by Bradley Parsons
Staff Writer
A beef shortage is dealing a financial blow to Jacksonville’s high-end steakhouses as they absorb the cost of record-high prices.
Ruth’s Chris Steakhouse General Manager Chad Cancelosi described this year’s price climb as steeper than past years. Although prices usually rise during dry summer and winter months, Cancelosi said this year’s prices exceeded the normal seasonal market rates by 30 cents to a dollar.
“These prices are at the highest level I’ve seen in six years,” said Cancelosi. “Our profit margin is always less in the summer, but these prices are higher than I’ve seen.”
Typically, price fluctuations don’t affect prices at Ruth’s Chris. Instead, Cancelosi said the restaurant sets a median price for the year that takes into account the beef market’s projected highs and lows. Cancelosi said Ruth’s Chris had no plans to raise its menu prices, but added that beef prices, projected in the coming months to break the $3.38-per-pound record,were taking a larger bite out of the restaurant’s earnings.
“We’re going to ride this storm out and see how long we can hold out,” said Cancelosi. “We want to see if we can ride this increase out without losing too much money.”
Cancelosi said he expected the prices to drop in six months.
Like Ruth’s Chris, Benny’s Steak and Seafood at the Landing and Morton’s of Chicago on the Southbank are battling against the market to maintain prices for their customers.
Benny’s General Manager Benyaman Yousefzadeh blamed the extra 30 cents a pound he’s paying on normal market fluctuations. However, Morton’s Vice President of Marketing Rick Weber noted “significant jumps” in the cost of prime cuts of meat.
Weber declined to comment on how the price increases affected the Chicago chain’s bottom line, but said the pricier meat represented “a disproportionate amount of our sales.”
Weber said the increases were driven by harsher drought conditions and surging demand for beef. He pointed to the recovering economy and the popularity of high-protein diets as possible reasons for the demand increase.
“Steakhouses like ours are the first to see declines in a slow economy and the first to pick up business when the economy lifts,” said Weber.
Weber said Morton’s would “continue to evaluate” the rising beef prices before deciding whether to compensate. He said the chain would “resist raising prices at all costs.”
According to the University of Florida’s Institute of Food and Agriculture Sciences, restaurants will likely have to keep digging further into their own pockets, at least in the near future.
In a May livestock summary, IFAS blamed increased prices on “uncertain water supplies, a weakened financial base for producers . . . and increased industry exports,” for projected record prices in late 2003.
According to the summary: “retail [beef] prices are expected to rise throughout the year. The average for 2003 likely will break the record
. . . set in 2001.”