The steak economy is more than just high prices

I LIKE writing about restaurants and dining out. Every so often, however, I get reader mail objecting to what they describe as boulevardier columns. Give us business, market analysis and serious stuff, not a description of what’s on your plate, they say.

I politely respond that they don’t have to read my puffery and refer them to the work of my astute and eloquent colleagues. But I do wonder if those readers get what I’m trying to do. Among many other things, I’ve written about the nature of money by way of a gourmet cash-only restaurant; examined the business strategy of the menu upsell on Valentine’s Day; and examined why diplomatic skills are necessary for startup eateries.

Restaurants and food may seem anchored in culture and social trends, but they’re entry points to business ideas and economic processes. Markets – like armies – march on their stomachs.

So, on to the meat of this story – the meaning of steak, for those of us who celebrate it. I love grilled beef: The combination of bovine tallow and scorching fire is like no other olfactory sensation. Indeed, in the book of Leviticus, it is described as a sweet and soothing aroma so pleasing to God that it is reserved for sacrifice. Not too long ago, I was able to consume a sizeable beef chop all by myself, gnawing on the bone and savouring all that divine blubber. But those days are gone, along with low cholesterol levels and any pretence at a boyish waistline.

All that red meat’s tough on my budget: Prices seem to do nothing but rise. In San Sebastian, Spain – where I was just on holiday – a txuleta, the massive rib steak the Basque country is famous for, required a 95-euro (S$143) supplement at lunch at one of the city’s more famous restaurants. That’s about the same price per kilogramme for the same cut at Elkano, an even more celebrated spot just outside the city.

Here in London, the price of a 450g rib-eye has gone up by almost 10 per cent since last year at a prominent steak chain, to £57 (S$97). To be fair, each of the Spanish offerings can feed three to four people. And the London rib-eye can feed two. I should stop thinking only of myself.

The costs reflect deeper economic realities. There have been some dramatic downturns, including the recently reported multi-million dollar losses at Nusr-Et – the chain of restaurants founded in 2017 by the salt-sprinkling Nusret Gokce, aka “Salt Bae”, the steampunk-shades wearing former Internet sensation. That enterprise was likely tripped up by price gouging, over-expansion, the transience of celebrity and steeply declining bang-for-the buck. But the inflation in steak prices goes well beyond this one gimmicky purveyor.

In the US, the rising price of beef – more than 16 per cent for steaks since September 2024 – has caused so much grief that the Trump administration proposed quadrupling the quota for imports from Argentina to increase supply and alleviate costs. It was part of a US$40 billion economic lifeline to far-right Argentine president Javier Milei – a fan of the US president – who then triumphed in his country’s midterm elections.

The US is already the largest foreign investor in Argentine agriculture, so some Americans are likely to profit from the deal. But many other Americans were furious, including cattle-raising Maga supporters, who were the beneficiaries of rising domestic beef prices but unable to increase supplies.

American ranchers are facing a generational crisis. According to one estimate, the average US cattle producer is more than 58 years old. That rancher cohort is shrinking and, as family enterprises shut down, reductions in herd sizes and the supply of meat ensue.

It’s a similar situation in other countries. “The average age of a beef farmer in the UK is 59,” says Nemanja Borjanovic, who runs the British beef importer Txuleta (his mouthwatering Instagram account is “mr_txuleta”). “To make things worse, the number of beef farmers under the age of 35 is 2 per cent. It is a dying trade, with young people either abandoning the farms or choosing other careers.”

Intriguingly, Argentina – while still having a large number of family-run ranches – is increasingly dominated by the consolidation of beef-production by companies that control more and more of the country’s farmland. Among the players is Brazil’s JBS NV – listed on the New York Stock Exchange – which in 2007 purchased the US meatpacker Swift & Co and its subsidiaries overseas, including in Argentina.

Last year, Brazil provided about six times more beef to the US than Argentina. However, 76.4 per cent tariffs are likely to affect supply and price. Its decidedly left-wing president, Luiz Inacio Lula da Silva, is unlikely to win a deal similar to Argentina’s Milei. But I can see how Brazilian agri-industrialists might benefit from Trump’s handout to Buenos Aires.

If this tangle of geopolitics makes you want to give up beef, there are some plant-based solutions available, though consumer appetite for tweaked soy or pea extrusions has waned in the last five years. The recent 1,000 per cent spike in Beyond Meat share prices had more to do with a revival of meme-stock insanity. As for the brave new world of lab-grown meat, I’ll find that kind of Frankenstein approach attractive only if the underlying protein was Jacob Elordi.

The truth is, beef is a difficult and therefore precious resource, as its age-old religious appeal attests. Cattle aren’t as productive and efficient as the chickens of contemporary industrial poultry farming. You can’t flip a switch and immediately increase supply.

It takes a cow 280 days to produce a calf – practically the length of time of human gestation. And the mammals need land, lots of land, to roam and thrive. The best meat, too, is often from retired dairy cows, with several years on them.

All that just makes beef especially valuable in a world where the well-off want to show off what they can afford. Thus, despite the collapsing fortunes of Salt Bae, expensive steak houses from Spain to Las Vegas will continue to attract tech bros and their finance buddies. And prices will stay high.

Perhaps the current big-spending masters of the universe need a visit from a new Prometheus. In Greek mythology, the fire-stealer – and benefactor of humankind – covered a pile of bones with beef fat, all arranged in shimmering beauty. A separate pile contained most of the meat of the slaughtered animal but monstrously displayed under a bunch of offal.

Prometheus then asked which pile Zeus and the gods preferred as sacrifice. The chief of Olympus picked the pile of bones. The trick left mortals with nutritious meat. As for the gods, let them eat fat.