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.”

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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

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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.

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In central Alberta, larger frame Simmental cross steers carrying lighter butter on light grain and silage diet with full processing data averaging 900 pounds traded for $375. In the same region, medium to larger frame, black mixed heifers weighing 865 pounds with some fleshier types included, supposedly traded for $340.

North of Saskatoon, mixed steers carrying medium flesh levels weighing 875 pounds coming off backgrounding grain diet with full processing records supposedly traded for $377 fob farm. At the St Rose Auction in Manitoba, the market report had Charolais steers weighing 846 pounds selling for $385.

East of Edmonton, a small package of Angus blended heifers carrying medium flesh averaging 800 pounds sold for $355. South of Edmonton, black, wide frame Limousin based heifers evaluated at 800 pounds with lower flesh levels were last bid at $367.

Southeast of Calgary, Charolais cross steers weighing 680 pounds apparently traded for $455. At the Ponoka sale on March 12, red mixed steers with a mean weight just under 600 pounds notched the board at $506. North of Calgary, red mixed heifers averaging 630 pounds supposedly settled at $431.

At the Lloydminster sale, a smaller package of black steers weighing 516 pounds silenced the crowd at $571. In southern Manitoba, a smaller package of black mixed steers weighing 507 pounds reportedly moved through the ring at $505. Northwest of Winnipeg, red mixed steers weighing 460 pounds apparently dropped the gavel at $582.

Alberta packers were buying fed cattle on a dressed basis in the range of $450-$455/cwt delivered, up $5-$20/cwt from the week ending March 8. Feeding margins continue to hover in positive territory which is supportive for the feeder complex. In the short-term, feedlot operators have a bullish outlook for fed cattle. This is barring no U.S. tariffs of course.

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In Central Alberta, a smaller group of light butter, larger frame, mixed steers averaging 955 pounds on silage/protein supplement diet with full processing data sold for $311. In the same region,  a smaller package of fleshier 925-pound mixed, medium frame, red heifers sold for $294. North of Red Deer, a smaller group of thinner, large frame Angus blended heifers weighing 810 pounds dropped the gavel at $329. In North-Central Saskatchewan, medium to larger frame, lower flesh Charolais steers averaging 815 pounds were valued at $358.

In Central Saskatchewan, large-wide frame Limousin blended steers and on grass and hay diet weighing 710 pounds were last bid at $403. South of Edmonton, medium to larger frame, thin, tan mixed heifers around 705 pounds apparently traded for $340.

The market for lighter calves was extremely variable across the prairies. In Central Alberta, weaned Simmental mixed steers on grass and hay diet with full processing data averaging 655 pounds supposedly traded for $456. In Central Saskatchewan, a smaller package of 620 pound mixed steers reportedly sold for $432. In Central Alberta, medium wide frame red Angus blended heifer calves on hay and forage diet scaled at 655 pounds apparently notched the board at $390.

In Central Alberta, a handful to tan weaned 520-pound steers charted course at $480. In Central Saskatchewan, a smaller package of mixed 530-pound steers were valued at $438. In the Calgary region, a handful of mixed weaned heifers weighing 585 were valued at $394 and weaned black heifers around 510 pounds reportedly sold for $398.

Finishing and backgrounding operations are factoring in a $15-$20 jump in feeder cattle prices between now and August. When there is a quality package available, buyers are not afraid to bid the market to fresh record highs. It’s a very unique period in the cattle cycle.

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The last week of October is the busiest for the fall stocker calf run in Ontario, with sales at many auction barns across the province.

At the Keady Livestock Market in Grey County, the Bluewater Black Calf sale brought prices about $700 more per calf than a year ago, according to market owner Scott Kuhl.

Why it matters: There have been few market signals to increase the Ontario cow herd. This fall’s calf prices may be the first encouraging sign in years.

Kuhl auctioned about 800 calves Oct. 26, mostly Angus-influenced of varied sizes and quality. Lots ranged from 20 head down to single animals. Top prices for the vaccinated calf sale were around $4.75 per pound for a group of calves averaging 474 lb.

Other sales in Ontario have had similar results. Some lighter calves are appearing at sales, echoing a trend across the country as producers take advantage of strong prices by sending animals to town early.

“We’re seeing western producers sweeping the pastures,” says Rick Wright, chief executive officer of the Livestock Markets Association of Canada and a cattle buyer with JGL Livestock in Manitoba. He says calves are going to auction whether they’re 300 lb. or 700 lb.

“We’ve seen $5 per pound for some peewee calves and we’ve never seen that before.”

The number of beef cows on farms in Canada has declined by about 182,000 from 2019 to 2023, according to Statistics Canada. It’s part of a longer-term decline in most areas of the country.

“This thing (strong prices) should last three, four, five years before we see rebuilding of the cow herd,” says Wright.

It takes two and a half to three years to take a heifer, held back in a sale today, and have her yield a return, said Carl Spencer, as he stood outside the Keady Livestock sale. That biological reality prevents quick expansion.

There is also significant competition in the main cow-calf-raising areas of the province.

