The recent increase is U.S. beef prices can be good news or bad news depending on which end of the cow you’re on. The increase is welcomed by Iowa cattle producers, but the president of the Iowa Hospitality Association says it’s causing problems for the restaurant owners who supply the beef. Doni DeNucci says the price of beef has risen steadily in the last year, in part due to the ban on beef imports from Canada after a mad cow disease scare. She says there’s also been an increase in demand due to the popularity of high-protein diets, and a drought in some of the beef producing regions in the U.S. and Australia, that have combine to push prices up. DeNucci says the 77-hundred restaurant owners have to decide how they’re going to handle the beef price increase. She says restaurants have a very, very narrow profit margin, and they try to keep their food costs low without compromising quality. DeNucci says you may pay more for a meal at your favorite bistro, but it may not be directly reflected in the price of the beef you order.She says most often restaurants are very reluctant to raise prices as she says “it sends a negative message to their customer.” She says restaurants will often look to raise the price on other menu items to help offset the overall food cost and adjust for the increase in beef prices. DeNucci says it depends a lot on the type of restaurant, as a steakhouse would see a different impact than a place that serves lots of burgers. DeNucci says the increase comes as the industry regained some of the steam it lost after 9-11.She says the trend recently has been very positive, as they had a good summer, a strong fall and are optimistic about this holiday season. The National Cattleman’s Beef Association says the third quarter of 2003 had the strongest demand for beef in 19 years, but the supply of beef was the smallest in 30 years.
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