Chicken Market Update- Week of 2/6

Market Update

· Well the hangover from the poultry show is over and reality has set in……..there is still too much $#@!#%$ chicken out there.

· Mild weather has helped grow outs with increased bird weights and just zero demand. This means heavy discounting on breast meat and increased availability on dark meat.

· Hearing word of excess drumsticks and leg meat.

· Hindquarters were nonexistent…..now are available.

· Tenders are sloppy…….wings are still hanging tight with also whole breast seem in good shape.

· Corn prices still hover in $6.50 range, and it looks like the industry went from a little profit to back in the red. They need to get their pooh-pooh together, now with beef prices on the raise…poultry could be the value protein.

Chicken Market Update- Week of 1/30

Market Update

· Well, the national poultry convention is this week in Atlanta.....grab a beer and let's hear the B.S.

· The breast market is actually a little sick in this week of the two's. Not much demand and a fair amount of discounting. Most producers are trying to get to the convention, so they’re trying to clear and discount inventory to get the job done quick. Hard to figure what's specifically going on, because of the convention, but it doesn't look good for breast meat....but it is the week of the two's and it is still January.

· Most dark meat is still in great shape...except drumsticks.

· Most bnls dark meat is in great shape to firm in pricing.

· Wings have hit a wall finally, with the Superbowl coming up....should see some help in pricing and product becoming more available.

Chicken Market Update- Year in Review

This is the last week of a miserable year for the poultry industry. They will want to put this year behind them, and hope a for good 2012. GREED, GREED, GREED was the tone for 2011. The poultry industry assumed that their less expensive protein would garner all the demand from other proteins higher prices. They were greedy and wrong. So wrong that several of them bit the dust in 2011. Now that long overdue cut backs are in season, there is optimism again for 2012, but the GREED hasn’t left. The challenges lay ahead for the U.S. Poultry industry as demand has actually been shrinking for last 3 years and the industry has ramped up production. They are in the cross roads of the U.S. poultry industry with a fairly pathetic history of good judgment.

At least for the next two weeks, there will be supply constraints with shorter holiday weeks and demand for first of the month needs. tenders and wings are non-existent with prices moving up daily, not sure where resistant levels will be.

· Dark meat will be steady to stable and breast meat has some strength this week.

· Bone in breast is also seeing up money.

· There is a lot of optimism for 2012 and that is scary in itself.

Chicken Market Update

· Hot, Hot, Hot…..that would describe the weather and the chicken market! The weather is extremely hot in the south east and is going to get warmer. The heat index is well over 100 degrees, and there are birds dying while waiting for processing (that sounds bad! Dying before they get killed? Yikes!) Also, bird weight is dropping and cut backs are finally appearing.

· Demand is still soft, but supply is even less to offset. If demand picks up any time soon, things could get crazy!? I think by mid August, thinks could get very tight.

· Thigh meat and leg meat have bottomed and trade levels should move up in a few weeks.

· Wings are in great shape and I’m surprised they haven’t moved up.

· Tenders are moving up the most in last couple of weeks, and could be in the best shape of all.

· Overall, the market is fixing supply with demand and as we get further into the year, we may be seeing the lowest pricing for the year.

Restaurants Still Closing

Nation's Restaurant News is reporting a 1% decline (or 5,204 restaurants) have closed since spring of 2009. The biggest hit? Independents- who make up about 54% of the market- saw the largest drop. Chains lost only 164 locations, despite closings from brands such as ESPN Zone, Fuddruckers, and Uno Chicago Grill.

NPD’s CREST research service reported that visits to restaurants in the United States declined by 3 percent for the 12 months ended in May 2010. Consumer spending at restaurants fell 1 percent in that same period, the first decline in dollars the firm has reported since it began tracking foodservice industry sales in 1976, NPD said.

Independent restaurants have suffered sales and traffic declines as prolonged high unemployment has weakened consumer spending in many areas of the country, creating less revenue from which operators can fund crucial investments in marketing or equipment.

Who is still open and thriving? Burger joints and wing places are still hot. Five Guys Burgers and Fried are expanding and Wingstop reported its 28th quarter of increased same-store sales! It would appear that familiar, comfort-type foods are still in.

Further Reading:

Bloomberg on the closures.

