The 2026 FCC Food and Beverage Report states sales among food and beverage manufacturers are predicted to rise by 0.8 per cent while volumes fall by 0.7 per cent, the fourth straight year of decline. It notes sales growth will likely be driven by higher prices, not higher consumption.

WHY IT MATTERS: With trade tensions still disrupting global supply, prices could fluctuate this year, affecting consumers’ choices.

FCC chief economist Craig Johnston said this disparity speaks to the issue of consumer purchasing power.

“Higher food prices over the past several years are really weighing on households’ budgets,” he said in an interview. “They’re making more cost-conscious decisions.”

“This is actually a headwind for consumption and a headwind for volumes.”

He said any upstream changes will no doubt filter down to Canadian producers. Some challenges are shared across sectors.

“When we think about common elements, you can think about the tariffs, the elevated input costs, generally,” he said.

Margins are tight across the sector, including for farmers.

“We’re not seeing massive improvements on margins within the food and beverage manufacturing sector to pre-COVID levels, and we’re not necessarily seeing that filter through to a broad-based increase in margins for primary ag.”

“The industry in general is still going through this adjustment period” he said, “and we do expect that to continue to 2026.”

Trade tensions still a factor

Canada will continue to grapple with trade uncertainty this year, including the recent instability caused by the conflict in the Middle East.

Forecasts for costs of goods in the Food and Beverage Report were made before the crisis, “meaning that if the commodity price surge persists beyond just a few months, there would be upside risks to those estimates.”

FCC had expected pressures on some inputs, such as cattle and hogs, to ease from 2025 highs, but surging energy prices due to the conflict make that less likely.

Costs of production up

Production costs for food and beverage manufacturers increased by two per cent in 2025, driven mostly by raw material costs.

“The increase in raw material costs was driven by disruptions that constrained availability and raised prices,” the report states.

“Some examples from 2025 include avian influenza impacts on poultry … tariffs that increased the cost of imported aluminum packaging and historically low cattle herd sizes across North America.”

Costs across sectors

The report also breaks down costs associated with sub-sectors of food and beverage processing.

In grain and oilseed milling, sales were uneven in 2025 but improved by the fourth quarter. 2026 shows signs of a rebound in sales and volumes.

Large carryover of canola stocks is expected to keep prices under pressure in 2026. Canola prices are expected to fall by 3.1 per cent in 2026.

The report suggested demand for Canadian maple syrup and honey has continued to increase in the global market.

In the dairy sector, 2026 will likely see a 3.6 per cent increase of product manufacturing sales over 2025. Processors are also expected to pass along costs from the producer price increase for unprocessed milk to consumers.

In the meat manufacturing sector, FCC forecasts sales up 1.6 per cent and volumes down by 5.6 per cent.

Tight supplies of live animals, due largely to disease outbreaks, drove prices up in 2025. According to the report, “2026 will likely see another year where price, not volume, drives sales upward.”

Live cattle gave up some of Tuesday’s gains before settling slightly higher, with a meatpacking plant on strike and dry weather and fires in Nebraska further tightening historically low cattle numbers.

CBOT corn futures climbed on Wednesday following crude oil prices, which rose more than five per cent on Wednesday after Iran’s Revolutionary Guards threatened to attack several energy facilities across the Middle East, heightening the risk of further disruptions to energy supplies in the region.

Strength in crude oil is seen as supportive given corn’s role as a feedstock for ethanol. However, rising corn prices also makes feeding cattle more expensive, supporting feeder cattle futures, according to Karl Setzer, co-founder of ConsusAg Consulting.

Meanwhile, workers have gone on strike at a large JBS meatpacking plant in Greeley, Colorado, which is likely to reduce U.S. beef production at a time when consumers face record prices for beef.

CME April live cattle settled 0.175 cents higher at 235.4 cents per pound. April feeders finished down 1.075 cents at 358.725 cents per pound.

Meanwhile, dry weather and fires in pasturelands of Nebraska could displace tens of thousands of head of cattle and spur ranchers to slaughter parts of the herd they have been working to rebuild, according to analysts.

