In a sign that business might finally be looking up for restaurant operators, wholesale beef prices hit their lowest point in years last month.
According to Cattle-Fax, the wholesale price for a Choice Rib, Ribeye Roll, and Lip-On was $4.14 per pound in February 2009, the lowest since January 2002. Wholesale prices for the Striploin subprimal have also returned to 2002 levels.
“The beef industry was severely impacted by the high commodity prices in 2008,” says Mike Miller, vice president of business development for Cattle-Fax. “Input costs outpaced beef price increases which squeezed margins at all levels. Last year was historically bad for certain segments of the industry.”
Today, however, the news is better.
Jane Gibson, executive director of foodservice marketing for the National Cattlemen’s Beef Association, says savvy operators will seize this opportunity to upgrade their menus.
“Pricing is really conducive right now for beef specials and demand remains strong amongst consumers who are looking for value,” Gibson says.
According to a study conducted by the group and Ipsos Public Affiars, 76 percent of restaurant customers say beef is the most mouthwatering protein.
Gibson suggests operators use the low prices to roll out mini burgers or steak sandwich bites both of which are on-trend with the small-plate craze sweeping the industry.
While beef prices will experience a bump this summer, they are expected to stay below historic levels and to drop back to current prices quickly.
“They will likely approach today’s levels in the late summer or early fall,” Miller says.