Reports show diminishing cattle herds and decreased production, along with factors such as rising corn prices, have contributed to driving up its price.

Those who buy beef wholesale, and turn around to sell it retail, have had to adjust their pricing accordingly. In most cases, the increases are passed along to customers. Domestic beef demand is expected to increase in 2011, while production is expected to decrease, according to reports from Oklahoma State University.

Looking back at 2010, Derrell Peel, professor of agribusiness at OSU, says domestic beef demand – especially for pricey middle meats like steaks, sirloin and rib eye – lagged overall, but improved toward the end of the year. This, he says, likely is due to holiday demand.

He expects the increased demand to face competition from lower-priced items like pork and poultry later in the year.

Peel says while he tracked an increase in cattle slaughter in 2010, it was offset by lower carcass weights, resulting in only a slight increase in annual production. With accelerated slaughter of heifers and cows, herds decreased to the point where he says the industry began 2011 with the lowest cow herd in nearly half a century.

In early 2010, he says a transition to higher cattle prices allowed feedlots to make a profit for the first time in almost three years. He says strong feedlot demand pushed up feeder cattle prices, but feedlots were at a break-even point by the end of the year, due to high feeder cattle and feed costs.

Al Cusack, owner of Cusack Meats, 301 SW 12, saw that impact as prices were high, leading to cattlemen taking their cattle to market or feed yards for top dollar. That move, however, left few replacement heifers. He says it takes 18 to 22 months to get a heifer ready for market.

“Now, there’s not enough cattle on feed that is ready to be processed,” he says. “It’s strictly supply and demand.”

Cusack says he was paying about a third more in 2010 for every cut of beef than he was in 2009. For example, he says, Certified Angus beef brisket sold for about $1.15 per pound in early 2010. In early 2011, that same product was about $2.05 per pound.

“Prices are just going through the roof,” he says. “It’s just been a constant increase in price.”

Cusack, who provides meat to restaurants, hospitals, country clubs and grocery stores, has had to raise prices for middle meats. In turn, his clients have to pass on the hike to their customers.

For retailers selling beef at butcher shops and restaurants, they, too, have had to determine when customers will see higher price tags. At Bill Kamp’s Meat Market, 7310 N Western Ave., owner Bill Kamp simply can alter the price placard in his display cases as the market dictates.

“Unlike a restaurant with printed menus, we’re at liberty to raise and lower our prices at will,” he says. “We always adjust our prices quickly to whatever the market might be on any given day or week.”

He says steak prices are about as high now as he has ever seen. Before 2010, he charged about $10 for an 11- to 12-ounce Kansas City strip steak; in the past year, that same cut sold for about $12.

“We have seen middle meat prices as the bellwether of where meat prices are going,” he says.

Restaurant owners also are faced with when and if to print new menus. Keith Paul, president of A Good Egg Dining Group, sells beef entrées at Red Primesteak, Iron Starr Urban BBQ, Cheever’s Cafe and Republic Gastropub. Entering 2011, he was evaluating each eatery’s pricing.

“We’re expecting beef prices to be strong throughout the year and into 2012,” he says. “We’re going to have to adjust prices.”

As costs began to increase in 2010, Paul was able to keep prices where they were, even if that meant making a little less on some items. At Iron Starr, Paul says he has not raised prices in two years. At Red, he has seen his profit margins shrink as menu prices have also remained consistent. He knows higher prices can lead customers to look for lower priced options, or perhaps stop in less often, or not at all.

“Just because beef’s going up doesn’t mean we’re going to raise all our beef prices,” he says. “We’re going to hold prices where they are as long as we can.”