Beef packer margins rose to $142.15 per head on Wednesday, up from gains of $128.90 on Tuesday, and losses of $10.45 a week ago, according to livestock marketing advisory service HedgersEdge.

CME lean hog futures LHJ26 ended up 0.025 cent at 93.75 cents per pound.

— Reporting by Renee Hickman

The deferred live cattle futures have been consolidating in a narrow range over the past month, which has limited the upside in the feeder complex.

Supplies of yearlings or replacements heavier than 800 pounds are increasing as backgrounding operators start liquidating fall-placed calves.

Quality and flesh conditions are quite variable on these cattle, resulting in a wide price structure for similar weight replacements.

Alberta packers were buying fed cattle on a dressed basis at an average price of $520 per hundredweight delivered, up $3-$5 per cwt. from a week earlier. Using a 60 per cent grading, the average live price would be $312 per cwt.

Break-even fed cattle prices on pen closeouts are in the range of $318-$322 per cwt. (all costs included such as feed, yardage and processing).

The TEAM video sale included a group of 62 Simmental-Angus wide, long-frame steers averaging 1,000 pounds with full processing data and implants on 10 per cent barley diet, that sold for $466 per cwt. f.o.b. farm near Lacombe, Alta., for immediate delivery.

The VJV market report from Ponoka, Alta., included a group of black mixed steers on 20 per cent barley diet with full processing records and implants evaluated at 858 pounds that priced at $509 per cwt.

A farmer southwest of Calgary reported that a pen of thinner, Angus cross, yearling heifers with full preconditioning records on light grain and silage diet averaging 875 lb. were valued at $473 that f.o.b. farm.

At the Lloydminster sale, a group of 46 medium to larger-frame Simmental steers with a mean weight of 721 lb. dropped the gavel at $586 per cwt. At the same location, a group of 89 Charolais cross heifers weighing 712 lb. were last bid at $527 per cwt.

At the VJV Westlock sale, a group of 34 Angus Simmental cross weaned steers averaging 677 lb. on five lb. of oats and silage diet with full preconditioned records sold for $610 per cwt.

The Killarney market report included a nine-pack of black steers weighing 621 lb. that were valued at $638 per cwt.

At the Ste. Rose sale, a group of 20 black heifers averaging 606 lb. were last bid at $588 per cwt.

At the Prince Albert, Sask., sale, a smaller package of exotic steers evaluated at 554 lb. sold for $692, and a trio of British-based steers weighing 506 lb. notched the board at $759 per cwt.

North of Calgary, a group of short-weaned red steers averaging a shade higher than 500 lb. with full health processing reportedly sold for $765 per cwt.

Beef supply, demand

According to the U.S. Department of Agriculture, U.S. first-quarter beef production is now expected to finish near 6.360 billion lb., down 200 million lb. from last year.

In the short-term, it appears that U.S. packers are well covered for their nearby slaughter requirements, which may negate the tighter supply fundamentals.

From September 2025 through January 2026, western Canadian feeder cattle prices were premium to U.S. values, resulting in larger imports of U.S. feeder cattle.

The market structure is changing. Alberta feedlot margins are in negative territory for April and May, while Kansas feedlots have positive returns throughout the spring.

We’re starting to see feeder prices in major U.S. markets reflect a premium over values in Manitoba and eastern Saskatchewan.

The U.S. and Canadian fed cattle markets are poised to trade higher during March and April.

Market-ready fed cattle supplies are declining while beef demand tends to surge during the spring period.

January and February are always the lowest months for restaurant spending. This will be supportive for the feeder market on both sides of the border.

Fed market continues to rally

Western Canadian fed cattle prices moved closer to 2025’s record highs during the week ending Feb. 13.

Alberta fed steers closed the week at $310.57 per hundredweight, moving $3.06 per cwt. higher than the previous week . Similarly, fed heifer prices were $3.10 per cwt. stronger than the previous week, closing the week at $308.56 per cwt.

Fed prices have rallied by $12-$14 per cwt. since the beginning of the year, and as of writing were within $3-$7 per cwt. of the record-high prices set last year.

