Prime Beef Is in Short Supply

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JUST when restaurants are doing everything to attract customers, Peter Luger Steak House in Williamsburg, Brooklyn, is purposely turning them away.

The owners are serving only people with advance reservations, not drop-ins; they are taking nobody after 9:45 p.m.; and, for the first time, the restaurant, which is open 364 days a year, may close on Memorial Day and the Fourth of July.

The problem is that the supply of prime beef has plummeted over the past month or so. Restaurants and butchers are scrambling to stock up, or are making do with lesser cuts, and, some say, are not always telling the truth about what they are serving. It is a nationwide problem, felt most keenly in New York, which gobbles a huge proportion of this country's prime beef.

"We could easily turn more tables," said Marilyn Spiera, the president of Peter Luger. "But we are not getting enough of the kind of prime beef we serve. The real crunch in top-quality beef started a few weeks ago. We refuse to dilute our quality. The only solution is to ration what we have and cut business."

Dealers say a rough winter out West meant that fewer cattle went to pasture, reducing the supply. And with the economy bad and money tight, ranchers are sending the animals to the slaughterhouse sooner so that they can get their money faster and spend less on grain. Fewer animals that might yield a big, thick, juicy, well-marbled, sublimely tender porterhouse are going to market.

"They're brought forward as much as 40 days now," said Bobby Hatoff, president of Allen Brothers, a Chicago wholesaler. "They're lighter." Usually, a steer is slaughtered at 18 months, after six months in the feedlot for corn-fed beef, the kind most steakhouses serve.

The shortage comes as demand has been steadily rising. Richard Abeles, an owner of Milton Abeles, a Mineola, N.Y., wholesaler that handles only prime beef, says his business has grown 30 percent a year over the past five years as more steakhouses have opened and attracted more than hungry men with cigars, and as more people have been trying the Atkins diet. But his supplies are tight, too. "I've never seen it like this," he said. "It's the scarcest it's been in more than 30 years."

Even when conditions are good, only about 3 percent of the graded beef sold in the United States qualifies as prime. Today, most experts say, less than 1 percent is prime. Since within the grade there are different quality levels, depending on marbling and the size of the steer when it becomes steaks and roasts, only a fraction of the prime grade will satisfy places like Peter Luger.

Though steakhouse owners and meat buyers complain that prime beef has been much harder to obtain and that the price has gone up, most are not sacrificing business. Unlike Peter Luger, which serves only dry-aged porterhouse and bone-in short loin cuts — and buys 10 tons a week — other places also offer filet mignon, rib-eye and T-bone steaks.

Instead of reducing the number of servings, some may be compromising. Or cheating. It's easy to substitute choice for prime, especially with naturally tender cuts like filet mignon.

Chris Gachot, co-owner of Gachot & Gachot, a New York wholesaler whose customers include Peter Luger, said his company was allocating prime beef to its best accounts. "Some high-end restaurants have switched to dry-aged top choice from prime," he said.

Wholesale prices are up 15 to 25 percent in the past week, depending on the cut. The major steakhouses have not yet raised their prices, though some are considering it. They hope the situation will ease soon.

Bryan Dierlam, director of legislative affairs for the National Cattlemen's Beef Association, a trade group, said the situation was not extreme. He said there were usually fewer cattle available for slaughter in the spring before they have fattened up in the feedlots. "In the next few weeks, the numbers should be up," he said. "There should be recovery as we get into summer."

At Fairway Market, Ray Venezia, the meat buyer, said the producers had not anticipated a crunch. "The shortage of prime has affected choice, and you'll see more and more of the big chains advertising select now," he said, referring to the grade below choice. Fairway has raised prices for prime beef by about 20 cents a pound, and Mr. Venezia said that it was now letting the cost cut into profits.

Stephen Jones, owner of the Knickerbocker Bar and Grill, said the price he paid for choice had gone up about 25 percent, to more than $5 a pound wholesale, and would probably force him to consider increasing the menu price for a T-bone from $29.95 to around $32. "This is a bad time to raise prices," he added.

Grain-fed beef from heavier animals, which is usually the best, is scarcest of all. Ken Aretsky, the owner of Patroon, said his friends in the industry were all complaining that quality had been off lately.

"The situation is complicated because there's no meat coming in from Argentina because of hoof-and-mouth, and none from Australia because they've had a drought," said Charles Gagliardo, the buyer for Citarella stores, "so all the pressure is on American beef."

The discovery of mad cow disease in Canada is a further complication.

Like a number of buyers, Mr. Gagliardo said he had been well taken care of by suppliers because of longstanding relationships, but he's not sure how long the situation will last. "I don't know how the little guys are managing, unless they're cutting standards," he said.

Some of the larger steakhouse chains have been cushioned. The Morton's of Chicago chain, with 65 restaurants around the world, contracted for all its 2003 beef last December. "Our cutters gave us the heads-up," said John Bettin, the president. The Smith & Wollensky chain also pre-ordered its beef, as did the Palm restaurants.

Stanley Lobel, an owner of Lobel's, the fancy butcher on the Upper East Side, said his clientele would not cut their standards as grilling season began. "My customers will only accept prime, and they don't ask the price," he said. If he cannot obtain enough prime beef, Mr. Lobel said, he will sell wagyu, or Kobe-style beef from American cattle, for the same price as prime, $32.98 a pound, trimmed, for porterhouse steak.

Mrs. Spiera of Peter Luger said she was first told the situation might improve in a few weeks. That may be optimistic. It's anyone's guess how soon supplies will rebound.