Record breaking droughts, rising fuel prices and a lingering corn shortage has driven beef prices to an all time high. Local restaurants are left with hard choices: change their menus, raise prices or eat the higher costs. Beef prices hit an all time high just before Memorial Day weekend and are unlikely to come down until July.
The catalyst for the shortage started in 2008 as the price for feed and fuel surged, which should've raised beef prices back then had we not entered into a deep recession cutting the demand. As the economy began to recover in 2011, higher prices for corn and soy beans caused a rise in feed prices forcing ranchers to cull their cattle because they couldn’t afford to feed them. Today, demand is back up yet we are experiencing the smallest number of cattle in the national herd in decades. Considering it takes 3 years to go from pregnant to slaughter ready there is no quick way to build up the supply. Some say it could be next year before we see a substantial increase in supply.
Here are some strategies to save you money:
- Take a daily meat inventory to keep a closer eye on waste and theft.
- Sit down with your local sales rep to find alternative cost-saving cuts without diminishing quality and flavor.
- Evaluate portion sizes to find ways to trim the cost per dish and re-train all employees on the importance of portion control.
- Create special entrees or appetizers incorporating beef that allows you to make cost adjustments and get your staff excited about selling it. This could take the heat off a less profitable dish without the hassle of a menu change.
Restaurants have to get creative and be flexible in their offerings as consumers will only pay so much to absorb rising beef prices. How best to adapt to the rising costs depends on your individual operation so if you’d like an expert analysis, a restaurant consultant can help you find solutions for your business.
Originally published 6/6/13