Dressed sales were reported at around $520-$525 per cwt. delivered, up $3-$8 per cwt. from the previous week. All western Canadian packers showed buying interest. Cattle that sold were booked for delivery from immediately to the middle of March.

Interest from U.S. packers was also noted, with buyers seeking cattle for delivery in February and March. Bids were reported at a premium over local deals.

The Alberta fed cash-to-futures basis for the week ending Feb. 13 was at -18.22. This was -4.47 weaker than in 2025 but 2.95 stronger than the three-year average of -21.17.

Western Canadian fed slaughter for the week ending Feb. 7 was 35,518 head, four per cent below 2025 levels.

So far this year, weekly slaughter volumes have not hit 40,000 head per week.

Western Canadian fed slaughter for the month of January was 19 per cent below the five-year average, making it the smallest volume since 2018.

Light trade was reported in Ontario during the week ending Feb. 13, with dressed sales steady with the previous week at $530 per cwt. delivered. Cattle that traded were scheduled for delivery during the week of Feb. 23.

Analysts anticipate that fed prices will remain seasonally supportive throughout February.

Cow prices up

Non-fed prices continued to move seasonally higher during the week ending Feb. 13, with volumes beginning to decrease.

Despite one major packer being off the cow market, prices continue to rise, with support coming from feeder cow buyers.

Cow prices have risen by $13 per cwt. since the beginning of the year, now just shy of the record highs set in May 2025.

Rail prices were also higher during this week.

On a cash basis, Alberta cow prices traded at a discount of $2 per cwt. against the U.S. market.

For the week ending Feb. 7, western Canadian cow slaughter totalled just more than 5,600 head. This was down 29 per cent from 2025 and was the smallest slaughter volume for the start of February since 2005.

The only class of cattle that ran above year-ago levels for slaughter volumes was butcher bulls as more stay in Canada for processing.

Feeder prices strengthen

Western Canadian weekly average calf and feeder prices rose $7-$8 per cwt. during the week ending Feb. 13.

Steers and heifers weighing less than 500 pounds were the highlight of the week, bringing $13-$16 per cwt. more than the previous week .

Steers weighing more than 500 lb. were steady to $10 per cwt. higher, and their heifer counterparts were $2-$4 per cwt. higher than the previous week.

Weekly auction volumes in Alberta were just below 29,000 head. While year-to-date volumes are down seven per cent from 2025, they are also five per cent higher than the five-year average.

In Ontario, average steer and heifer prices climbed $3-$6 per cwt. from the previous week.

Steers and heifers weighing 500 lb. and higher saw an overall stronger tone, but the calf market had a softer tone.

Alberta 550 lb. steer calves brought a premium of $73 per cwt. compared to the Ontario market. Alberta 850 lb. feeder steers were at a discount of $3 per cwt. compared to Ontario 850 lb. steers.

Cut-out values mixed

U.S. wholesale beef prices have been moving lower lately as fed cattle prices south of the border rally.

From Feb. 5-12, U.S. Choice cut-out prices fell by $2.41 per cwt. Conversely, Select cutout values rose by $2.66 per cwt. during this time.

Brian Perillat, an agribusiness specialist with More Than Just Feed who specializes in cattle markets, told the recent Saskatchewan Beef Industry Conference that the futures market remains in an upward trend, but maintaining it will be hard as volatility continues.

“Getting over the next hump could be a challenge, so we’ve got to be prepared,” he said.

Ryan Copithorne, president and founder of Cows in Control, highlighted the 10-year cattle cycle, which usually consists of five years of price escalation, followed by five years of decline.

Currently, the market is entering its sixth year of escalation, so the drop in the market could happen at any time.

Historically, Copithorne said the pullback in the cycle usually involved a 40 to 50 per cent price drop, though he anticipates a gradual sell-off this time rather than a sharp decline.

“It’s not always a perfect five and five, but it’s pretty close, so we’re going into our sixth year now in this rally,” he said.

“At some point, we’ve got to expect this thing’s going to start to roll over. Does that mean it has to sell off hard, like last time? No, I think it can actually gradually sell off. But we’ll see. We’ll let the market dictate that.”