“In our country here and in Ontario, the cash croppers have had a real good run,” said Spencer. “So they’re still plowing land that maybe they shouldn’t even be plowed. They come in and they tile it and then it makes it good cash crop ground, but now it’s no longer pasture land for cattle or hay ground even.

“Our problem here in Ontario is to find land at a reasonable price to run cattle on pasture and grow hay, so that makes it tough for a young fella to decide to go into cattle.”

Spencer has sons who farm with him, but says cow herd expansion depends on finding enough pasture in his area near Tara for that to make sense.

There are strong prices for any sort of beef animal, including cows, so for cow-calf producers nearing retirement age, the time may be right to reduce or disperse the herd, further reducing the domestic herd.

The price of land in Ontario has also made it more difficult for beef farmers to find pasture for cattle.

“I can’t see the cow numbers going up again,” said Kuhl, citing the age of farmers and land competition in Ontario.

The uneasy balance in the beef production chain often means one level of producer is making money while another is not, but this appears to be a rare time when backgrounders and finishers are still making money.

“This was definitely needed for cow-calf producers, to compete with row crops,” says Jack Chaffe, president of the Beef Farmers of Ontario, and a feedlot operator near Mitchell.

“This incentivizes them to put more calves on the ground. We needed this jump.”

Canadian cattle producers missed out on an increase in the value of calves in 2003-04 in the U.S. when Canada was hit by BSE and borders closed, says Chaffe. Another jump in prices in 2014 was short-lived.

Margins will be tighter for feedlot operators, but “as a feedlot producer, I can’t say this is bad. If we don’t have calves on the ground, we don’t have calves for the feedlot.”

Shrinking cow herds have tightened the market enough that Canada, which five years ago exported calves to the U.S., is now an importer.

“For years, cattle moved north to south, but we’ve been a net importer for three years in a row,” says Wright.

Cattle from Montana are moving into Alberta, and cattle from Missouri and Kentucky are moving into feedlots in Ontario, in the London area and Grey and Bruce counties, he says.

In Western Canada, lack of feed in drought-affected areas has brought more calves to auctions. Producers there also say land competition prevents expansion.

Chad Ross, vice-chair of the Saskatchewan Cattlemen’s Association and an Estevan, Sask. beef producer, has implemented more intensive grazing to run more cows on less land, as he tries to compete with neighbours turning long-time tame pasture grass into canola, wheat or pulse land.

Similarly, Spencer says he is growing more corn for silage as a way to intensify the nutrients produced.

“We’re growing a lot of corn silage to help feed because the hay ground that we used to be able to go and buy standing hay on, it long ago was plowed up.”

The route to more beef cows in Canada has many barriers, some of them entrenched, but multiple years of record prices could bring more cows and calves back to the land.

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In central Alberta, larger-frame lower-flesh steers on silage diet with full health records averaging 940 lbs. sold for $294. In the same region, medium- to larger-frame, light-butter mixed heifers averaging 945 lbs. on forage diet with full processing data were last bid at $255. North of Calgary, tan steers on forage diet with known processing records averaging 881 lbs. silenced the crowd at the psychological level of $300.

Near Lethbridge, black steers off grass weighing 765 lbs. were quoted at $331. Southeast of Calgary, Charolais-blended heifers averaging 770 lbs. were valued at $292.

South of Edmonton, mixed weaned steers on the board at 690 lbs. notched the charts at $340 and mixed heifers averaging 650 lbs. were stopped at $320. In the same region, Charolais-based weaned steers with a reported scale weight of 605 lbs. reached up to $382. Again, these are values for top-quality cattle; stragglers and small groups of various sorts were discounted accordingly. Feedlots don’t want to contend with off-grade cattle.

Alberta packers were buying fed cattle on a dressed basis at an average prices of $406/cwt delivered this past week. This was down from the June 22 high of $415/cwt. Wholesale beef prices have softened; however, beef demand remains strong due to job growth and the year-over-year increase in wages. Inflation and energy prices are down from year-ago levels, providing the consumer with additional buying power.

— Jerry Klassen is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339 or via his website at ResilCapital.com.

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This past week, finishing feedlots were once again aggressive on all weight categories. Ontario demand was noted on feeders in Manitoba and eastern Saskatchewan, with a premium lean on Limousin and Charolais blends. Despite the softer tone in deferred live cattle futures, the nearby feeder market didn’t miss a beat. Fleshier types were discounted but even these cattle were well bid. Overall volumes are declining in line with the seasonal tendency. The lower supplies contributed to the stronger tone.

In central Alberta, Angus-blended lower-flesh steers on light grain ration with full health data averaging 842 lbs. were quoted at $270. North of Calgary, a smaller group of fleshier Simmental blends weighing 840 lbs. were bid up to $256. Northwest of Winnipeg, larger-frame lower-flesh Charolais scaled at 855 lbs. dropped the gavel at $286. At the same sale, black Limousin mixed thinner steers weighing just under 785 lbs. charted fresh waters $294. In central Alberta, mixed steers scaled at 775 lbs. on silage diet traded hands at $268.

