031134 Cattlemen Have No Beef With Record-High Prices

Montana Forum.com - From the meat counter at the supermarket to the tables at their favorite restaurants, Helena area carnivores are paying more for beef, as a perfect storm of increasing demand and dwindling supply have pushed cattle prices to record levels.

Several factors have contributed to the run-up in beef prices:

* The ongoing ban on most imports from Canada, after a steer in that country tested positive for bovine spongiform encephalopathy this spring. Before the ban, Canadian beef accounted for anywhere from 6 to 10 percent of the beef consumed in the U.S.

* A nationwide trend toward low-carbohydrate diets has consumers increasing their consumption of protein-rich meats - including beef.

* Beef prices traditionally rise as the holidays approach.

Consequently, live steers and heifers are trading for a dollar or more per pound, up from around 70 cents a pound a year ago. Those prices are passed along to the consumer, no matter where the meat is bought.

"People in the livestock industry are very appreciative of the fact that they're enjoying a good market," said Steve Pilcher, vice president of the Montana Stockgrowers Association. "Although, they would probably stop short of saying people are paying too much for beef."

At the Silver Star Steak Company, manager Jeff Hiel said his cost for sirloins has climbed to $8.55 per pound, up from "five-something" earlier this year. He held out as long as he could before raising menu prices.

"We just did it," he said. "It was nominal, a buck to a buck-and-a-half per meal. You have to pass the costs along, that's all there is to it."

Rising beef costs prompted management at the Brewhouse Brew Pub & Grill to go to market pricing on steaks - changing prices weekly based on the restaurant's cost.

"We see market pricing as a fair way to handle this without just increasing the prices on all our steaks," said general manager Todd Bruck. "When beef prices go back down, we'll go back to our old menu prices."

Scott Kottas, owner of the Legal Tender in Clancy, said his prices for tenderloin went up $2 recently, with prime rib up a dollar. He hasn't raised prices on his 10 steak entrees yet, but is watching the situation closely.

"We know Canada's not going to stay closed forever, and when the gates open back up again, prices will go down," he said. "It's tough, but we can't reproduce our menu every week."

Pilcher said that bad times in other countries have helped U.S. ranchers. Other countries besides the U.S. also banned Canadian imports after the mad cow discovery. And cattle supplies are down in Australia due to drought. American cattle exports have helped fill the void.

"The U.S. is poised very well to capitalize on what may be unfortunate situations in other countries," Pilcher said.

Because prices were so low for so long, the number of cattle in the U.S. was down. Pilcher compared increasing production to "turning the Queen Mary" - any decision by ranchers to raise more cattle wouldn't reach the market for more than a year, and who knows where prices will be by then, he said.

He added that while the stockgrowers are pleased that more people are turning to beef as low-carb diet trends sweep the country, they stop short of endorsing any one plan.

"Obviously the Atkins diet, as an example, is making people more comfortable with beef as a part of their diet," he said. "We don't subscribe to any fad diets but we are strong advocates of a well-balanced diet that includes beef."

And while prices may be up, restaurant diners still like a nice cut of beef, Hiel of the Silver Star said.

"There's always been a high demand for a good steak in this town."

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