"Better Burgers" Trend Still Strong

The Associated Press has an interesting article about the prevailing "better burger" trend. Burger joints are opening and growing around the country by following the exact opposite of the model that the fast food chains are working from. By offering a limited menu but giving customers higher quality beef and a choice of more unique ingredients, these burger joints are among the fastest niche of the food industry.

Ray's Hell Burger, also in Arlington, is not a chain, but the restaurant run by iconoclastic chef Michael Landrum earned a national profile with President Barack Obama taking Vice President Joe Biden and Russian President Dmitry Medvedev there last month. (Medvedev's review: "Not quite healthy, but it's very tasty.")

It's a market that has room to grow. Such chains represent only about 2 percent of the $65 billion burger market, said Darren Tristano, executive vice president of Chicago-based restaurant consultant Technomic.

"The traditional players — McDonald's, Burger King and Wendy's — have really shifted their focus away from burgers to breakfast, chicken and beverages," said Tristano. He predicts better burger chains will continue to have double-digit sales growth for at least the next few years.

For a look at the burger trend Pacific Northwest style, the Portland Hamburger Blog has reviews of hundreds of dining establishment's burger choices.

Industry Consultant: Restaurant Business Recovery Still Far Away

MediaPost has a great write up on the Technomic VP's assessment of the restaurant industry. Joseph Pawlak wrote in the company's newsletter that, "while things are looking better, we are hardly out of the woods."

The recent "improvement" in same-store sales is actually a slowing of decline, rather than a return to growth, he stresses. In his viewpoint, he notes that the foodservice industry lost nearly 10% of its real value in 2008 and 2009, and if it grew at a 1.1% real annual rate (the average for the past two decades), it would take nine years to regain those losses. Annual real growth of 3% would be needed to get back to the industry's 2007 peak within three years, and that rate has been seen only four times in the past three decades, Pawlak adds.

He also mentions that while places had freed up cash-flow due to an adjustment in workers and food costs, they are using it to support discounts, which have no certain benefits in the long term.

The Top Five Food Trends

The Summer Fancy Food Show just wrapped up in New York. The event- billed as the largest specialty food event in the country- showcased 2,400 vendors, and displayed 180,000 specialty foods.

Highlights included bacon pops, ice cream balls, and an assortment of current cheese celebrity- blue cheese. Oregon's own Rouge Brewery was even there to display their Caveman Blue cheese.

PRN Newswire reports that trend experts have picked the top five food trends from the show:

• Great Vinegars – Innovative flavors include: Hibiscus, Walnut Champagne, Peach Balsamic, Lime Rice, and Apple Ice Wine Vinegar.
• Indian Products – Unexpected creations: Curry Ketchup, Cashews & Cream Cooking Sauce, Tandoori Chicken Naanwich, and Tikka Masala Marinara.
• Grains, Nuts & Seeds – Sweet and savory items make up this category with Flax Seed Crackers, Oat and Corn Cakes, Pumpkin Palooza Nut Confections, and Lentil Chips.
• Squash, Pumpkin and Sweet Potato – These fall favorites are showcased in Pumpkin Salsa, Butternut Squash Pasta Sauce, Sweet Potato Butter, Butternut Squash Tart, and Sweet Potato Chocolate.
• Handcrafted Local Heritage Foods – Soups, pickles and sweets including Linekin Bay Lobster Corn Chowder, Brooklyn Pickles, Wild West Steak Rub and Sticky Toffee Pudding offer fresh takes on classics.

Further Reading:

ABC News on the Summer Fancy Food Show
The New York Times highlighted the healthy and unusual choices at the SFFS.

Restaurant Hiring Up Almost 5%

Via RestaurantNewsRelease.com:

Restaurants are expected to add 428,000 jobs this summer season, a 4.6 percent increase over the March 2010 employment level, according to National Restaurant Association projections released today. America’s restaurants are the nation’s second-largest private-sector employer and job-creator—with nearly 13 million employees—a number projected to grow by more than one million positions in the next decade.

“In these tough economic times, restaurants are playing an ever more important role in their communities, creating jobs and economic opportunity for our nation,” said National Restaurant Association President & CEO Dawn Sweeney. “Every dollar spent in restaurants generates an additional $2.05 spent in the overall economy,” she added.

Here are the top 10 2010 Restaurant Facts from Restaurant.org:

Top Ten Facts in 2010

• $1.6 billion: Restaurant-industry sales on a typical day in 2010.

• $2,698: Average household expenditure for food away from home in 2008.