In southern Manitoba red mixed 735-lb. steers sold for $308; south of Edmonton, tan steers with a 715-lb. ticket were last quoted at $321.

Near Lethbridge, Angus heifers averaging 615 lbs. sold for $300; southeast of Calgary, tan steers weighing 640 lbs. were valued at $325. East of Saskatoon, Charolais-based steers weighing a shade over 500 lbs. watered eyes selling at $370 and similar-quality and -weight heifers silenced the crowed at $340.

A larger portion of Alberta has received less than 40 per cent of normal precipitation. Pastures are in poor condition. Smoky conditions in central Alberta may have set a negative tone for the market last week. Approximately 45 per cent of the Canadian calves born are in Alberta. This is a serious blow to the industry and may result in an abnormal marketing schedule for a large portion of feeder cattle.

— Jerry Klassen is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339 or via his website at ResilCapital.com.

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In central Alberta, larger-frame low-flesh mixed steers on silage diet (no grain) with full health records weighing 905 lbs. sold for $255. In southern Alberta, Simmental-based steers reported at 825 lbs. on light grain diet with controlled weight gain with full health data traded hands at $270. In the same region, larger-frame red mixed steers carrying a double layer of butter with unknown weight gains averaging 810 lbs. charted the board at $252. Northwest of Winnipeg, larger-frame low lean flesh red mixed steers weighing 820 lbs. went into the record books at $292.

In central Saskatchewan, Charolais-based steers at 700 lbs. were valued at $309; south of Edmonton, larger-frame medium-flesh Angus heifers reported at 690 lbs. were bid up to $282. North of Calgary, larger wide-frame, lean tan steers weighing 635 lbs. notched the charts at $343 and Angus-blended heifers with a scale report of 630 lbs. were pronounced sold at $305.

In Manitoba, a handful of black steers assessed at 560 lbs. loaded on the truck at $346. In southwestern Saskatchewan, medium- to larger-frame semi-weaned steers weighing 515 lbs. silenced the crowd at $362. Southeast of Calgary, Limousin mixed heifers averaging 511 lbs. were purchased for $330.

Alberta packers were buying fed cattle on a dressed basis in the range of $380-$382/cwt delivered, steady to $2/cwt higher than last week’s range of $378-$380. Using a 60 per cent grading, live prices would equate to $228-$229 delivered. Break-even pen closeouts are around $220. Statistics Canada’s four-month-old acreage survey had barley acres at 7.085 million, up only 40,000 acres from last year. Traders are expecting barley acres to come in at 7.5 million on the June survey. Lethbridge feedlot operators are expecting barley to drop below $300/tonne during harvest. This is $120/tonne below current levels.

— Jerry Klassen is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339 or via his website at ResilCapital.com.

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Feedlot margins are hovering in the range of $30-$60/head, which appears to have renewed buying interest from the finishing operator. Secondly, the feeder market continues to factor in barley prices sub-$300/tonne in southern Alberta during the fall. This has been the main driver of feeders under 700 lbs. Feedlot operators have been liquidating larger volumes of fed cattle over the past month and there is significant open demand. One month from now, feeder volumes will become scarce; the premium quality cattle will have moved through the pipeline. Therefore, waiting is not an option. The winter storm in Manitoba and eastern Saskatchewan caused the cancellation of sales or limited volumes at some auction barns.

In central Alberta, larger-frame Simmental cross steers with very light butter on silage diet with full health records and age verification averaging 860 lbs. dropped the gavel at $266. In the same region, Charolais-based steers carrying medium to lower flesh on light barley diet with full health and age data crossed the scale at 805 lbs. and notched the chart at $284.

In southern Alberta, medium to larger Angus cross heifers on corn silage diet with full health and age data averaging 860 lbs. sold for $252. In the Lethbridge area, a larger group of 800-lb. low-flesh Angus steers startled the crowd by selling for $298.

North of Calgary, Charolais-based steers with lower butter weighing 720 lbs. traded at $315 and similar-quality heifers averaging 705 lbs. sold for $284. South of Edmonton, tan weaned larger-frame steers weighing 620 lbs. charted course at $336; in central Saskatchewan, a handful of silver-coloured steers weighing 670 lbs. sold for $318. Near Lethbridge, Angus-based heifers weighing 600 lbs. dropped the gavel at $302.

In central Saskatchewan, a smaller group of tan steers weighing 540 lbs. stopped bids at $351 and red white-face heifers weighing 525 lbs. sold for $303. In central Alberta, mixed steers weighing 515 lbs. were valued at $360 and mixed steers averaging 430 lbs. were quoted at $377.

Good-quality cow-calf pairs are now trading in the range of $3,500-$3,800. The function of the feeder market is to encourage expansion and feeder cattle futures continue to percolate higher. Feeders are being committed for fall delivery and we’re now at the stage where sellers are backing away from the market. Backgrounders and cow-calf producers are in the mindset to wait a couple of weeks before committing to additional sales.

— Jerry Klassen is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339 or via his website at ResilCapital.com.

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