Steakhouse operators face rising beef costs

Nation's Restaurant News, June 23, 2003

CHICAGO -- Steakhouse operators are facing more expensive prices for beef, especially Prime-grade products, compounding already high prices caused by increased demand for U.S. beef following the discovery of mad-cow disease in Canada. The U.S. Department of Agriculture predicted early in the year that prices could reach record levels because of higher feed costs and a reduction in the number of cattle available for slaughter.

The May 20 discovery in Canada that a cow had been infected with bovine spongiform encephalopathy, or mad-cow. disease, resulted in a U.S. ban on beef imports from Canada, aggravating the price situation. International beef buyers have turned increasingly to the U.S. market, putting upward pressure on prices. Choice-grade wholesale beef rose late last month by as much as $6.68 per hundred pounds, to what was said to be a record of more than $150.

Stock Yards Packing Co. of Chicago, a supplier of USDA Prime beef to upscale restaurants, said in its June 9 market report, "Prime remains very scarce and ridiculously expensive." The packer said grading percentages for Prime-certification were down to a record low 0.3 percent of all slaughtered cattle, compared with a normal 3 percent.