Beef Prices Rising on Higher Feed Costs, Smaller Herds

Like many commodities, beef prices are soaring because of surging demand in emerging markets, rising feed costs, and the lowest cattle herd in 53 years.

For restaurants like Texas Roadhouse , with 346 locations in 46 states, the rise in costs is hitting the bottom line hard.

The company reported earnings this week, which fell short of analysts' expectations, largely on lower margins related to the spike in prices.

Beef prices per pound are up 25 percent from this time last year.

To combat the jump, the chain has raised menu prices for the first time in two years.

The six-ounce sirloin, the company's top-selling cut, will cost 18 cents more. But, the chain openly admits it won't come close to covering the higher expenses, especially if commodity prices continue to sizzle.

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