Have you noticed the price of meat lately? Mirella and Frank DiGenova certainly have — they sell the stuff. And experts say high meat prices are likely going to get worse before they get better.
Mirella DiGenova is the owner of Butcher By Nature, a family-run food shop in Toronto specializing in organic and naturally raised meats. She says the high cost of meat is cutting into her profits.
"It affects me because I have to sell it and there is just so much I can mark up my meat. I mean, I don't want to scare away my customers," DiGenova says.
Beef prices up 17% in Canada
Bacon packages shrink as pork prices soar
In fact, the high grocery shelf prices for meat don't reflect the true magnitude of the price increases seen for livestock in recent months.
"We have the monthly data back to 1998," says Scotiabank's senior commodities expert and vice-president of economics, Patricia Mohr. "There's nothing anywhere near that high."
Like many meat retailers big and small, record-high prices have forced DiGenova to try to swallow part of the increase. She's been cutting her own profit margin to avoid losing sales. That's especially difficult in the organic food sector, where prices are already about 30 per cent higher than for non-organic fare.
It is not just organic retailers that are suffering. According to Mohr, livestock prices have stayed too high for too long — butchers and grocery store owners can no longer continue to hold retail prices down. And that means consumers will soon be feeling the pinch.
"This year cattle prices have moved up to record highs on both sides of the border and it's starting to impact meat prices at the grocery store," says Mohr.
There has been about a six month period where "stores were not passing along higher prices of the basic cattle to consumers because, of course, of the negative impact on consumer demand," says Mohr, echoing DiGenova. "But the industry has reached the point where higher cattle prices have to be passed along."
Click here to see more...