Ok, let me say that I'm starting to get seriously annoyed at the ethanol industry. As far as I can tell, all of the interest in ethanol hasn't done anything to reduce energy costs, but it has hurt every other industry that depends on corn. Even famed New York steakhouse Peter Luger (****1/2)
is feeling the pinch:
The price of steers ready for slaughter jumped to 98 cents a pound last month from 83 cents a pound in April 2006, according to Urner Barry, a publisher of marketing reports. After slaughtering, transporting and butchering, a restaurant’s cost for a well-trimmed steak may be 30 percent higher, said Bob Mark, director of sales for Buckhead Beef Northeast, in South Plainfield, N.J., a division of Buckhead Beef, a wholesaler based in Atlanta.
The last time prices reached those levels was at the end of 2003, but they dropped sharply in early 2004. This time people in the meat business think the increase will be more persistent.
“The bottom line is that we have to assume that beef prices will not come down any time soon,” said Ephraim Leibtag, an economist who specializes in retail stores and restaurants for the Economic Research Service of the Department of Agriculture.
Many of the factors pushing up prices are also affecting quality.
The demand for ethanol and a harsh winter have caused the price of corn to rise about 60 percent over the past few months.
The worst is that the restaurant is going to cut back on taking reservations, which are already a pain to get:
The shortage of prime beef has led Marilyn Spiera, an owner of Peter Luger Steak House in Williamsburg, Brooklyn, to cut back on reservations, close the restaurant earlier each day and book fewer large parties, which she also did the last time beef prices were this high, in 2003. “It’s hitting us worse now,” she said, noting that prime beef that meets her standards is scarcer now. The restaurant recently increased the price of the porterhouse for two, to $81 from $79.90.
Update: Could steak's loss be barbecue's gain?
While that means higher prices (and not just for the best cuts of beef), could it portend a new wave of interest in barbecued beef? Keep in mind that barbecue’s general purpose for a long while has been to take cheap, tough and otherwise unfriendly pieces of meat and turn them into something delicious. So higher prices for better, easier to cook and more tender pieces of beef could lead more people to look a little further down the price spectrum towards tougher pieces of meat that benefit from the gentle massaging of a smoker.
Definitely some interesting meatonomics to ponder this Memorial Day weekend.
(Disclaimer: I'm a contributor to the above-linked Blogbecue, the best blog on barbecue you'll find anywhere)