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News in Review
Market Reports
Food Quiz
Industry Discussion
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Food Cost Control ROI
By: Joe Dunbar
If you've invested the time and money to build a food cost management system, this year will give you an above average return on investment. The reason your ROI will be higher is the edge may keep you in business. Many of my clients have seen their sales decline from 2007. Certainly, everyone has seen an increase in their cost of sales. Energy costs are soaring and the impact is seen in every delivery.
Management's #1 challenge is to survive 2008. Once a solid short term strategy is in place, the entire organization can work together to meet weekly goals.
In the longer term, many companies will emerge stronger and with fewer genuine competitors. If you follow the industry news, you've seen plenty of failures. Stale concepts and red hot brands have faltered. The future will be quite profitable for companies with profitable business models today.
The ROI from an investment in a food cost management system is greatest now - in a downturn. The reports you see each week give you an edge. This edge could be the difference between a profit and a loss. Reports which show price fluctuations are very useful. While your competition sees higher food cost percentages, you will understand these increases better. Menu analysis and recipe costing tools help with pricing decisions.
What is the impact of a smaller portion option? How are my top 25 items performing this year? If I raise prices, should I do it across the board or on specific menu items? Reports from your food cost system will help...
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Outstanding leaders go out of their way to boost the self-esteem of their personnel. If people believe in themselves, it's amazing what they can accomplish.
- Sam Walton
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View updated pricing and information each week on the website for the following food-commodity markets:
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Beef, Veal & Lamb |
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Beef production last week rose 2.4% but was 3.5% less than last year. September beef cow slaughter was 31% greater than the prior year but beef trimming prices have remained well above 2007 levels due to a slowdown in imports and strong trimming and grinds demand. If the dollar valuation continues to appreciate, beef imports could expand in the coming months which would be bearish for trimming prices. However, strong demand is expected to support trimming prices above year ago levels into the winter. Prices per pound FOB from USDA.
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Dairy |
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September dairy cow slaughter was 12% greater than last year. Recent dairy cow slaughter gains have slowed but an announced herd retirement program should bring a boost to dairy cow slaughter next month. Reductions in the dairy cow herd may be bullish for dairy prices as 2009 progresses. The current CME cheese markets are relatively weak but recent history indicates that notable additional declines are not likely from here. The butter market typically trends downward in November. Prices per pound, except Class I Cream (hundred weight), from USDA.
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Poultry |
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Chicken production cutback plans continue to intensify as the 6 week moving average for broiler egg sets is now 7.3% less than the previous year and the lowest level for the date since 2002. Chicken production this winter could trend close to 5% below prior year levels. This factor and seasonal upward pressure may lead to significant chicken breast market increases. The last time broiler egg sets trended below the prior year level during the fall (2006) the boneless skinless chicken breast market rallied 21% higher from December 1 through the end of January. The wing markets are firm. Prices USDA, FOB per pound except eggs (dozen).
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Seafood |
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The snow crab leg market remains fairly firm. History indicates that the existing inflated snow crab leg prices may persist through the winter. The whole salmon market could move modestly lower during the next few weeks due to sluggish demand. Thereafter, holiday season demand could pressure salmon prices moderately higher. Prices for fresh product, unless noted per pound from Fisheries Market News.
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Pork |
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Pork output last week declined 2.4% and was 1.8% less than the previous year. The September US and Canada total hog and pig (.2%) and breeding (3.7%) inventories were less than last year. The breeding herd was the smallest for the date since 2004. Breeding herd reductions should cause pork output to track below the prior year levels this winter. Ham prices typically move upward soon due to holiday season demand. Last year the ham market rose 10% during the next 2 weeks. September 30th ham stocks were 1% less than 2007. Prices per pound FOB from USDA.
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Produce |
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Tomato prices are beginning to trend upward as Florida shipments remain well below a year ago and California production is expected to decline in the coming weeks. The Florida tomato harvest could be especially limited as the fall progresses due to earlier crop challenges. Thus additional tomato market increases may be impending. Lettuce demand has reported to have softened some due to the surge in market prices earlier this month. The main lettuce harvest area will shift again in a few weeks which could cause relatively inflated lettuce prices to persist. Prices shipping point unless noted (terminal) FOB from USDA
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Oil and Grains |
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The USDA recently adjusted their corn (down 8% from 07) and soybean (up 10% from 07) harvest forecasts for the current crop. The grain markets remain volatile. Prices per pound (oils) or bushel (grains) FOB from USDA.
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Canned and Frozen Food |
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Tomato Products, Canned - Whole peeled and diced tomato stocks are relatively short due in part to strong demand and harvest/production challenges in the East. Steady to higher canned tomato prices are anticipated. Price per case (6/10) FOB from Supply and Market Report.
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Processed Fruits and Vegetables - September 30th frozen green bean and green pea stocks were both 2% larger than last year. Frozen cut (2%) and cob (1%) corn inventories were less than 2007. The markets remain relatively firm. Prices FOB per case from Supply and Market Report.
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Orzo Pasta
Community member Tom102389 writes...
I have a large catering job in a hall with limited cooking options. A side dish is orzo pasta. I'm thinking I will need to cook and hold this earlier in the day. How long can I hold it? Will it turn to mush? ...
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Creative Menu Idea
Community member Mike D writes...
Need help with a new menu concept i'm trying to conceive. I operate an open air resturant in the south and though the weather is usually good in mid july and august it is down right awful. So we've come up with one way to help our customers. We are working on a menu that also doubles as a fan. So far our searches have come up rather pricey and not exactly what we are looking for.
I'm wondering if anyone has come across a vendor or company that specializes in menu concept and has...
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Cash flow tips in restaurant/catering
Community member RestaurantAnalyst writes...
BurgerMan invited me into the forum to ask you experts for advice: do you have specific strategies you use to boost cash flow in your restaurant? In this environment seems it might be quite important for survival. For example, does it help free up cash if you drop certain menu items that don't sell well? (Therefore you wouldn't have cash tied up in inventory of items that don't sell well.) Or is it possible to stretch out payment times with food suppliers? Or are suppliers in fact requiring quicker...
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Ready...Set....Go!
Bourbon, Whiskey, Pop, Blue, White, Yellow, Bi-Color, Fritter, Pone, Sticks, Cob, Dodgers, Hominy, Hush Puppy, Flakes, Pudding, Bread, Meal, Syrup, Dent, Flint, Sweet, Flour, Posole, Tamales, Baby, Black, Aztec, Dog, Y, Teosnite, Husk, Peruvian Morado, Mayo Batchi, Bloody Butcher, Trucker's Favorite White, Lancaster Surecrop, Rhode Island White Cap, Parching Lavender, Papago, Texas Shoepeg, Schroeder's Black, Chocolate Cherry, Calico, Strawberry, Indian, Iopop, Peppy, Reventador, Butter and Sugar, Honey and Cream, Peaches and Cream, Honeymoon, Quickie, Twice-As-Nice, Hooker's Sweet Indian, Midnight Snack, Stardust, Platinum Lady, Country Gentleman, Howling Mob, N.K. 199, Bodacious Miracle, Sugar Buns, Golden Midget, Orchard Baby, Smut, Starch and on your feet.
What am I?
The Food Quiz has is brought to you by Culinary Specialty Produce, a specialty produce broker that scours the world for the very best in specialty produce. Contact them at 908-789-4700 or by sending an email to info@culinaryproduce.com.
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