Perillat said looking at the futures market is an important way to keep track of what the market is going to do because the cattle market usually matches the futures market.

It’s also worthwile to keep track of what the Canadian dollar and feed prices are doing because those will also affect cattle prices.

For example, if the Canadian dollar goes up, calf prices come down. It’s the same for the price of feed barley.

Perillat said increased demand has kept the market strong as long as it has.

“Demand is a big, big story. It’s been a huge part of all of this, in terms of what we’ve been able to sell beef for and getting dollars and leverage back and doing a really good job at selling beef really high and getting those dollars back to cow-calf producers.”

Copithorne accredited this partly to less pork and chicken production due to avian influenza, Chinese tariffs on pork and the porcine epidemic diarrhea virus.

However, the current trade situation between Canada and the United States remains a concern.

Currently, around 85 per cent of all Canadian beef goes to the U.S., and increased tensions between the two countries because of president Donald Trump’s trade policies means diversifying markets has become a key goal for the industry.

The uncertainty remains even with China opening its borders to Canadian beef for the first time in five years.

“Politics and everything, that certainly has an impact on us. It’s a great unknown,” Perillat said.

Because the turn in the market is expected to come sooner rather than later, Copithorne emphasized a message that was prevalent at the beef conference — protect your bottom line.

There are multiple ways to do this, including insurance, the futures market and forward contracting.

For beef cattle in Canada, the main insurance program is Livestock Price Insurance (LPI).

Buying a put option works similarly to price insurance, except it is based on the futures market.

Forward contracting is making a deal or a sale for forward delivery.

“LPI and options are really great tools in the sense that they allow you unlimited upside potential, but they cap your downside. And there’s not too many things in life where you can do that.”

Copithorne said even using simple market timing and looking at the historic seasonality can help when making decisions with cattle.

These options aren’t just to protect yourself in a volatile market — they’re also there to prevent the market from completely crashing if it starts to trend downward and everyone starts selling cattle. In that case, when you have set a floor, you won’t be forced to sell.

“If people are just protecting themselves on paper, but still hanging onto their cattle, then you can capitalize on that drop, but without having to sell your capital. And that’s what we’re trying to do with all these different tools,” Copithorne said.

Despite the concerns, upward momentum continues in the industry.

Perillat said cattle-on-feed numbers continue to be strong, and cow slaughter is down in both the U.S. and Canada as some producers expand their herds to take advantage of the prices.

The U.S. beef herd is stabilizing, and while Canada isn’t, producers are culling fewer cattle.

The dairy herd in the U.S. has expanded, which is likely due to the beef-on-dairy trend.

“We’re going to continue to see the realities of probably a large proportion of beef production that is going to originate out of a dairy farm,” he said.

Klassen, presenting as part of The Western Producer Markets Desk Team briefed farmers attending Ag in Motion 2025.

Follow all our Ag in Motion coverage here

Klassen said prices are at record highs right now but the market is transitioning from a peak to a trough. The prospect of a larger calf crop coming to market in 2026 and non-market factors influencing consumer spending could set the stage for a downward trend in prices following the first quarter of 2026.

While touring visitors through the Proven Seed test plots at the recent Ag in Motion 2025 farm show near Langham, Sask., David Cranswick, product line manager for forages, said high cattle prices are driving producers’ seeding decisions.

Follow all our Ag in Motion coverage here

“Cattle pricing remains strong, so producers are still willing to invest long term, and forage stands, perennial stands are long-term investments,” said Cranswick.

It was the same story at the BrettYoung booth, where Kyle Slobodian, regional account manager for northeastern Saskatchewan, said forage sales were excellent across all regions, with producers seeking good-quality feed for their beef herds.

“Years ago, growers kept stands in for 15, 20-plus years, and now we’re seeing probably an average six to seven years of a stand and being replaced with a higher-quality forage,” said Slobodian.

This was echoed by Kaiden Bursaw, BrettYoung’s regional account manager for southwestern Saskatchewan, who has recently seen more producers seeding new forage stands.

