KANSAS CITY, Mo. – The hotter-than-hot Atkins diet is subtly reshaping the consumer food chain – putting sizzle in the U.S. beef market, while slimming demand for pasta and bread.

Hunger for beef remains strong even as cattle prices push historic highs.

The Capital Grille in Kansas City, Mo., among others, routinely “Atkinizes” orders, while neighborhood barbecue joints increasingly offer “Atkins” platters.

Kansas City attorney Jim Marsh recently peered up from the all-meat “Atkins platter” at barbeque restaurant.

“I don’t have an Atkins plan in front of me, but I’ve been following the basic diet for the last four or five months,” Marsh said. “I’ve lost 20 pounds, I can still eat beef, and I haven’t given up my cocktails, so it’s definitely OK by me.”

Such shifts in consumer choices are threatening profits for pasta and bread producers.

There’s no definitive proof that the high-protein, low-carbohydrate diet is the big driver. But mounting statistical and anecdotal evidence suggests the diet is contributing to a fundamental market shift.

After a two-decade decline in per capita consumption of choice beef, an upturn started in late 1998 and generally has continued into 2003, said James Mintert, Kansas State University professor of agricultural economics.

“You can speculate on how much of it is attributable to Atkins,” Mintert said. “But I do think there’s been some kind of underlying shift among consumers about beef versus some other products they consume, a recognition on their part that it’s OK to eat beef.”

And, Mintert said, that permission to eat beef is playing a part in the best times ever for the entire U.S. beef industry.

Feeder cattle are fetching between $100 and $110 per hundredweight, up about $20 from a year ago. Fat cattle are getting sold at about $90 per hundredweight, up from $66 a year ago.

“It’s the first time in memory that all segments of the industry have been making money,” said Mintert, who has tracked data back to the 1950s. “From the producer perspective, it’s almost the perfect storm.”

The diet, first introduced in 1972 by Robert Atkins, touts a high-protein, low-carbohydrate approach to losing and maintaining weight.

The Atkins diet and others like it were almost universally denounced in medical and scientific fields as irresponsible and based on pseudo-science.

But many started taking new notice of the diet beginning last year after a flurry of studies, including the results of two published by the New England Journal of Medicine, seemed to show that people lost more weight on Atkins than those on low-fat diets and got a boost in good cholesterol.

While the jury remains out on the scientific validity of the Atkins diet, its growing popularity is unquestioned.

Depending on the source, it is now estimated that from 3 percent to 15 percent of the U.S. population is on Atkins, and that up to 20 percent is on some sort of high-protein, low-carb regimen.

And even subtle shifts in eating behavior at the table are reaching all the way back to the feedlot.

As long ago as 1999, a commodities newsletter published by The Hightower Report in Chicago floated a theory that the Atkins diet was driving beef demand in the cattle futures trading pits at the Chicago Board of Trade.

But beef market experts say good times for the industry are not solely attributable to the Atkins diet.

Cattle herds were first cut back because of low prices and again by drought, disrupting the supply chain. And a U.S. ban of imports from Canada after one case of Mad Cow disease also is limiting supply. Meanwhile, exports to other countries are up, including to drought-stricken Australia.

Mintert of Kansas State said year-to-date, total beef imports were down 12 percent, while exports were up 8 percent.

Luke Schwieterman, who runs a commodities brokerage and feeder cattle operation near Garden City, Kan., is enjoying the good times while they last.

After years of consumers being fed the idea that beef is bad, Schwieterman is thrilled that Atkins and diets like it are encouraging people to indulge in the filets, strips and sirloins.

“It’s been a 180-degree turn, a lifting of the fear,” said Schwieterman.

“Things will probably change,” he said. “But meanwhile we’ve made some good money.”

As more people seem to be indulging in beef, more are seemingly shunning foods high in carbohydrates such as bread, potatoes and pasta.

Timothy Webster, chief executive officer of Kansas City-based American Italian Pasta, the largest pasta producer in North America, said that after years of double-digit growth, pasta consumption in the United States in the past several years has leveled off at about 4 billion pounds annually.

Webster said Atkins, in his view, was definitely part of that trend.

To counter the Atkins craze, the pasta industry is planning a public relations campaign set to start early next year that will position pasta, made with durum wheat, as a “good carb” as opposed to many other wheat-based products, typically made from hard red winter wheat.

“Our products have higher protein, lower sugar, lower gluten and metabolize much more like a pork chop than a Krispy Kreme,” Webster said.

American Italian also recently signed an agreement with the Atkins Center to make low-carb pasta made from soy to be sold under the Atkins label.

Others dependent on wheat-based products are also feeling the effects.

Kansas City-based Interstate Bakeries Corp. on Sept. 19 reported that unit sales of branded bread like Wonder were down 7.2 percent from last year, while unit sales of snack cakes such as Twinkies and Ho Hos were off 6.6 percent.

And it is not just affecting corporate giants. Matt Hake, owner of the Sammich Stop in Kansas City, said the Atkins craze had put a dent in his business.

“I’ve been doing this for 13 years, and I’ve never seen one diet have such an impact on business,” Hake said. “To counter that, I’m doing a lot more cups of tuna and chicken salad and beef sausages without the bun.”

For Mary Simpson, managing partner of the beef-heavy Capital Grille on the Country Club Plaza, Atkins has helped keep the upscale eatery open.

“It’s easy to spot who’s on Atkins,” Simpson said. “They’re the ones that send the breadbasket back.”

How long the good times will last for the historically boom-and-bust beef industry is anyone’s guess.

But Terry Roggensack, a grain and livestock analyst in Chicago and author of The Hightower Report, said he was seeing unique trends.

Although supplies are tight, he said, demand remains very strong in the face of rising prices.

However, he added, the higher prices have not yet fully worked their way to the table.

Even so, he said, the strong consumer resistance that surfaced last time beef prices hit new highs is thus far absent.

So far, consumers don’t seem to balk at paying more than $30 for their favorite cut of beef.

“Beef had bad karma, but that’s definitely changed,” Roggensack said. “We’ll have to wait and see what happens when higher prices fully hit at the retail level.”

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(c) 2003, The Kansas City Star.

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AP-NY-10-01-03 0629EDT