Meat prices have been one of the contributors to higher overall inflation in Canada. Consumer beef prices have increased almost 13 per cent and pork prices almost 17 per cent in one year.
We expect these rapid increases from last year’s retail prices to continue into the fall. Cattle and hog futures markets suggest sustained strong prices for producers and high costs for processors that are passed onto consumers.
Hog prices are expected to soften as the impact of PEDv on hog supplies slowly fades. This should lower the inflation rate for pork into winter, as should the end of grilling season.
Inflation for beef may not slow much until January 2015, one full year after retail beef prices started their rapid ascent.Continuing tight beef supplies should support prices throughout the supply chain, including at the retail level.
Meat will continue to contribute to a higher inflation rate in Canada over the next six months. Following that period, the rate of inflation will likely be lowered, as further increases in producer prices are not likely.
James Bryan, Senior Agricultural Economist