with long-term drought.
In Canada, the size of the national cattle herd has been declining for years, a trend that continued last year amid a punishing drought in Western Canada. This country’s beef cow inventory fell in 2023 by 1.5 per cent to 3.66 million animals — the lowest level since 1989.
South of the border, U.S. Department of Agriculture figures show an even more dramatic story. There, the national cattle herd has been contracting for five years, reaching 28.2 million animals in 2023. That’s the smallest number of cattle the U.S. has seen since 1961.
Fewer cattle means less beef production, which translates to fewer exports as well as higher prices at the retail counter.
“Unfortunately for the consumer, those prices are going to ratchet higher,” said Zimmerman.
“On a U.S. basis, retail beef prices are currently about US$8 a pound, and by our estimation, over the next several years we can expect another dollar-and-a-half increase, quite easily.”
In southeast Alberta, near the tiny community of Jenner, rancher Brad Osadczuk shipped some of his cattle east to Saskatchewan last summer to graze on rented pastureland. It was the only way he could feed them because his own grassland was entirely depleted by drought.
“This past year was the worst year for drought in adult life and I was born in 1971,” Osadczuk said. “Our native prairie just never turned green.”
While Osadczuk was able to avoid reducing his herd size, he said many ranchers in his area have been choosing not to replace cows after they sell them for at least the past five years.
“We’ve been mitigating drought for a long time,” he said.
“So we’re kind of at a point in this part of Alberta where our herds are pretty small already.”
Even if the current drought cycle were to end this year, cattle numbers can’t rebound overnight. That’s why experts say the new era of higher beef prices is here to stay, at least for a while.
“This isn’t a short-term thing,” Osadczuk said.
“For a female calf that is born today, it’s four years before that female can have its own calf that can end up in the food chain.”
Anne Wasko, a Saskatchewan-based market analyst with Gateway Livestock, said North American cattle and beef supplies will remain tight for several years, and much is riding on Mother Nature.
“We’re going to be looking at smaller supplies in ’24, ’25 and possibly out as far as ’26,” she said.
“We truly need moisture, first and foremost, to turn this boat around.”
This report by The Canadian Press was first published Feb. 25, 2024.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
