"The price of beef? It's shocking! It's horrible," says Elsternwick butcher Ben Howe. Like many small Victorian food business owners he is feeling the pain as the price of beef soars, increasing 170 per cent in the past 12 months.
The benchmark is the Eastern Young Cattle Index that has shot from $3.20 paid per kilo of beef carcass to $4.80 today. Some foreign-owned meat processors are paying $5.40 a kilo.
Howe's point of difference is selling decent meat cheap.
Today he sells a porterhouse for $18 a kilogram, about the same as the supermarket across the road when on special. He admits there is no profit to be made at this price but also that his customers won't accept any more price rises.
"I went to the accountant the other day. My accountant told me, 'this is closing the front door material! You're going to have to put your prices up'," says Howe, drawing a deep breath.
For Coopers Pies of Yarrawonga, in Victoria's north-east, the skyrocketing price of beef is putting the award-winning pie maker's wholesale business in jeopardy.
Owner Kirsty Heather's handmade pies fill a niche in the top end of the market with beef pies selling between $8 and $9 retail.
"But we only make around 50¢ a pie wholesale," says Heather.
"We have seen the price of beef go up from around $7 a kilogram to over $9 and it is heading towards $10 a kilogram," she says.
"I am so desperate to find good quality meat. We have been going straight to the farmer and buying direct from him."
She is now contemplating asking family members if she can buy cattle from them.
Beef price increases are affecting both the top end and the fast food industry. Chef Matt Dawson, of St Kilda restaurant Republica, says: "we really should be selling our steaks for a lot more but customers begin to baulk at a steak above $40. We are sucking up the costs."
Meanwhile Melbourne-based burger chain Grill'd is feeling the heat as well. "The beef prices are making it difficult for us but we committed to maintain quality without passing costs onto our customers," a spokesman says.
This great beef hike is the result of a perfect storm that sees the drought in Queensland cutting local supply while the "once in 1200 year drought" in western USA is raising global demand coinciding with the ever-growing hunger for animal protein in China.
"The Americans are rediscovering the taste of great grass fed beef," says cattle farmer Paul Crock of grower-owned Gippsland Natural. "They are buying Australia's best cuts and shipping them over to the US and putting a local 'range-fed' label on the pack with a 'product of Australia' label," he says. "With the lower Aussie dollar they can pick the eyes out of our best cuts."
He says Chinese buyers are eager to get their hands on the traditional lesser-loved cuts that might end up in our stews and pies.
For the steak lover it's bad news. At Trialto Meats, upmarket butcher neighbour to Howe in Elsternwick, an eye fillet steak now sells at $50 a kilogram.
"We have had to put the price of our porterhouse steaks up by $7 a kilogram in the past 12 months," says owner Nino Perna. "We sell on quality and our customers understand the price increases."
Howe sits beyond sheer profit and loss.
"Dad started this business believing everybody should be able to afford to eat good meat," says Howe. "That's a fair deal isn't it?"