“Guys that have 20-year stands that have been sitting there are starting to figure out that their marginal hay that they’re getting out of it is starting to go down and down and down. So they’re starting to reinvest in that,” said Bursaw.

Finding the right forage variety to suit challenging growing conditions has been a popular topic with producers checking out the forage plots at this year’s edition of the farm show, with drought tolerance being of significant interest to many attendees.

“The weather’s ever changing. We’ve had severe droughts in some areas, and finally, they’re getting the moisture and going to have decent-quality yield,” Slobodian said.

“Then we’ve had other areas that received moisture over the last couple of years that are going to have a very thin crop (this year).”

For areas where rain has been in short supply, Cranswick advised looking into alternative options, whether it’s a short-term fix for feed or a longer-term investment to boost forage quality and yield.

“Sometimes annual crops, if you didn’t get the yield you needed off of your perennials, are a good short-term option — something like a short-term rotation of sorghum or millet just in order to get a little bit of feed carrying you into the fall,” he said.

“Or looking at maybe tearing up a stand and looking at getting a really tough, hardy, drought-tolerant species that will be able to survive into the future.”

Watch for more forage-related coverage from this year’s Ag in Motion in Glacier FarmMedia publications in the coming weeks.

Those prices have stayed afloat in 2025, despite worries earlier this year that tariffs would end the party early.

It’s a welcome shift for cow-calf producers, whose market has sunk into signficant price valleys several times in the last 25 years.

While the influx has given beef producers financial wiggle room, what they’re doing with that money depends on farm size, location and individual priorities, among other factors.

Fraser Schram, co-owner of Northfork Ranch Supply in Cartwright, Man., said the farmers he talks to are being cautious. They’re still focusing more on needs than wants.

“They’ve been very wary to this point,” said Schram, whose store has a service area of about 100 kilometres.

“For 10 years, we listened to forecasts that the prices were going to go up, and then there always seemed to be a dark swan event: BSE came along and that blew things out of the water, and then COVID didn’t help. And so nobody is very confident that this is real.”

Connor English, a beef and perennial forage producer northwest of Brandon, Man., said his main priority is cutting costs in any nook and cranny it’s feasible to do so. That includes feeding practices that reduce costs and labour.

In other words, he’s preparing for when the bottom finally falls out of the cattle market.

He’s not focusing on darkening clouds, he insists. He’s looking at their silver linings.

“Right now, with the high market, we can try a few things that maybe we didn’t want to try when the market was low just because (we’re) not as comfortable to try new things when the budgets are that much tighter,” he said.

Schram, who was once a beef producer himself, is as happy as anyone about current cattle prices, but he’s not sure it’s sustainable, especially on the consumer end.

Beef has “become a middle, upper-class food for people to buy,” he said.

“I look at it a bit like lobster now. The way we used to look at lobster was that you had it once or twice a year, and that’s becoming what’s going to happen with beef. It’s a supply-demand thing, and the supply is so low right now. And honestly, I don’t know whether that’s going to turn around anytime soon for the cattle producers. I hope not, but for the consumer, it’s tough.”

Low cattle supplies have been sticky thus far in both the United States and Canada, with herd numbers facing an extended low period following critical and widespread drought early in the decade.

Across the Prairies, beef operations dropped 650,000 head between 2021 and 2024, or about 7.3 per cent, according to data from Statistics Canada.

While high prices would normally incentivize farms to build, industry instead noted an alarming number of herd dispersals.

In March, Tyson Foods chief executive officer Donnie King said U.S. beef producers might finally be entering a rebuild cycle.

Schram said there’s a lot of interest in solar-powered watering systems and electric fencing among his customers. He attributed much of that interest to financial incentive programs that the Manitoba government has rolled out for both.

“A lot of the provincial money that is being spent (on) farmers is on … temporary grazing equipment and solar-powered water systems that help people do a better job of keeping cattle out of waterways and out of dugouts and give them pressure water, etc.,” he said.

English is taking his purchasing focus off equipment that inevitably depreciates in value and more toward products that build wealth.