• 40 percent of adults agree that purchasing meals from restaurants and take-out and delivery places makes them more productive in their day-to-day life.

• 73 percent of adults say they try to eat healthier now at restaurants than they did two years ago.

• 57 percent of adults say they are likely to make a restaurant choice based on how much a restaurant supports charitable activities and the local community.

• 78 percent of adults say they would like to receive restaurant gift cards or certificates on gift occasions.

• 52 percent of adults say they would be more likely to patronize a restaurant if it offered a customer loyalty and reward program.

• 57 percent of adults say they are likely to make a restaurant choice based on how much a restaurant supports charitable activities and the local community.

• 56 percent of adults say they are more likely to visit a restaurant that offers food grown or raised in an organic or environmentally friendly way.

• 78 percent of adults agree that going out to a restaurant with family or friends gives them an opportunity to socialize and is a better way to make use of their leisure time than cooking and cleaning up.

Two sides of the recession: dollar stores & lobster mac & cheese

Reuters has two opposing stories on consumer spending habits during the current economic climate. The first report coming from the National Association for Specialty Food Trade Show in New York this week, where vendors are quick to point out that people aren't eating in restaurants, but they are indulging in good foods to cook at home:

"People may not be buying flat-screen TVs, but they will buy lobster mac and cheese," said Cal Hancock, whose Maine-based Hancock Gourmet Lobster Co. sells the frozen delicacy. "It's the ultimate comfort food."

The National Association for the Specialty Food Trade, which sponsors the trade show, said the industry had $60 billion in U.S. sales in 2008. Fifty-eight percent of its manufacturers reported a drop in sales last year, due to economic pressures.

You can read the rest of the article here.

The second story has consumers pinching pennies all the way to forsaking the grocery store for the Dollar Tree:

The retailers are trying to steal "fill-in" shopping trips from grocers, hoping consumers will pop into their stores mid week when they run out of milk or eggs or pasta.

"Dollar stores... are an increasingly daunting threat to especially regional and neighborhood-type independent grocers," said Gary Giblen, an analyst at Goldsmith & Harris.

With many consumers losing jobs or seeing their hours cut to part time, shoppers have more time and greater incentive to compare prices and scour a variety of stores for deals.

The rest of the story is available here.

Beef: Coming back to a table near you.

The Wall Street Journal has a great article about the beef industry's fight to bring beef back to the table in a recession:

The National Cattlemen's Beef Association and its Beef Promotion and Research Board have ramped up efforts at grocery stores to lure consumers who have become less inclined to visit restaurants. For example, the industry this year will hand out 60 million coupons valued at $1 or more for beef purchases, up from 10 million coupons last year.

The industry also recently introduced an online education program designed to teach consumers how to be their own butchers at home so they can harvest cheaper cuts. For example, they'll learn how to cut steaks from a tender roast or cut beef kebobs from a sirloin steak.

Similarly, a "Bargain Beef Bundles" program is designed for shoppers who want to buy beef by the side or the quarter to store in their home freezers.

And if the falling price of traditionally expensive cuts isn't prompting consumers to open their wallets (see graph, from the Wall Street Journal) they are promoting new thrifty cuts of beef that have only bee on the market for a few years:

The Denver Cut- cut from the chuck roll area. Beef Innovations Group calls it juicy, tender and generously marbled. It made it's debut last year from the Kansas City Beef Council. Consumers are catching on, too- here is one person's post about grilling them up at home.

The Western Griller & Western Tip Steaks- AKA bottom round and tip steaks. Beef Innovations Group calls it big on size and flavor. Here is a recipe for ginger-lime beef steak that uses Western Griller steaks.

Country Style Ribs- are described as boneless and perfectly portioned.

The Denver is being tested in restaurants while the ribs are popping up in grocery stores. And according to the Wall Street Journal, some familiar cheap cuts of beef are being renamed to be more appetizing to the public:

In recent months, Cargill Inc., which owns one of the nation's biggest meatpacking companies, has begun trying to make some low-value beef cuts sound more appetizing. Thus, a piece that butchers have long called "flap meat" is being recast as "Cordelico Sirloin," while "ball tip" has been rechristened "Cabrosa Steak."

Further Reading:

The Leader-Post on the beef industry bashing the new health study findings.

The High Plains Journal on beef demand.

The Weekly Times Now on positive meat sales.