Sky high prices: Restaurants struggling to make ends meat

Nathan Baker • May 20, 2014 at 10:19 PM

Higher national meat prices are making local consumers squeal at the checkout register and cutting local restaurants’ profits to the bone.

Shortages of beef and pork, driven by drought on the cattle side and a piglet-killing virus in the swine department, have elevated wholesale and retail costs to the highest they’ve been in at least seven years.

According to U.S. Department of Agriculture tracking, beef cost $3.48 per pound on average at wholesale last month, up from $2.91 a year ago.

Those increases resulted in the highest retail price for beef since at least 2008: $5.87 per pound.

“It goes back even farther than the recent droughts in California and out west, all the way to droughts they had a few years ago in Texas and even some parts of Tennessee,” Charles Horde, executive vice president of the Tennessee Cattlemen’s Association said Tuesday. “It takes a long time for the cattle industry to grow, because heifers can only have one calf per year. We’re not like the chicken or pork folks, who can respond fairly quickly, it takes us a while for beef levels to get back to where they were.”

Because of a variety of factors, one of which was the difficulties related to the weather over the past few years, Horde said herd numbers are at their lowest levels in both Tennessee and the nation since 1950.

The pork shortage, caused by the Porcine Epidemic Diarrhea virus, which has killed 10 percent of the U.S. pig population, has likewise sent prices through the roof.

According to the USDA, a pound of pork cost $2.02 wholesale and $3.95 retail last month, a rise of 43 percent and 13 percent over last year, respectively.

Dusty Saylor, owner of Pleasant Valley Farms in Jonesborough, said the higher price he’s been able to collect for pork lately is helping him recoup after losses when feed prices jumped a few years ago.

Droughts and farmers choosing to switch from corn to other crops reduced the supply of feed, cutting into the farm’s profits.

Through luck and the use of hygienic feeding practices, Saylor said his 100 hogs have not been affected by the virus that is killing so many piglets.

“It all goes back to supply and demand,” he said about the soaring pig prices. “Most people are pretty understanding when I explain to them how it’s affecting me and why the price is the way it is.”

At J’s Corner, a popular burger joint in Elizabethton, owner Jarrod Ellis said the bump in meat costs have been difficult to not push off onto his customers.

“Like anybody else, we’ve had to raise prices some, but we’re trying to eat as much as we can and try not to pass too much on to the customer,” Ellis said. “Portion control is a big thing right now to make sure we’re not giving any of it away.”

He said since last year, prices for ground beef have increased about 20 percent.

With beef and pork on the rise, Ellis said some have turned to chicken as an alternative, but the higher demand for poultry has given prices a bump there, too.

At the Parson’s Son, a barbecue restaurant in Jonesborough, a sign on the door informs customers that beef brisket is not currently available.

“We’re dealing with pork and beef going up at the same time,” owner Tom Harwell, who purchases the meat for the restaurant at Sam’s Club, said. “We couldn’t absorb the costs of both, so I had to make a judgment call, and I figured I can’t run a barbecue restaurant without pork, at least in Tennessee, so we cut beef out temporarily.”

The Parson’s Son’s signature dish is smoked pulled pork, and it’s the menu item that sells the best, as well.

Harwell said a handful of customers have walked out after being told beef wasn’t available, but there’s hasn’t been a noticeable loss of business from the decision.

“In all honesty, I’ve contemplated not bringing it back, but it’s out there on the sign,” he said. “It’s not a big enough portion of sales to get worked up over.”

With deaths from the swine virus falling and the July 4 barbecuing peak around the corner, experts expect prices for both products to drop at least a little.

Harwell said it’s hard to tell what the effect will be, but he’s already seeing pork prices start to ease.

“I’m not sure when we’ll be able to bring brisket back, but we’re checking on the prices constantly,” he said.

Follow Nathan Baker on Twitter @JCPressBaker. Like him on Facebook: www.facebook.com/jcpressbaker.

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