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Demand for beef expected to remain strong

The industry is monitoring the possibility that out-of-work consumers may buy less beef during the COVID-19 crisis

Industry representatives say they expect demand for beef to remain strong during the COVID-19 pandemic as consumers continue to stock their freezers.

Speaking at an online town hall meeting April 2, Canada Beef president Michael Young said there may be more demand for hamburger, and he expects demand to last throughout the crisis.

He said the industry is promoting beef to consumers and working with retailers to ensure they have an assortment of products.

Market analysts have said demand for beef will be critical for the industry.

Out-of-work consumers may buy less beef because they might have fewer dollars to spend. While low demand isn’t currently a concern, it may be something to monitor.

“If there are broader demand issues, I think that would be a concern,” said Brian Perillat, a manager and senior analyst with Canfax.

“Beef is the high-end protein and if people don’t have jobs or money, and if there is going to be demand issues, that would be a bigger risk,” he said.

There are also questions about what the impact of higher hamburger demand will be on producers’ bottom lines.

In the United Kingdom, the British Meat Processors Association has said demand for more minced beef, or ground beef, is signaling trouble.

The organization said some retailers are largely ordering ground beef, which is cheaper and less profitable than other cuts.

It said processors can’t sell steaks or more expensive cuts, causing them to lose significant revenue. To make a profit, it said, livestock prices would have to be reduced.

In North America, however, industry representatives don’t expect that to become an issue.

Perillat said North America eats more minced meat, with over half of overall beef consumption being ground beef.

He said closures of restaurants, however, will present challenges. Food services tend to buy higher grade meats.

“With all of that shutting down, those prices will struggle a bit, but we’ll see how the retail demand stands for those middle cuts,” he said.

As well, grilling season is about to begin, he added. Consumers with enough dollars to spend may still be inclined to barbecue, and could take advantage of middle-meat prices.

Rich Smith, executive director with the Alberta Beef Producers, said consumers are currently appreciating food, given many are isolating at home.

He said even if they are experiencing higher retail food prices, it is cheaper than what they would normally spend at a restaurant.

As well, Smith said more expensive cuts tend to sell well in Canada. People are willing to pay more during special occasions.

Young said more people are flocking to Canada Beef websites for recipes. He said there has been an increase of 66 percent in total users.

He said the organization is modifying advertising campaigns to better reach consumers at home.

It’s developed fact sheets to reassure customers that beef remains safe. It’s also sharing the industry’s health and safety practices to ensure stable beef supply, he said.

One current issue facing beef producers is the volatility in the markets, especially with futures. While cash prices are said to not be in unchartered territory, feedlots have generally been facing losses.

The Canadian Cattlemen’s Association has asked the federal government to open up more assistance programs.

As well, producers have said it’s critical borders and processing facilities remain open during the pandemic.

Harmony Beef in Alberta had briefly closed its slaughter capacity in late March, but has since re-started production.

All other beef packers appear to be operating, but they have been implementing new measures to ensure employees are healthy. Marie-France MacKinnon, vice-president of public affairs and communications with the Canadian Meat Council, said some measures include slowing down lines, adding extra shifts for employees and implementing physical distancing.

The Alberta government has partnered with the Canadian Food Inspection Agency. It will allow Alberta inspectors to work at federally regulated facilities. Alberta is also working to bring back retired inspectors.

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