The cost of beef has skyrocketed in 2022 thanks to the impact of inflation.
From hamburger to filet mignon, the cost is through the roof versus what anyone paid just a year ago, much of it due to the disruption to supply lines thanks to the pandemic and then spiking in various commodities that impact both production as well as distribution, ranging from vehicle fuel to the cost of labor.
Had anyone been asked what a good tri-tip steak would have cost in the grocery store in 2019, the cost would rarely get above $30 for an extremely large cut. However, today, that same steak is easily over $50 if not higher.
The same steak in a smaller portion cooked and prepared by a restaurant easily costs almost twice more.
Why Does Steak Cost So Much?
Even before the most recent cycle of inflation manifested in 2022, steak was not a low-cost form of protein.
However, the pricing of steak depends on a number of factors, including everything from the type of cut and location of where the beef comes from on a cow to how it is prepared to the store that sells it or the restaurant that prepares it.
The first major factor is the cut. Some are far more tender and softer than others. This is a big reason why a sirloin steak will be half or a third of the cost of a tri tip.
Some very good steaks for feeding a family can be had at lower costs, such as a London broil, but they will take a bit more work to eat and chew than the softness of a filet mignon.
The reason is that the tougher steaks are cut from the working muscle while the softer, tender steaks tend to be marbled with fat and therefore taste much better when cooked.
The next big factor is grade. Top grade quality A steak represents the finest meats available for consumers and the price reflects that. Grade B meats are usually used as stock for soups or stews, and lower tend to be ground up for filler in other food mixes.
Finally, sourcing will impact price as well. Steaks that come from well-known ranches will command a higher price because of their consistent quality than those steaks produced generically.
What Drives the Cost of Steak?
The cost of a prepared steak mainly depends on whether one bought it from the grocery and did all the work, or whether the diner went to a restaurant instead.
A tremendous amount of markup goes into a steak bought in a restaurant to cover the business’ overhead, labor costs, materials, cost of the food, and profit margin.
While a sirloin steak from the butcher might cost $21 for 3 sirloin steaks, a Chicago diner will today pay that price for one cooked sirloin steak with two small sides of vegetables. The Outback restaurant is a great example of this markup, being one of the best well-known steakhouses nationally.
Will the Cost of Steak Go Down?
If the current inflation level gets resolved, one could expect a drop in current prices to the tune of anywhere from $5 to $15, depending on the steak and how it is obtained. Much will depend on demand and what people are willing to pay.
For example, the only reason steaks don’t cost $100 today is that no one is willing to pay that much for them. However, as long as inventory continues to move, price points will only go as low as necessary, both in grocery stores and restaurants.
How to Offset the Cost of Steak?
One of the big ways to score really good prices on steaks is to stock up on the run just before big holidays. First, skip the restaurants. Second, don’t go looking in big box stores. Instead, many grocery stores will discount untrimmed steaks considerably to move stock and boost cash flow. Untrimmed is basically a steak with the fat shoulder still attached.
A quick cut and trim at home before cooking solves this issue. These deals right now bring the price of a grocery store steak down to the average price that was in place before COVID arrived with inflation.
While these sales are temporary, for only a few days, one could take advantage of them and stock up, putting the extra steaks bought in the freezer, which will be fine for eating for at least six months after.
While there won’t be a 50 percent off sale on steaks anytime soon, some good planning could keep steaks affordable for you while everyone else is paying through the nose.