Beef Prices Surge, Hitting Steakhouses Hard

Beef and veal prices climbed 14.7% from September 2024 to September 2025, compared to a 3.1% increase across all food categories, based on the latest CPI data cited in a CNBC report. The U.S. cattle herd hit its lowest level since 1951 at the start of 2025, putting restaurants—including steakhouses—under real strain as costs rise faster than they can absorb, with some in ‘code red’ mode per The New York Times.

What’s Behind the Cattle Shortage

Severe droughts over recent years have forced ranchers to cut back on breeding heifers, shrinking the herd further. Taylon Lienemann of Linetics Ranch in Nebraska told CNBC that dry conditions mean less feed like hay or alfalfa, so producers sell off cattle instead of holding them. Adam Wegner from the Nebraska Beef Council added that high demand makes it tempting to cash in now rather than rebuild.

Nate Rempe, CEO of Omaha Steaks, called it a mix of drought, strong demand, and low heifer retention. His company hasn’t raised prices in over three years but says beef costs are now eating into profits, forcing a hunt for efficiencies. Tariffs on Brazilian imports and cattle disease in Mexico add pressure, mostly on ground beef supplies.

No Fast Fix for Restaurants

A Fox Business analysis quotes Wells Fargo economist Michael Swanson saying relief will be “slow and painful” for everyone in the chain. Cattle on feed totaled 11.7 million head as of November 1—the lowest for that month since 2018—and placements dropped 10% from last year. Everyone from producers to packers wants to hold margins, delaying drops at the counter.

Recent moves like Tyson’s closure of a Nebraska plant by January 2026 signal processors can’t keep losing money, which Swanson says could push cattle prices down 10% over the next year and a half. But retail beef won’t follow right away.

Budget Cuts That Still Deliver

With premium steaks like ribeye pricier, a Food & Wine piece from chefs and butchers points to solid alternatives. These come from less-hyped spots on the cow but pack flavor and save cash:

Bavette (sirloin flap): Thicker than flank with good marbling; sear it like steak. Chefs Sean Froedtert and Andrew Black say it’s $8-9 per pound less than ribeye.
Denver steak: From the chuck under the shoulder blade; rivals ribeye marbling at 20-30% lower cost. Rand G. Packer calls it juicy and tender—cook medium-rare.
Flatiron: Second-most tender cut from the shoulder blade; uniform shape for high-heat grilling. Joshua Turka suggests marinating.

Turka also recommends buying from local farmers or butchers to dodge national auction spikes. Steakhouses could lean on these to keep menus viable without jacking up checks. Local guides like this Columbus list show 13 options across budgets.