News Update
January 3, 2012
Jan. 3 Daily Livestock Report by Steve Meyer and Len Steiner
2011 ended with a piece of good news as the National Restaurant Association’s Restaurant Performance Index (RPI) for November hit a five-month high, indicating a continuing rebound for the foodservice sector. The index, which represents several key factors affecting the restaurant business hit 100.6 in November — 0.6 points higher than the October level and 0.7 points higher than one year earlier. The index is constructed such that values above 100 indicate expansion of the sector, while those below 100 indicate contraction. After recovering to growth levels in late 2010, the index indicated that the sector had struggled to maintain that momentum this year with values for May, July and August falling under 100. November marks the third straight month of RPI values of 100 or more.
The RPI is composed of indexes of the Current Situation and Expectations. The Expectations Index virtually always leads the Current Situation Index, often by several points. That gap had disappeared this past summer as restaurant operators’ views of the future were dampened by the slowing economy. Those expectations have improved significantly since August, with the Expectations Index reaching 100.9 in November. The Current Performance Index hit 100.2 in November, its highest level since June.
The primary driver of both major index components in November was same-store sales. That factor stood at 102.2 in the Current Situation computations, its highest level since June 2007. November sales performance quite understandably pushed expectations of same-store sales sharply higher as well, with that component reaching 102.9. Does the “best since the recession” number for November indicate a real change in the restaurant sector? Only time will tell, but hitting a level higher than had been seen at any time during the tenuous recovery is encouraging, especially when the number is based on actual performance and not expectations.
All in all, the November RPI data is a great way to start the New Year!
Demand indexes also indicate that U.S. beef, pork and chicken demand are maintaining year-on-year increases as of October. The indexes represent overall domestic consumer level demand for each protein since they are based on per capita consumption and real retail prices. “What about foodservice product?” is a usual, and legitimate, question when we mention that retail prices are used in the index calculations. The retail price is used for two reasons. First, there are no data for the price of foodservice protein components that, to our knowledge, are publicly available. Second, the retail price should be a shadow value of product sold through foodservice in that any increase in foodservice volume will reduce the volume available through retail outlets and thus push retail prices higher. If readers see the latter as rationalization, we will have to plead guilty. The fact remains that no other data are available.
The trailing-12-month indexes for both pork and chicken declined when October data were added as the October year-on-year index changes for both species were negative. Chicken demand in October was 6% lower than in Oct. 2010, while pork demand was down 4.6%, Oct. 2010 to Oct. 2011. The Oct. 2011 beef demand index was 0.9% higher than one year earlier.
Workshop to Help Farmers Start, Expand Agritourism Ventures
Farmers who want to start or grow an agritourism operation can learn about traditional and innovative ways to get the most out of their time, skills and dollars at the Indiana Horticulture Congress’ Agritourism Preconference Workshop.
The Jan. 17 workshop at Wyndham Indianapolis West Hotel will include sessions on legal issues, social media, traditional media relations and developing an effective marketing and communications plan on a budget.
Speakers will include Rocky Walls, chief executive of 12 Stars Media Productions; Jeremy Williams, interactive production manager for the Indiana Office of Tourism Development; and Greg Marlett, president of the board of the Morgan County Farmers Market and owner of Hard Way Farms.
There will be sessions on Indiana’s new agritourism limited liability law, a new agritourism direct marketing association for Indiana, marketing through Facebook and other social media, and creating affordable and engaging online videos.
An afternoon panel discussion will highlight best practices in media relations, and the day will end with an agritourism roundtable discussion. Attendees will be able to meet with other agritourism professionals during breaks.
To register, visit http://www.regonline.com/Register/Checkin.aspx?EventID=984240. There is a reduced fee for anyone registering before Jan. 9.
The workshop is part of the annual Indiana Horticulture Congress and Trade Show, a three-day event featuring exhibits and presentations on current agriculture topics. Attendees have the option to register for only the workshop by selecting one-day registration on the website.
In addition to Purdue Extension, the Horticulture Congress is sponsored by the Indiana State Department of Agriculture, the Indiana Cooperative Development Center and the Indiana Office of Tourism Development. For more information about the full conference, visit http://www.inhortcongress.org. The Wyndham Indianapolis West Hotel is at 2544 Executive Drive.
Beef Makes it Big on Wheel of Fortune
A group of South Dakota beef supporters has been successful in getting $1,000 in Beef Bucks on the Wheel of Fortune game show. Beef Bucks are pre-paid checks or debit cards for purchasing beef at restaurants and grocery stores. Beginning Jan. 9, this prize will appear as one of the gift tags on the colorful carnival wheel contestants spin for prizes during the popular, nationally syndicated television program.
Landing a spot on Wheel of Fortune was an exercise in tenacity and dedication for those who direct Beef Bucks Inc., a nonprofit, South Dakota-based organization with the primary purpose of promoting beef and teaching consumers about beef nutrition and cooking. Bob Montross, a beef producer and one of eight Beef Bucks directors, said the effort to get accepted as one of the gift tags began nearly two years ago as he watched the program. Although the first episode already has been taped, Montross said he, just like other viewers, will have to wait until it airs Jan. 9 to see if a player wins the $1,000 in Beef Bucks.
Beef Bucks Inc., has sold more than $1 million worth of beef-only checks and reloadable debit cards since its inception in 1997. The Beef Bucks have been used in more than 40 states and are available at www.beefbucks.org.
China Bans Ractopamine Growth Promoter
China’s Ministry of Industry and Information Technology has announced that the country has banned the production and sale of ractopamine, a controversial feed additive used to promote lean meat growth in food animals.
The ban already became effective on Dec. 5, according to a document posted on the ministry’s website Dec. 24.
The order came after a major pork contamination scandal hit China this spring when the Shuanghui Group, China’s largest meat-processing company, was found to be purchasing pigs that had been fed with adulterated pig feed, prompting a national crackdown on the use of what’s called “lean meat powder.”
Yu Kangzhen, China’s chief veterinary officer, said that “lean meat powder” includes around 10 kinds of categories such as clenbuterol and ractopamine.
Major markets, including the United States and the European Union, banned the use of clenbuterol in the late 1980s due to its dangerous side effects such as nausea, dizziness and headaches.
Later, U.S. firms developed another kind of growth promoting chemical, ractopamine, which carries minor toxicity. Currently, ractopamine is still allowed to be used as a feed additive in around 20 countries, such as the U.S., Canada, and Mexico.
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