040135 Taste For Beef Keeps Menu Prices High

The wholesale price of beef has plummeted because of mad-cow disease fears. But don't expect to see the price of steak come down at most restaurants.

Restaurants are paying less for beef, with wholesale prices down 20% in the last three months.

Generally, though, they don't appear to be lowering menu prices to reflect that.

Why not? Supply and demand, say restaurant owners and the beef industry.

"There is still a large demand out there from consumers," said Michele Peterson, a spokeswoman for the National Cattlemen's Beef Association.

In December, a cow in Washington State was found to have bovine spongiform encephalopathy, or mad cow disease.

Many consumers backed away from buying beef after that, and the wholesale price of live cattle plummeted from about $104 per 100 pounds to a low of about $76 per 100 pounds.

Restaurants have been slow to reflect that drop on their menus.

Gibsons Steakhouse downtown hasn't tinkered with prices, maintaining that its customers are willing to pay for the high-quality beef the restaurant offers.

Some Chicago restaurants, however, are passing along the savings. At Jury's Food and Drink on North Lincoln Avenue, the 18-ounce ribeye used to go for $25.95. Now it's down to $20.95.

"We are not here to gouge the customer," said Peter Borkman, co-owner of the Ravenswood- neighborhood restaurant. "We want to pass on the savings to our customers."

Supermarkets generally seem to be doing that, too. The U.S. Department of Agriculture found that the average price of beef for stew was selling for around $3.56 a pound in November.

The same cut of beef now sells for $2.99 at Chicago area Dominick's stores.

In November, the average retail price nationwide for lean and extra lean ground beef was $2.97 a pound.

Now, Cub Foods is selling ground beef for $1.98 a pound.

And beef prices at the checkout line might decrease more, Peterson said.

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