Just in case you’ve been stuck in the walk-in and out of earshot for the last couple of months here’s the bad news: Commodity prices are on the rise. And animal proteins—always one of a restaurant’s more expensive buys—are getting hit hard. While consumer preference for red meat decreased somewhat during the economic slump, demand is rebounding significantly as recovery progresses. Now the good news: There are ways you can purchase and plate beef, pork and lamb to ease the pain—without shortchanging your customers or your profits. Listen to what these chefs, suppliers, economists and other experts have to say.
The meat market
Cattle inventory dropped to the lowest in 53 years, reports Jim Ethridge of the National Cattlemen’s Beef Association, but worldwide demand for beef and other animal proteins is very strong. Although the larger size of each steer is somewhat offsetting low cattle count, the simple laws of supply and demand indicate that beef prices should be trending up. What other factors will have an impact on red meat prices?
- Higher input costs are affecting the price of all proteins. Four out of every ten rows of corn are now going into ethanol production, leaving very low feed stocks for cattle, pigs and chickens. In April, corn was selling at $7.60 a bushel and it’s predicted that it will plateau around $7 even as the 2011 crop comes in. The big question mark is weather; a summer drought can jack up prices even higher.
- The export market is very strong. China’s appetite for red meat is boundless, and U.S. producers are ramping up exports to meet demand. That means less beef and pork for American tables—and higher prices. The aftermath of the earthquake in Japan is hampering imports for the short term, but long term, there will be a desperate need for beef and pork exports. The weakness of the dollar against other currencies is worsening the situation—our meat prices don’t seem that high in foreign markets.
- Wholesale meat prices have already jumped. February marked the largest one-month increase in 37 years for wholesale food prices, with beef and pork climbing by 4 percent, reported The Food Institute of Upper Saddle River, NJ. “These wholesale prices are just starting to push through the channels, but most restaurants haven’t seen increases yet,” says Karl Skold, president of Westside Economics in Omaha, NE. “By summer, prices for raw meat will definitely be higher.”
- Rising commodity prices are reheating inflation. In April, the year-over-year inflation rate for meat and poultry was up 6.8 percent, states Dr. Chris Hurt, an agricultural marketing specialist at Purdue University. He estimates that beef prices will rise 11 percent and pork prices, 9 percent, by the end of 2011—figures above USDA predictions.
With the price you pay for meat sure to go up, how can you work with vendors to maximize your purchasing dollars? Strengthening ties and communication with suppliers is key, feels John Doherty, chef with Certified Angus Beef. “They know when larger quantities of meat are coming on market and when price and production fluctuations may occur,” he says. “Operators should work with suppliers to buy a certain quantity at those times and lock in prices. Vendors will make the same margins whether the price is low or high, so lock in low, when possible.”
Chef, 1500° at the Eden Rock,
Miami Beach, FL
At this farm-to-table steakhouse, local sourcing is a big deal and red meat is no exception. “My distributor buys from three locally based ranchers, who supply us with items like Florida grass-fed wagyu ribeye and Palmetto Creek Farms pork,” says DaSilva. A meat purveyor from the Midwest fills in the gaps.
One of DaSilva’s signatures is a 10-oz. prime top sirloin “picanha” steak ($27)— a Brazilian cut with a fatty cap that comes from the top of the butt or rump—a more economical section of the cow. “The cap imparts tremendous flavor and juiciness, melting into the meat as it cooks. All our steaks are cooked in a 1500° custom-designed broiler that sears the meat and locks in the juices,” she explains.
Although DaSilva doesn’t do any whole-animal butchering, she does buy and cut down primal cuts. “I cross-utilize every scrap,” she notes. “The tips get marinated for a popular small plate, Grilled Rare Teriyaki Beef Skewers ($9) and the trim goes in a sauce.”
Consulting chef, Certified Angus Beef
Engineering the protein choices on your menu can help increase profitability, advises Doherty, former executive chef at the famed Waldorf-Astoria Hotel for 25 years. Although a steak may cost an operator $25 wholesale, it can be marked up $15 for a higher profit margin; a chicken entree may only cost $5, but can’t be sold for more than $12 to $15.
Doherty also favors engineering presentation to boost profits. For example, he takes a 12-ounce strip steak, grills half
(6 ounces or so) and plates it with another meaty prep. “I like braising beef cheeks and stuffing the tender, saucy meat into rigatoni,” he says. “This gives the diner two ways to enjoy beef and costs the operator less to plate.”
With a skilled chef and/or prep cooks, purchasing primal cuts and cutting them down yourself can be economical. “But if you’re worried about waste and/or don’t have knowledgeable kitchen staff, portion cuts are a smarter choice. They come cut down to your specs and many are already trimmed,” Doherty notes.
