Statistics Canada recently reported per capita beef consumption fell 7.7 per cent in 2015 to 17.8 kilograms which is the largest annual drop since 1979.
However per capita expenditures for beef rose 5.6 per cent to $234 in 2015 as prices ballooned 14 per cent.
“Demand is a function of consumption levels but also the prices consumers pay for the beef,” says Canfax’s senior market analyst, Brian Perillat. “So although they consumed less, they were willing to pay substantially more.”
That’s been the trend over the last five years as domestic per capita consumption fell 11 per cent but consumer spending increased 24 per cent in that period, says a Canfax report.
Canfax tied 2015’s lower consumption to a 6.2 per cent reduction in available beef supplies for domestic consumption, which was a product of lower production and imports and higher exports.
“We had less beef around in Canada last year, but overall demand is stronger due to the high prices,” Perillat says. “We’ve got some of the best beef demand we’ve had in 25-plus years if you look at both consumption [and] how high the prices are.”
The report adds 2015 Canadian beef exports were up one per cent in volumes but a whopping 15 per cent in value. Statistics Canada reports Canadian beef exports were valued at $2.23 billion in 2015 versus $1.94 billion the year before.
Those high 2015 prices, though, have come and gone. But with more beef supplies coming to the market and retail prices to decline, per capita consumption in Canada could go up in 2016, Perillat says.
“Definitely in the United States they’re looking at more beef, but we potentially could have more beef production as well. We haven’t exported as many cattle, so there’s more cattle here in Canada. And we’re harvesting more weight per animal.”
Although beef continued to account for the largest share of Canada’s total red meat and chicken expenditures in 2015 – 41.3 per cent – it has been losing market share to those competing meats. And more beef supplies and lower retail prices in 2016 will be met with a lot of cheap pork and poultry supplies.
The combination of all three, though, may result in overall meat consumption in Canada increasing in 2016, Perillat says.
Source: Meatbusiness