The boom market for beef is fading in Canada after record prices last year, but people will have to wait for costs to tumble in grocery stores.

The cattle industry has experienced a sudden drop in prices, forcing ranchers to adjust their expectations for the year.

"We had an incredible run. We doubled our prices in three years for calves, for example," said Brian Perillat, a senior analyst with CanFax, a cattle market research firm. "In the last few months, we've seen prices drop 15 to 20 per cent from the high."

Even with the market correction, prices are still at historically high levels. Experts say the price spike was too extreme a reaction as beef supplies tightened.

"It's a commodity market. We see big booms and busts with oil and we went through one with cattle," said Perillat.

Price lag in stores

Steaks, roasts and other cuts of beef are still fetching a premium price in the meat department of grocery stores, although that should change. Usually it takes three to six months before changes to cattle prices affect retail prices.

The skyrocketing prices proved to be a double-edged sword for the industry. While profits increased, some grocery store customers reacted to the sticker shock.

If we want to sell more beef, we need to make it easy for the consumer. – Gary Haley, Vantage Foods

A snapshot of how grocery store prices have changed in the last five years. At the retail level, the average price for one kilogram of round steak was $19.32 in October and fell to $18.64 by December. Ground beef was $13.23 and dropped to $12.80 over the same period, according to Statistics Canada.

Eating habits

Despite recent financial success, the beef industry faces several challenges as it loses market share in the country, while trying to adapt to a change in eating habits by Canadians.

The hefty prices for beef, and meat in general, have more and more people looking to buy other sources of protein such as eggs, tuna and beans. At the same time, consumers increasingly want food that is healthy, tasty and quick to make.

"The way consumers are eating meat is changing. Centre of the plate usage is declining. Meat as an ingredient is increasing," said Gary Haley with Vantage Foods, a Calgary-based food processor.

Haley spoke Thursday at the Alberta Beef Industry Conference in Red Deer, Alta.

In particular, the younger generation is a puzzle the industry is trying to solve.

"These pesky millennials are a bit of a challenge, because the only meat that really resonates with them in consumer research is chicken," Haley told the crowd of 300 people. "They can't cook, they don't want to cook and we need to figure out how we can supply this young group."

The desire for versatile, low-cost and quickly prepared meals explains why ground beef outsells all other cuts of beef.

Per capita beef consumption dropped in Canada by 12 per cent from 2003 to 2012, according to Statistics Canada.

The price of meat is the biggest deciding factor for people in grocery stores. The recent "phenomenal" spike in beef prices has turned away some consumers.

"We work in a commodity market and it's cyclical. In the last couple of years, prices have been higher, but that will ultimately change and normalize in the future," said Haley in an interview.

Many questions

Other challenges for the beef industry include increased demands for transparency and sustainability. Questions about animal welfare and processing are becoming more prevalent and influencing how some people buy meat.

The cattle industry is losing market share as pork and chicken consumption increases. (Kyle Bakx/CBC) Traditionally, beef was the top-selling meat in Canada, but that's changed in the last decade, said Haley. Chicken is now the popular choice, Haley suggests, because it is a cheaper source of protein and it's perceived to be healthier than beef.

"If we want to sell more beef, we need to make it easy for the consumer. We need to make it interesting. We need to enhance flavour profiles. We need to demonstrate how to cook it and those types of things."

The sector also needs to keep pace with the trend of smaller packages of meat and more value-added products.

"I don't think we can stay where we are, because the times are a changing," he said.

In Canada, beef production keeps falling, although experts suggest that could change in 2016.

While the industry has seen the number of cattle decrease over the last decade, the size of cattle keeps climbing. In 1975, the average carcass weight was just above 270 kilograms, while in 2014 the weight was over 400 kilograms, according to CanFax.