031139 Atkins Diet Fuels Surging Demand For Beef

New York (Forbes) - Beef is back.

With diet gurus urging Americans to eat their meat but drop the potatoes, beef prices are surging.

According to a recent report, wholesale beef and veal prices rose 18.3 percent last month, the biggest one-month increase since 1974, when the United States was struggling to "Whip Inflation Now."

"If this keeps up, I'll be able to get my wife a new car," said Chuck Kiker, a rancher in Beaumont, Texas.

It's hard to say exactly how much of the recent uptick in demand for beef is because of fad diets, but they are clearly a factor, said James Hilker, professor of agricultural economics at Michigan State University.

"My guess is that the diets are showing people that beef isn't all that bad, so even if people aren't on the diets, they're eating more beef," Hilker said.

The Atkins diet and the South Beach diet, which encourage dieters to eat less bread and pasta in favor of protein-rich foods like beef, have proved enormously popular in the United States, where obesity is a bigger problem than ever before.

Books outlining the diets are at the top of the New York Times bestseller list for advice books. Some 25 million people are on the Atkins diet, a spokesman for Atkins Nutritionals said, citing media reports.

Other factors are also pushing beef prices higher. In May, the United States banned cattle imports from Canada after a mad-cow scare, which has fueled a 30 percent increase in cattle futures since July.

Also in May, the National Cattlemen's Beef Association launched a large marketing blitz meant to highlight what beef growers reckon are the nutritional benefits of beef.

But not everyone is convinced that increased beef consumption is a good idea. "Stronger demand for meat now will mean higher healthcare costs in the future," said Jennifer Keller, nutrition project coordinator at the Physicians Committee for Responsible Medicine, a group that advocates vegetarianism.

In other words, she said, beef prices are rising now, but in a few years, it might be angiogram prices that are rising.

But beef producers believe beef should be part of a healthy diet and ranchers like Chuck Kiker say beef industry marketing efforts are paying off.

"People used to order a turkey sandwich if they were on a diet. Now they get roast beef with mustard," Kiker said.

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