Higher beef prices putting a pinch on local restaurants

Beef prices have risen steeply for consumers since COVID-19 hit. At the same time, beef prices for ranchers have dropped.

Much of this is due to supply chain disruptions caused when meat processing plants closed in April. Although local restaurant owners say prices have begun to go back down, they're still much higher than in previous years.

Jill Frisbee, who owns the Pit Stop, said that all of her meat is at least 25 percent higher in cost, with some up as much as 35 percent. For a while, some meat was unavailable.

"I couldn't even buy bulk beef to make my taco meat," Frisbee said. "They kept substituting and that was out."

She said even purchasing from Sam's Club limited her to just four pounds. "That was about the middle-end of May when everything was crazy."

"I didn't raise my prices," said Frisbee, "and I probably should have. Prices of everything have gone up. My orders are a lot more than they were last year. But you gotta do what you gotta do."

Greg Smith owns the Montanan and has likewise struggled with obtaining beef at a reasonable cost. He's seen rises in costs for both steaks and hamburger.

"It was a huge impact," he said, "but I didn't adjust my prices. I just absorbed it. We use all prime grade for our steaks. The availability of it almost went away. Sysco hasn't had prime grade beef for a while. It's slowly starting to come back, and the prices are slowly starting to go back down."

"Hamburger is starting to get back down. It's still higher than it was, but it's a little bit more manageable," said Smith.

"There wasn't a shortage of cows. It all had to do with slaughterhouses," said Smith. He added that if he'd been able to work directly with someone producing meat in Montana, the cost would have been cheaper, but it would have taken longer to make the arrangements and get the meat.

Calves raised in Montana mostly end up at midwestern meat processing plants. Once processed, the meat is sold to consumers and restaurant supply chains like Sysco. However, in April, diagnosed cases of COVID-19 caused several of the meat processing plants to close down. That break in the chain has left cattle producers with cows that have nowhere to go, as the processing plants aren't processing as many.

On the other side of the chain, consumers are paying more for beef because there's a limited supply.

There have been pushes in the government to try to mitigate some of these costs. In late April, President Donald Trump issued an executive order under the Defense Production Act to require meat processing plants to stay open. In addition, the Coronavirus Food Assistance Program offers payments for "eligible producers of specified agricultural commodities outlined above who have suffered a five percent-or-greater price decline as a result of the COVID-19 pandemic," but as with many COVID-19 relief programs, it's unclear how far and to whom this money will go.

In late June, the disparity between what ranchers are paid and what meat processing plants are making spurred Sen. Steve Daines and others to urge the Department of Agriculture to look into the issue, noting that "four beef processing companies control 80 percent of the market."