“I’m trying to just ensure that whatever we’re purchasing right now is an appreciating asset and we’re not going to be getting ourselves into any long-term debts that are just going to continue to depreciate,” he said.

“So we’re trying to stay away from things like upgrading loader tractors, balers, haybines — that sort of thing — and looking at other options.”

With feed being the biggest expense on his operation, extra hay turned out to be a good investment for English over the winter and spring.

Producers in Manitoba have had recent experience with the feed scramble during drought years such as 2021.

“We’ve gone out and secured a lot of winter feed, enough for two or three years worth, and we can really utilize that in a fashion in our feeding system. We’ll bale-graze cows — it takes really minimal labour and and we’ve kind of locked in a feed source at a very low cost for many years to come,” he said.

English doesn’t bother speculating much on how long high cattle prices are going to last. They’re outside of his control, he said.

What producers do have control over, he said, is purchasing livestock price insurance policies to set price floors for their cattle.

The business risk management program is meant to protect producers from price volatility and is enjoying a moment in the sun, given potential volatility from tariffs. At the same time, many producers have historically considered the non-cost shared program prohibitively expensive.

Past that, the producer has sold some cows and plans to sell a set of cow-calf pairs he considers “way overvalued” at this point in time.

“I think there’s lots of opportunity for moving out high-valued animals right now. Bred cows or cow-calf pairs seem to be very, very high-value, probably much higher than they have ever been.”

Government funding and lending programs can also be an indicator of what beef producers are buying. Dave Gallant is vice-president of finance and Advance Payment Program (APP) operations for the Canadian Canola Growers Association, the largest administrator of the federal loan guarantee program.

APP offers farmers up to $1 million in advances per year with the first $250,000 interest-free. Despite its canola ties, the association administers the full spectrum of the program, including beef cattle applicants.

Emphasizing the small sample size from a limited time frame of the 2025 APP season, Gallant said beef applications as of May 20 saw “50 per cent more applications for about 50 per cent more money,” compared to the same day in 2024.

General feedback — much of it anecdotal — suggests a number of beef producers are actually using funds to expand and rebuild their herds, said Gallant.

“The vast majorities are looking to either expand their herd or buying breeding stock, whereas in prior years, a lot of our conversations with the cattle producers mostly hung around feeding those cattle with the funds that they were borrowing.”

Gallant said that payback among beef cattle borrowers is happening at “a normal pace.”

Most aren’t rushing to pay back their loans before deadline to avoid extra interest.

“Farmers are paying off their advances about normal relative to any other prior years, so we’re not seeing any rapid repayments of advances simply because prices are higher for cattle,” he said.

Beef-related applications to another APP administrator group — the Manitoba Livestock Cash Advance program — are also coming in at higher numbers, said chair Mark Good. He credits it, in part, to heavier marketing of APP in 2024.

Good suggested that beef producers are using cash advances to pay down lines of credit to avoid rising interest. Equipment updates, dugouts and fencing are also high on the list, particularly with the incentives available through provincial beneficial management practice programming — cost-shared projects that the province links to sustainability.

Good, who is a beef producer himself, plans to submit his own Manitoba Livestock Cash Advance application in the near future.

He added that he has used extra revenue from cattle sales to buy a new aluminum stock trailer, in advance of U.S. tariffs on steel and aluminum.

“I got a little spooked when the Americans talked about putting 25 per cent tariffs on aluminum,” he said.

“I could barely afford it now, but I can’t afford it if the tariffs go on and the price goes up.”

In central Alberta, Simmental based steers weighing 900 pounds on barley and silage diet with full processing data were valued at $405/cwt fob farm. In east central Alberta, black wide frame Limousin based steers averaging 825 pounds supposedly sold for $460/cwt.

The Killarney market report in Manitoba had red heifers weighing just under 900 pounds selling for $391/cwt. At the Ste Rose sale, a smaller package of red heifers with a mean weight of 795 pounds were marked at $425/cwt.

The Ponoka market report had a handful of red mixed steers evaluated at 709 pounds on hay and silage diet with full preconditioning data moving through the ring at $500/cwt. At the same sale, tan heifers scaled at 700 pounds on a diet of silage and pellets with full processing data dropped the gavel at $486/cwt.

