Steakhouse Diners Feeling the Bite as Prices Rise .

To hike or not to hike? That is the question facing steakhouses and restaurants as they continue to face steep price increases in food costs, particularly beef.

Peter Glazier, chief executive officer of the Glazier Group, which owns Michael Jordan's The Steakhouse N.Y.C. said he will be deciding in the next few weeks whether or not to raise his menu prices.

"We're at $44 for a strip steak," he said. "We're thinking of raising it two or three dollars."

While the Midtown restaurant hasn't raised steak prices recently it did reduce the portion size of a strip steak last year, from 16 to 15 ounces, he said.

Across the city restaurants are struggling to adjust to commodities price increases that aren't going anywhere but up at a time when the industry is still recovering from the effects of the economic downturn.

Some restaurants have instituted price increases or are considering them. Others are reducing portions or diversifying menus with different proteins, bigger sides or more affordable cuts of beef.

At the Water Club, chef Aaron Bashy took the rib-eye off the menu a few months ago when the price of prime rib-eye reached over $13 a pound.

At Tertulia, chef and owner Seamus Mullen said the price of the 48-ounce prime rib—the only beef on the menu—went up $10 to $92 last week.

And at Uncle Jack's Steakhouse, owner William Degel said the rib-eye and New York strip have both gone up $10 to $55, while the porterhouse for two nudged up $5 and filet mignon, $2.

Beef prices have climbed about 30% over the past two years and roughly 10% from February 2011 to February 2012, said Joseph Pawlak, a vice president at Technomic, a Chicago restaurant research and consulting firm.

"We see it continuing at least for the next several years," said Mr. Pawlak.

The price bite is the result of a lower supply of cattle due to higher feed costs, an increasing amount of beef being exported to emerging economies such as China and higher fuel prices.

"Five years ago a lot of ranchers reduced their herds because of costs," said Mr. Pawlak.

George Faison, an owner of DeBragga & Spitler, a meat purveyor in Jersey City, said his customers are buying more affordable cuts of beef or asking them to leave the bone in meat so portion sizes appear bigger to avoid raising prices.

"The typical rib bone is 5 to 6 inches in length so they'll ask to leave it 8 inches in length," he said. "You're not getting more meat…the plate appearance is more dramatic."

Restaurants owners are starting to get creative.

"I think we're going to see some new cuts being featured," said Clark Wolf, a restaurant consultant, mentioning hanger steak, as an example.

Mr. Bashy of the Water Club said he's working to develop relationships with farms and dealing directly with them, rather than going through a meat purveyor, to cut costs.

Marco Canora, the executive chef and co-owner of Hearth restaurant in the East Village, said he's had to make adjustments, like adding less expensive cuts of meat in combination with pricier ones. He said the across-the-board increase in food prices has him exploring a different menu format altogether, where instead of having appetizers and entrees you categorize items as meats or fish or salad.

"We're starting to hit that $16 to $18" mark for appetizers, he said. "I'm very fearful to go over the $20 mark. But if I want to use and do certain things, I don't have a choice. With the entree side, we're playing around with $30 to $34. I really don't want to start going to $38, and the $40 mark is scary to me."

He's playing with the idea of charging $16 to $24 and adjusting the sizes accordingly.

The smaller-plates menu format that is popping up at many restaurants, he said, is not necessarily a "cool trend."

"I think it's a product of the fact that things are getting too expensive," he said.

Mr. Mullen of Tertulia in the West Village said sales of the prime rib—which was about $72 when the restaurant opened in August—have fallen since its price was raised to $92 about a week ago. The choice, he said, was between scrapping the menu item or raising the price.

"We were kind of at the point where we didn't have a choice but to raise the price of our steaks," he said. "The cost to us has gone up astronomically. We raised it by not even 10% but our costs have gone up 30%."

"I'm not making any money on my steak," he added. "I'm breaking even on it."