Rising beef prices hit consumers, restaurants; average cost up 9 percent to $5.36 a pound

DENVER - Beef prices have reached record highs, and consumers are starting to feel the pinch.

Numbers released Tuesday show beef averaging $5.36 a pound, an increase of 9 percent over March of last year.

"It's just outrageous what we spend on groceries these days with a family of five," said Highlands Ranch Mother Tiffany Roehm, after she bought her groceries. "I've noticed the higher beef prices."

Analysts say a tight supply combined with increasing demand is behind the increase.

"You've got x supply and that supply goes to the highest bidder," said Kevin Good, a senior market analyst with Cattlefax. 

He attributes the increase in beef prices to years of drought and higher corn prices because of ethanol production.

"At the same time, you're seeing developing companies that are moving up the food chain, so to speak, as far as their protein diet, and because of that we are exporting more beef, pork and poultry every year," said Good.

While U.S. herds are now expanding, Good said it will take a couple of years for it to make an impact on prices.

Restaurants are feeling the impact of the increase, as well. At the Colorado-based fast food chain Garbanzo's, managers say they have tried to absorb some of the cost, but they have had to pass some of it along to customers.

The restaurant has also been adding new menu items, such as the lower-priced gyro, which combines ground beef and lamb, and chefs are introducing new salads this summer.

"We've got a quinoa salad as well as a Cobb salad that also already has a lot of protein. So if people chose to get other alternatives besides the beef they can still get a complete meal," said Marci Levine, Garbanzo's corporate chef.

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