At the Westlock sale, a smaller package of Angus Simmental cross 650 pound heifers on hay and barley diet with full processing records sold for $467/cwt. At the Ste Rose sale, the market report had black heifers averaging 616 pounds trading for $512/cwt.  In the Calgary region, a smaller package of Charolais weaned steers weighing just over 600 pounds were quoted at $573/cwt.

The Ste Rose Auction market report had Charolais steers averaging 555 pounds moving through the ring at $610/cwt. A buyer in central Alberta reported that Angus cross weaned heifers on the card at 560 pounds sold for $530.

The USDA estimated U.S. fourth quarter beef production at 6.650 billion pounds, down from the 2024 final quarter output of 6.882 billion pounds. If the U.S. border stays closed to Mexican feeders for an extended period, U.S. fourth quarter beef production forecasts would likely drop to 6.400 billion pounds. This would drive the December live cattle futures higher and support the yearling market during July and August.

Prices fluctuated at times in 2024 but moved overall higher as the year progressed.

Brenna Grant, executive director at Canfax, said demand has remained steady and producers have benefitted. Cow-calf producers have had the leverage at this point in the cattle cycle.

“Alberta steer calf prices have rallied 25 per cent, or $500 per head, between January and December,” she said.

“Alberta fed steer prices have rallied 16 per cent.”

Grant said these are new record high prices nominally.

“But really, over the last 25 years, the beef industry has really struggled to just keep up with inflation,” she said.

Ten years ago the industry caught up to inflation and then dropped back again.

Cow prices in 2024 have been just barely keeping up to inflation, but fed cattle prices are still lagging behind, she said.

“It means that we are expecting further price increases,” Grant said.

Some of the price volatility occurred because production didn’t decline as much as originally expected. Carcass weights in North America remained high.

“What really has supported these prices is the fact that we’ve continued to see really strong retail beef demand,” she said.

Demand was steady through the year both domestically and internationally, even in the face of rising consumer prices.

Grant said it’s important to remember an additional 2.4 million people have come to Canada in the last two years.

“Research indicates that immigrants often experience dietary changes after relocating, and it’s known as dietary acculturation. The process involves retention of that traditional dietary behaviour while incorporating new foods and eating habits,” she said.

While they might not be eating as much beef as other Canadians, they are adding it to their diets.

The smaller calf crop during the fall run also supported price competitiveness.

Cattle herds peaked in both Canada and the United States in 2020, before the drought. May rains helped stem cow marketing, and year-to-date cow slaughter is down 20 per cent, Grant said.

Slower cow marketing is the first step to stopping liquidation, she said, but keeping them puts producers into a consolidation phase.

Historically, in a 10- to 12-year cattle cycle, there are three years of consolidation before expansion.

“We’re seeing interest by cow-calf producers to retain heifers. They’re definitely getting the price signal to do that, but this really comes down to weather and if they have rain to retain those heifers,” Grant said.

She also said some of the economic and political uncertainty in the United States is affecting beef markets, particularly the strikes at east coast ports.

Resolution of those work disputes in the fall was delayed into January and could still cause problems. Port strikes, rail strikes and other events that disrupt supply chains create volatility.

The threat of 25 per cent tariffs on Canadian goods into the U.S. by president-elect Donald Trump is still uncertain, but all sectors are waiting and watching.

The U.S. Department of Agriculture predicts higher prices on lower expected slaughter.

A December report said the discovery of new world screwworm in cattle from Mexico and the subsequent import ban will limit available slaughter cattle into the second quarter of 2025.

As a result, 2025 beef production is forecast 615 million pounds lower at 25.7 billion lb.

The USDA said slaughter prices are expected to increase more than two per cent year over year, while feeder steers should increase eight per cent.

In Canada in 2025, Grant said the main thing to remember is that cattle numbers are tightening.

“That trend is going to continue into 2025, and those tighter supplies are going to be supportive to prices, but we can absolutely expect volatility as the markets react to any news around consumer demand and/or any political announcements,” she said.