031104 Sizzling Beef Prices Forcing Menu Changes

Montana - Blame it on drought, the Atkins Diet fad, mad cow disease or all three.

Whatever the cause, beef supplies aren't matching demand. And short supplies have pushed beef prices up, from ranch to feedlot to meat packer, and now to area restaurants, where prime cuts such as tenderloin might soon top $30.

"The prices are just flying," said Marvin Garrett, a business partner with Paul Grossman in several area restaurants, including Looie's Down Under.

Prices he pays to suppliers have jumped several dollars per pound on prime cuts, and he's now changing menu prices accordingly.

"Have to pass it along to the customer," Garrett said. "Hold off as long as you can but if you're in business to stay in business ...

"Tenderloin is up $3 (on the menu). I'm trying to keep it below $30," he said.

The ongoing drought in Western states has forced many ranchers to reduce herd size in recent years, and low prices a year ago had producers losing money and cutting herds.

Then in May a single case of mad cow disease in an Alberta, Canada, herd closed the American border to Canadian beef imports, further constricting supply.

And Garrett said the Atkins Diet fad, which emphasizes heavy protein intake, has increased beef consumption and further changed the supply-demand balance.

Justin Forsberg, head chef and kitchen manager at the Mint Bar and Cafe in Belgrade said beef prices have been rising steadily for the past month.

"There's nothing you can really do about it," Forsberg said. "We've seen price increases of $2 to $3 a pound in the last month. What we're told by our suppliers is it's because of a lack of Canadian beef due to the scare last spring on mad cow disease."

Prime cuts are seeing the biggest increase because they're in shorter supply than lesser cuts.

Forsberg said that in a perfect world, food represents about 30% of a restaurant's costs. That means if beef goes up $3, he'd have to raise his prices about $9 to keep the same ratio, he said.

But even at a place like the Mint, which draws plenty of beef lovers, there's likely a limit to what customers will stomach in the way of prices.

So Forsberg is also holding prices down as much as possible, and is considering changing menu selections to offer more chicken or pork.

Garrett and Forsberg said suppliers have told them prices could moderate in three or four months.

In the meantime, they could go even higher, because December and its holiday season typically brings the highest meat prices of the year.

"It will (go higher)," Garrett said. "Guaranteed."

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