Beef boosted by protein diets, Y2K
October 28, 1999
From Correspondent Ceci Rodgers
CHICAGO (CNN) -- After nearly three decades on the downswing, red meat is suddenly back in culinary fashion. For reasons as diverse as the new high-protein diet craze to the approaching millennium, people are snapping up high-quality steaks, sending prices for cattle to their highest level in two years.
For meat processors like Allen Brothers in Chicago, business has become a constant bull market.
"There's a good demand for all the middle meat, which is the tenderloin, the porterhouse, the New York strip, fillet, rib-eye steak," Robert Hatoff of Allen Brothers said.
The increased demand has sent wholesale prices soaring, up 20 percent or more during the past year for select beef cuts.
At Omaha Steaks, orders are on pace to reach a record high this year, due in part to the popularity of high-protein diets and changing lifestyles, the company says.
"There is sort of a trend of indulgence, and people looking to eat a little richer, a little bit larger," Todd Simon of Omaha Steaks said.
Others say millennium fever has spurred increased demand for beef.
"There is some hear among the party planners for the New Year's celebrations for the new millennium, that they may be left out if they wait too long in lining up their supplies," Chuck Levitt of Alaron Trading said.
For restaurants and hotels, year 2000 anxieties don't concern planes falling from the skies, but herds of customers ordering steak to celebrate the New Year.
So far, the higher cost of wholesale beef has not lead to high prices at the butcher.
"We cannot pass every price hike and price drop along to our customers," Patrick Norton of Smith & Wollensky said. "That's just not fair to them. So we are just trying to stay the course, and ride out the storm."
Not all steakhouses are facing a profit squeeze. Some used the futures markets to lock in lower prices through at least January.
No one, however, knows what will happen when all the parties end. Will the beef market wake up with a terrible hangover, with plunging prices and demand? Or will consumers' new love affair with beef become a long-term relationship that extends beyond the millennium?
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