What Causes Food Price Increases - Beef and Anchovy Biology is a Factor in Supply

One of the most common questions I get is why certain foods suddenly become expensive. Consumers often assume the answer is somewhere in the grocery store. They think retailers raised prices, processors increased margins, or suppliers decided to charge more. Sometimes those explanations play a role. More often, however, the story starts much earlier.

Food production is different from most industries because it depends on biology. Crops need to grow. Fish populations need to reproduce. Animals need to mature. When disruptions occur, the consequences can last for years. Unlike a manufacturing plant, food production cannot simply add another shift and increase output next week.

Two current examples illustrate this reality particularly well: anchovies and beef.

Freshly caught anchovies

The Hidden Foundation of Seafood Production and How It Causes Food Price Increases

Most consumers think of seafood as something that comes from either a fishing boat or a fish farm. Few think much about what happens before farmed fish reach the market. Modern aquaculture depends on feed, and feed depends on a reliable supply of nutrients. That is where anchovies become important.

Peru's anchovy fishery is one of the most important fisheries in the world. While only a small proportion of consumers buy anchovies directly, enormous quantities are processed into fishmeal and fish oil. These ingredients become building blocks for aquaculture feeds used to raise salmon, trout, shrimp and other species consumed around the world.

In many ways, anchovies occupy a role similar to corn and soybeans in terrestrial livestock production. Most consumers never see them directly, but they are foundational inputs into the food system. The challenge is that fishmeal and fish oil are difficult to replace completely.

Feed companies have become increasingly innovative over the past two decades. They have incorporated plant proteins, algae-based ingredients, rendered animal proteins, insect meals and other alternatives. These developments have reduced dependence on marine ingredients and improved sustainability. Yet there remains a reason fishmeal and fish oil continue to command premium prices.

From a nutritional perspective, they provide a unique package of highly digestible protein, essential amino acids and omega-3 fatty acids. Economists would describe the situation as one where substitutes exist but are imperfect. You can replace some fishmeal and fish oil, but not all of it, without affecting performance, nutritional quality, or the omega-3 levels that consumers expect from seafood products. That is particularly important because omega-3 fatty acids are one of the major reasons consumers choose fish in the first place. If producers substantially reduce omega-3 content, they risk undermining one of seafood's most important nutritional advantages.

This is why developments in Peru matter globally. A reduction in anchovy harvests can ripple through feed markets, aquaculture production, and eventually seafood prices. Consumers shopping for salmon in Ontario may have little idea that a fishery thousands of kilometres away is influencing what they pay. Yet that is exactly how modern food systems operate.

Aquaculture's Growing Importance

The anchovy story is also important because of how much the seafood sector has changed. Many consumers still picture seafood as something harvested entirely from wild fisheries. That simply is not the case anymore. As much as seventy percent of the seafood products many Canadians encounter at retail are farmed. Salmon, shrimp, tilapia, trout and many other commonly consumed species increasingly come from aquaculture systems rather than wild capture fisheries. This shift occurred because demand grew faster than the ability of wild fisheries to sustainably supply it. Global seafood consumption has increased dramatically over the past several decades while many wild fisheries have reached biological limits. Aquaculture stepped in to bridge that gap.

The result is that seafood is increasingly linked to feed markets much like poultry, pork and beef. When feed ingredient prices increase, those costs eventually move through the supply chain. The connection is simply less visible because few consumers realize how integrated these systems have become.

Beef cows on pasture

Beef's Long Biological Cycle

If the anchovy story highlights a feed problem, beef highlights a production problem. Consumers continue to notice unusually high beef prices and often ask why they have remained elevated for so long. The answer begins with drought.

During the dry years of the early 2020s, many cattle producers faced difficult decisions. Pastures produced less forage. Hay supplies tightened. Feed costs increased. In many regions, producers reduced herd sizes because keeping breeding cattle simply became too expensive. At the time, those decisions helped operations survive. The long-term consequence, however, was a smaller breeding herd.

This is where biology becomes critically important. Beef production operates on timelines measured in years rather than months. A producer cannot immediately rebuild a herd when conditions improve. If a rancher decides to keep an additional heifer today, that animal must mature, breed, calve, and raise offspring before meaningful increases in beef production occur. The process takes years. This creates what economists often describe as the cattle cycle. Periods of expansion and contraction occur because biological constraints prevent rapid adjustments in supply.

The industry is beginning to see signs of rebuilding. Cow numbers have stabilized and there are some signs of growth in the herd. Retained breeding females have increased. Those are encouraging indicators for future production. Unfortunately for consumers hoping for immediate relief at the meat counter, future is the key word. The fact that rebuilding has begun does not mean beef supplies will increase substantially tomorrow. It means supplies may increase over several years. That distinction matters.

Biology Doesn't Respond to Quarterly Targets

What Causes Food Price Increases - Beef and Anchovy Biology is a Factor in Supply

Anchovies and beef may appear unrelated, but both illustrate the same fundamental reality. Food systems operate according to biological timelines, not quarterly earnings targets. When fishery scientists observe risks to future anchovy stocks, quotas are reduced to protect long-term sustainability. The consequences may affect feed supplies for years. When drought forces cattle producers to reduce breeding herds, rebuilding may take several production cycles before consumers see the benefits. In both cases, the market is responding to biological realities rather than business preferences.

That is often difficult for consumers to see because we encounter food only at the end of the supply chain. We experience the result as a higher price, lower availability, or a change in product selection. What we do not see are the environmental conditions, production decisions, scientific assessments, and biological constraints that set those outcomes in motion years earlier.

The next time beef, salmon, or fish oil supplements seem unusually expensive, the answer probably will not be found on the grocery shelf. It may be found in a Peruvian anchovy fishery, a drought-stricken pasture, or a breeding decision made several years ago.

Food prices tell stories. What Causes Food Price Increases - Beef and Anchovy Biology is a Factor in Supply.

Sometimes those stories begin with a tiny fish.

Sometimes they begin with a cow.

But almost always, they begin with biology.

Recommended citation format: von Massow, M, "We Notice Food Prices. We Don't Always Notice What Causes Them." Food Focus Guelph (147) , Department of Food, Agricultural and Resource Economics, University of Guelph, July 15, 2026.

Keywords: seafood, beef, anchovy, food, supply chain, aquaculture