Cuts Above Prime beef is scarcer than ever. If you're a meat lover, you can either lower your standards or eat where the experts eat.
(FORTUNE Small Business) – Beef may be what's for dinner, but if you want to find a topnotch steak, you'll need to look a little harder these days. Since late spring the U.S. has been hit with the biggest shortage of prime beef since the USDA created its rating system in the 1920s.
Last year about 4% of all inspected beef was certified by the USDA as prime. To earn that rating, the meat must be well marbled with fat (which makes for juicier, more flavorful steaks). This year, however, roughly 2% is qualifying as prime, and some experts estimate that the supply won't return to normal until at least next year, if not 2005. What's behind the shortage? Last year's harsh winter meant cattle had less time to graze. A mad-cow scare in Canada, which usually supplies about 10% of the U.S. market, has led to restrictions on its beef. And the Atkins craze has dieters eating meat with every meal, outstripping supply.
As a result, beef prices have gone up, and some restaurants are passing the extra cost on to diners: A 16-ounce prime boneless strip selling à la carte for $29 earlier this year could soon go for as much as $40. Other eateries, reluctant to raise prices in this economy, have resorted to serving lesser cuts dressed up with tenderizers or sauces. (And you might not know the difference by reading the menu. "Half of these steak places, when they say 'prime' right now, they're lying," says one industry veteran.)
To find restaurants you can trust, we talked to the experts--small-business owners who sell premium beef wholesale or retail. From Chicago to New York to San Francisco, they came up with recommendations that stand out from the herd. The only advice we would add is this: Show up hungry.
CHICAGO The last of its cattle stockyards closed in the 1970s, but Chicago still has the reputation of a steak town, thanks to famous places like Morton's of Chicago and Gene & Georgetti's. Both are customers of Allen Brothers (Allenbrothers.com), one of the largest wholesalers of prime beef in the U.S., in business since 1893.
Bobby Hatoff is the owner of Allen Brothers, and he's had a front-row seat as the prime-beef shortage has sent prices soaring. His industry relationships have helped keep his restaurant clients supplied, but the demand has been so strong that lately he's had to get creative. Recently he started buying steaks cut from Japanese cattle known as wagyu, the famously pampered breed that produces Kobe beef. But the ones Hatoff buys are raised in Texas.
Most cattle graze freely their first year. Then they begin a special diet, including lots of grain, to help fatten them up. American cattle are typically fed for 90 to 120 days, but for wagyu it's 300 to 550 days. They eat a strict Japanese diet that's supposed to be a secret but includes beer and alcohol mash to stimulate their appetite. The result is "white beef," meaning the marbled fat is far more prevalent. Despite that increased marbling, wagyu beef actually has less saturated fat than American beef, thanks to the diet, and it is free of hormones and antibiotics.
Recently one of Hatoff's favorite Chicago restaurants, Yoshi's Café (3257 N. Halsted St., Chicago; 773-248-6160), started serving wagyu. Yoshi's is a client of Allen Brothers, along with several hundred steakhouses throughout the country. Chef-owner Yoshi Katsumura, who trained in Japan and France, added wagyu this summer as an eight-ounce steak for $50 (that's not a typo), a ten-ounce hamburger ($21), and an appetizer, seared and thinly sliced ($27). Katsumura also serves prime beef steaks, but he says customers who try wagyu are usually won over. "It melts in your mouth," he says. And if a $50 steak sounds rich, consider: It's cheaper than Kobe beef shipped from Japan.
NEW YORK CITY When Stanley Lobel and his son, Mark, go out for steak, they often bring their own. The two co-own Lobel's (Lobels.com), a famed Manhattan butcher shop that's been in business since 1840 and sells only prime beef (as well as wagyu). Customers include Henry Kissinger, Jerry Seinfeld, and Whoopi Goldberg.
But when the Lobels want to trust the chef, one of their favorite places isn't a steakhouse but an Italian restaurant in Port Chester, N.Y., half an hour north of Manhattan, called Giorgio's (64 Merritt St., Port Chester, N.Y.; 914-937-4906). "We had a great, great porterhouse veal chop there," says Mark Lobel. Giorgio's center-cut veal chop costs $32 and, according to Mark, is worth every penny. "He does it very simple, which I like," Mark says. "It's not doctored up with all the sauces. Just salt and pepper. It's a find."
Giorgio Canzonero is the man behind the restaurant, but he isn't alone in running it. His 76-year-old mother comes in to make cannelloni and cheesecake. Celebrities like Martha Stewart and Kenneth Cole stop by for dinner.
Lobel's sells only retail, so Canzonero has to buy his meat elsewhere. Twice a week he travels to the Hunt's Point Market in the Bronx to pick out the best cuts of veal, chicken, prosciutto, and yes, even prime beef. ("I have a couple of fellows there who like me," he says.) Canzonero says he's seen prices climb recently, but he shrugs it off. "You spend some money, but you also get the best quality," he says. "You have to get the best for your customers."
SAN FRANCISCO In the cattle-ranching industry, Bill Niman is a throwback. The owner of Niman Ranch (NimanRanch.com) in Marin County, Calif., he doesn't use antibiotics, hormones, or anything involving an assembly line. His calves spend their first season on mother's milk, then another grazing on family-owned pastures, and they don't go to slaughter until they're 2 (nearly twice as old as most American beef cattle). Hundreds of Niman's restaurant clients around the country, including chefs Daniel Boulud and Alain Ducasse, feel the result is worth the wait.
Ask Niman about the current shortage, though, and he'll say great steak doesn't have to be prime beef. Some of the best flavors can be found in less expensive cuts of meat, he says--if a cow is raised right. "It's more interesting to have something like a skirt steak, which comes from the front quarter," he says. "The more active muscles have the more active flavor. And the flatiron is a very tender muscle of the chuck. Those are incredibly flavorful pieces of meat."
Only certain kitchens know how to handle those cuts, however. One of Niman's favorite places is the Slow Club (501 Mariposa St., San Francisco; 415-241-9390), a neighborhood spot. "It's the kind of restaurant you want to take your mother to, or impress an out-of-town guest by going to a place that's on the inside," he says. Located in the city's Potrero Hill district, the Slow Club draws a mixed crowd of tech types, staffers from the nearby PBS television affiliate, and local artists (Tracy Chapman is a regular). Most important, Niman says, "they do great things with top sirloin, tri-tip (a bottom sirloin), and flatiron steak."
Entrées range from $14 to $18, a bargain given the pedigree of the ingredients. In addition to Niman Ranch beef, the Slow Club serves vegetables that are mostly organic. And if you're in the mood for meat, you might not even need to order a steak. The most popular entrée is the $9 Niman beef hamburger, served with heirloom tomatoes, balsamic onions, and aioli. Owner Erin Rooney chuckles, "People rave about it so much that it almost makes the chef mad."