Canadian beef market update: US to import more beef in 2022

Canadian beef exports to the United States have been strong in the first two months of this year, up 13% from February 2021 and 25% from the five-year average in February.

From January to February 2022, imports of Canadian flanks/mains and ribs grew the most, up 24% in volume year over year. Beef brisket volumes increased by 21%, as well as loin (+20%) and offal (+10%) volumes.

Chuck and other category volumes increased 8% each. The value of imports from January to February also jumped, with the value of beef brisket nearly doubling year-over-year (+94%). Flank/plate values ​​increased by 74%, with loin (+57%), rib (+47%), hip (+35%), chuck (+33%) and offal (+15%). also values.

The other categories increased by 43% in value. Canadian premium and AAA production as a percentage of all Grade A was 80% in the first quarter of 2022, compared to 75% in the first quarter of 2021 and 70% for the five-year average in the first quarter, supporting the availability of beef from high quality for the grilling season.

Total US beef imports in February 2022 increased by 40% compared to February 2021. Volumes increased from New Zealand (+8%), Canada (+13%), Mexico (+36%) , Australia (+44%). ), Argentina (+92%) and Brazil (+336%), with lower volumes than Uruguay (-39%).

Value, Volume, Price and Market Share % of U.S. Beef Imports from Top Suppliers (February 2022, YTD)

In March, Brazil fulfilled its US import quota shared with Ireland, Nicaragua, Costa Rica, Chile and Japan. These exporters will now face a 26.4% tariff, which will likely have the biggest impact on Japanese Wagyu steak prices.

Beef ratios improve, support retail demand

The relative price ratios between beef and pork and beef and chicken decreased from February to March 2022, even though the retail price of fresh beef increased by 1.2% to US$7.36/ lbs (US$16.23/kg). The beef-pork ratio at 1.78 in March 2022 was down slightly from February, but stable with the five-year trend. The beef-to-chicken ratio of 3.18 in March 2022 was down slightly from February and slightly below the five-year trend.

Lower ratios favor beef consumption. Higher prices for all proteins are supported by strong demand and inflation. Buying less meat and/or substituting between species and cuts are typical reactions to high prices; these are undoubtedly solutions for some American consumers.

However, supply chain disruptions are affecting all groceries and limiting consumer options everywhere. The main savings strategies for consumers are to look for promotions, to buy overnight and/or to buy in bulk. These behaviors could foster greater volatility in beef prices this year, leading to exaggerated seasonal price peaks and troughs.

Restaurant owners anticipate continued shortages

Restaurant performance improved 0.5% from January to 103.8 in February, according to the Composite Restaurant Performance Index. The index rose on higher same-store sales, traffic and spending, but restaurant owners’ future expectations fell for the second month in a row.

The 2022 State of the Restaurant Industry Report said most restaurateurs expect it will be another year before business conditions return to normal. Almost all (96%) experienced supply issues in 2021 and these are expected to persist through 2022. Eighty percent of operators have switched menus due to shortages.

The pandemic has also transformed the restaurant industry in other ways. Eighty percent of operators say using technology provides a competitive advantage. The use of technology in takeout and delivery services is essential (according to 25% of consumers and 72% of millennials). As a result, a quarter of restaurants surveyed plan to expand these services.

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