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News in Review
Market Reports
Food Quiz
Industry Discussion
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Leveraging Your Investment in Food Cost Control
By: Joe Dunbar
The current economy presents a once in a lifetime opportunity for the operators who have an effective food cost control system in place. Imagine adding rampant commodity price increases to an out of control food cost mess. Can you picture the meetings in operations with soaring food prices, theft, poor ordering, waste and lousy portion control? Obviously, the managers who were already abusing the lax system will contribute all the bad news to the market conditions.
If you are on top of your costs, you can see the usage variances and the rate variances and put each in perspective. You have an enormous advantage over many of your compeitors. Many operators are avoiding the tough issues and calling attention to the rise in corn prices. Certainly, corn price increases have fueled a quantum leap increase in many food stocks. However, at this time corn prices have been trending lower and many companies are losing money despite menu price increases.
The companies who recognize the opportunity offered by their tight cost controls will prosper in difficult conditions. Look at McDonalds. Their stock is up over 15% in the last 365 days. They have always employed a tight cost control environment. Their perceived menu value and tight cost controls put them in the driver's seat.
Contrast the value menu concepts with the upscale, casual dining segment. How would you like to manage an upscale casual restaurant with the cost of sales completely out of control? Look at the industry press and you will see plenty of failures.
So you are in control. How should you take advantage of the weak competition? I would offer tremendous value to your guests. Use your advantage to make sure the competition isn't even close to making their menu a value proposition. Don't play games with menu prices and don't beg people to...
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We are not animals. We are not a product of what has happened to us in our past. We have the power of choice.
- Stephen Covey
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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 output last week declined 1.3% and was 5.1% less than a year ago. Cattle futures have fallen sharply during the last week which should enhance beef producer margins and bring a modest boost to beef production. Consequently, it is anticipated that many beef markets are at or at least near a top. Lower beef prices could be forthcoming over the next few weeks. Due to the recent appreciation of the US dollar more imported beef is becoming available which should be bearish for the beef trimming markets. Prices per pound FOB from USDA.
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Dairy |
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October US milk output was 1.2% more than last year due to a 1% larger milk cow herd and a .3% gain in milk per cow yields. The milk cow herd size during October did not change from September however milk cow herd reductions may be pending. The CME cheese markets continue to move higher but the trade is expecting cheese prices to turn downward shortly. Lower butter prices may be coming next month as well. September butter exports were 11.3% less than the previous year. Prices per pound, except Class I Cream (hundred weight), from USDA.
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Poultry |
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September US chicken exports were 25% larger than last year despite a 21% decline in trade with Russia and China/Hong Kong. Chicken exports as of late have been struggling causing the chicken leg quarter market to fall drastically. If chicken exports are poor in the coming months it will force the need for US producers to get more value from the breast and wing. Thus it could be very bullish for chicken breast and wing prices. The 6 week moving average for broiler egg sets is 8% less than last year. Significant chicken output cutbacks are expected this winter. Prices USDA, FOB per pound except eggs (dozen).
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Seafood |
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September US shrimp imports were 6% larger than last year with 6 of the top 7 shrimp exporters to the US all increasing trade during the month. Fairly strong US shrimp imports could persevere due to the appreciation of the US dollar. This factor and a struggling US economy may be especially bearish for the shrimp markets in the coming months. Prices for fresh product, unless noted per pound from Fisheries Market News.
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Pork |
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September US pork exports were 42% larger than the same month a year ago but were 11% less than August and the smallest for any month since December 2007. Pork exports are anticipated to trend below year ago levels next year. Russia recently announced that they are cutting their pork import threshold from the US by 40%. This could be bearish for pork trimming prices. The belly market is trading near key support levels. History suggests that the belly market could trade near $.70 through the end of January. Prices per pound FOB from USDA.
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Produce |
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The lettuce markets are firming. High winds and warm temperatures are reported to be impeding growth for the lettuce heads. Lettuce prices could be somewhat volatile over the next week or so as the chief harvest area shifts to the Yuma/Imperial Valley region. The tomato markets remain inflated. Heavy rains from Tropical Storm Faye wiped out early tomato plantings in the Immokalee Florida area this summer. The Immokalee area is typically the chief domestic source for tomatoes during the winter. Florida tomato shipments could be short over the next 6 weeks. Prices shipping point unless noted (terminal) FOB from USDA
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Oil and Grains |
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The grain corn market has been in a sideways trading range recently. Challenged ethanol producer margins could be bearish for corn down the road. 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 - The canned tomato markets are firm. Whole peeled and diced tomato stocks are reported to be historically restricted due to strong demand. Elevated canned tomato prices will likely persist. Price per case (6/10) FOB from Supply and Market Report.
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Processed Fruits and Vegetables - Most canned vegetable product supplies are relatively limited and could remain so throughout most of 2009. Steady to modestly higher canned vegetable prices are expected in the coming months. Prices FOB per case from Supply and Market Report.
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Thanksgiving Dinners To-Go
Community member Byron writes...
We will be offering Thanksgiving dinners to-go, $15.95 +tax & 15% svc chrg. All orders must be in before 8pm on the night before and pick-ups between 9am - 2pm on Thursday, we plan to be closed by 3pm. We will package the dinners family style in the round aluminum containers with the cardboard top. Turkey, stuffing, gravy, candied carrots, cranberry & rolls & butter. Has anyone tried this or currently offering it, any suggestions? I'll let you know how it goes.
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Affordable Consultants?
Community member president writes...
Has anyone had any luck with an affordable consultant? It seems like whomever I contact are asking for thousands of dollars, plus travel expenses. What a racket! I am simply looking for some experienced advise from someone with some real business knowledge. ...
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Help with fired server and situation
Community member foodbound writes...
Last week I fired a server, who has had issues in the past, but this time she was caught red handed and admitted it. Our policy is that NOTHING goes out to the table without being put through the POS. No drinks are to be poured until the ticket is printed. The server did not put drinks through until confronted and then tried to cover it up, lied about it, then admitted it. We had problems about 3 months ago with the same server voiding drinks and food after the customer consumed them on at least...
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Like a Potato but a Little Sour
I am a tuber, only second in popularity to potatoes. Believed to be originally cultivated in Peru today I am primarily grown in the Andes. You will also find me grown from Venezuela to northern Argentina. Most often grown with other potatoes I can also be found grown along fields of maize. I am a staple in the Titicaca area of Bolivia and was introduced to Chili via New Zealand in 1869. As I contain oxalic acid, my taste is similar to that of a potato but a bit more sour. If left in the sun for a few days the heat and light takes away our sour edge and we become sweet. We range from 2 to 10 centimeters in length and range from red to white gold in skin color. My flowers are orange-yellow. Also known as a New Zealand yam in New Zealand, iribia in Bogota, or cuiba in Venezuela, with my intensive breeding program I could soon become a popular tuber in the northern latitudes in the very near future.orite breakfast bread, or used in chutneys. I have the highest vitamin count of all fruit especially high in vitamin A and C.
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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