- The Washington Times - Wednesday, March 7, 2001

The price of beef is going up, but that hasn't stopped consumers from agreeing it's what's for dinner.

Nationally, beef prices are nearing an average of $3.21 per pound for USDA choice cuts. In the District of Columbia, beef prices are up as much as 15 percent for ground beef, and 6 percent for various cuts of steak, said Craig Muckle, manager of public affairs for Safeway.

Demand for beef has risen in the past two years, while supplies have been crimped by harsh winter weather, a trend that has pushed prices higher.

Mr. Muckle said fears of "mad cow" disease among suppliers also have played a role in rising prices. But such concerns have not frightened U.S. consumers.

"Consumers are educating themselves more about the origins of their beef," Mr. Muckle said.

But Chuck Lambert, chief economist for the National Cattlemen's Beef Association, said mad cow disease plays no role in beef's high prices.

"The consumers know we don't have mad cow disease in the beef, and because of political trade barriers, we can't sell our meat into the European Union," he said.

He explained that the rise in beef prices is caused by two factors.

"Beef demand has increased over the past two years, and this is coming at a time when we are seeing a smaller supply of market-ready beef. It's also been one of the worst winters ever in cattle-raising country," he said.

"We're at the stage in the cattle cycle where the numbers decline, anyway."

Mr. Lambert said the cattle industry goes through a 10-year cycle in which there is a large supply of cattle, which causes lower prices, in the middle of the decade. These herds get sold off, causing lower supply and higher prices at the beginnings and ends of decades.

Mr. Muckle said Safeway is trying to curb costs, but the company isn't as successful as it would like to be, especially with the bad reputation meat has been getting as of late.

"We try to minimize costs, but can't always do it," Mr. Muckle said. "It's almost like the gas industry you cut production, and the prices will go up. You can look at the prices of a product being the result of a trend or a fluctuation, and here, it's more of a trend."

Barry Scher, vice president of public affairs for Giant Food, said beef prices are 20 to 30 cents above normal.

"This is the first major increase in price since 1993. The beef industry has been pretty flat over the past five years," Mr. Scher said. "People have been looking for healthier alternatives, and staple foods for dinner are less expensive."

Even though there has been a trend toward eating healthier foods, steakhouses remain popular. Some steakhouse owners speculate that the more Republican presence in the District might boost business.

"Texans and Republicans, that's a nice mix for the beef industry," Doug Knight, a spokesman for the Shula's steakhouse chain, said. "With the Texan influence, there's hope the steakhouse feel might get more evolved in town."

Restaurants like Shula's and Sam and Harry's, both in the District, say contracts they have with their wholesalers help them stave off paying high prices.

"If the high prices hang around in June, it may affect us adversely," said Tom Greene, chief operating officer of Sam and Harry's, whose contract with its wholesaler ends in June. Mr. Greene says the price the restaurant pays for its meat currently ranges between $9 and $14 per pound.

Outback Steakhouse in Aspen Hill has had to broaden its menu to battle high beef prices, manager Andrew Brown said. Menu prices have risen about 3 percent for the chain over the last year, Mr. Brown said. About two and a half years ago, the restaurant paid on average $4.36 per pound for its beef. Now it pays $5.01. For its most popular item, the Outback special, a 12 oz. center-cut sirloin, the company pays $5.40 per pound.

"We've gone to new menu items, such as chicken and pasta dishes, because of the higher beef prices," Mr. Brown said. "There are steaks on our menu that are more than $20 now. It's all about supply and demand. With the economy, people have the money to go out to eat more, but there are only so many cows."

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