From the industry side
As the height of the grilling season approaches, consumer demand for steaks and burgers goes way up—and so do prices for those beef items. “It’s a good time for operators to look at some of the other cuts and muscles being fabricated from within the round and chuck,” says Jim Ethridge, executive director, account development for the National Cattlemen’s Beef Association (NCBA). He cites steak options such as the round petite tender and Denver steak from the chuck roll. That said, “top tier steaks [short loin, strip loin and ribeye] can be a better value because the wholesale pricing has been more stable in 2011,” notes Trevor Amen, NCBA’s manager of channel marketing. If you see a good price on a cut, feature it as an LTO, the two suggest.
According to research by Ipsos Public Affairs, 60 percent of patrons say they would pay the most attention to a beef menu special, compared to one made with other leading proteins. Plus, “beef can drive up the total ticket,” says Ethridge. As volatility increases, the flexibility to substitute one cut for another is key to profitability. NCBA also recommends plating beef as smaller portion ingredients—medallions topping a salad, for example—or presenting a “steak flight” that allows customers to try various preparations and sauces.
Owner, Cochon BYOB, Philadelphia, PA
Although pork prices are year-over-year higher, they aren’t as volatile or high as beef prices. That’s good news for Giuffi, who runs the pig-centric 40-seat Cochon with his wife, Amy. “I’ve noticed pork prices going up slightly, but not as much as produce and lamb,” he says.
Giuffi purchases both little and big parts of the pig, sourced primarily from D’Artagnan, the specialty meat purveyor. “I buy whole bellies of Berkshire pork, then cut out the ribs to cook and serve separately,” he explains. “In addition to roasting pork bellies, I cure some for pancetta and use the extra fat for my sausages, so there’s little waste.” Chops and pork cheeks are other porky parts Giuffi purchases. Cochon’s small space makes it difficult to bring in whole, 300-pound animals for DIY butchering.
Slow-Roasted Pork Belly with white bean ragout and bacon emulsion ($23), Slow-Roasted Pork Shank ($23) and Berkshire Pork Ribs and Sausage ($22) are three of Cochon’s sought-after dinner entrees. Brunch includes house-made scrapple, pate and sausage, as well as more pork belly. And Giuffi orders 22-pound suckling pigs to feature as specials from time to time. “Pork outsells everything else on the menu,” he claims.
From the industry side
The rising cost of corn has resulted in a “new norm” in pork prices—they now run 80 cents to over one dollar per pound wholesale, up from 50 to 60 cents, notes Stephen Gerike, director of foodservice marketing for the National Pork Board. Since it takes 750 pounds of corn to grow a hog to a 250-pound weight, feed represents a significant cost.
“Pork is in good supply, but the more popular cut, the higher the price,” Gerike reports. He recommends that chefs create dishes with pork leg and shoulder (butt) instead of belly and loin. “The boneless butt can be marinated and braised for sandwiches, for example, and the outside muscle of the leg (the ham eye) sliced into medallions,” he explains. “A number of Mexican and Asian street foods rely on these parts.” Gerike agrees with the beef industry—use pork as an ingredient instead of presenting a huge plate of meat. Slice marinated tenderloin very thin and toss with pasta; top a 6- or 7-ounce pork chop with pulled pork. “And position pork as a premium dish on the menu, priced accordingly so it’s a profit booster. If your beef sirloin sells for $19.95, price your pork chop at $17.95—not $13,” he advises.
Operators can maximize pork purchases by looking for products that have written specs for quality. “The specs for marbling, color and pH range should all be available from your supplier,” Gerike points out. “PH is the most important: Too high a pH and the meat is overly moist and can spoil easily; too low a pH and the pork is pale and tough. Target the middle range—high 5s to low 6s.”
Nick’s Cove, Marshall, CA
While lamb consumption in America is pretty tiny compared to beef and pork, lately it’s getting more play on fine-dining and polished casual menus. Plus, lamb is an inherently sustainable choice; it’s primarily grass fed—produced with minimal or no feed grain—and can be locally sourced.
Adam Mali, executive chef of Nick’s Cove sources carcasses from Kevin Maloney of nearby Fallon Hills Ranch. “I like to buy local lamb direct because it is a fresher product, it yields a better return to the sheep producer and while I am not the most experienced butcher, I get some great yields,” he says. “Because the carcass is smaller, it fits in the restaurant kitchen.”
Mali uses half a lamb every couple of weeks—a cost-effective way to purchase—and breaks it down into cuts that utilize many cooking methods. To keep menuing costs down, he shoots for six ounces of protein for entrees. A favorite is balsamic-marinated Braised Lamb Shoulder served on polenta. Leftovers are stuffed into ravioli or stirred into pasta sauce. The rack is either roasted and served as an entrée or divided into individual chops for an appetizer, selling well either way. “Roast leg of lamb does not intrigue my guests as much, but if I smoke it and slice it for sandwiches, it’s a good lunch item. I’ve also made some fabulous lamb sausages from the grind,” says Mali.