Visit Urner Barry in Boston at Booth 364
Visit VOLUME 10 / NUMBER 2 / SPRING 2015 / QUARTERLY Urner Barry in Brussels at the newsmagazine for the food industry professional Booth 6-842 2014 U.S. shrimp imports post third highest volume ever
Imported shrimp shipments to the U.S. in 2014 reached the third The summer of 2013 saw tight supplies forcing prices to record highest volume ever reported. This production emerged from high levels. Urner Barry’s White Shrimp Index, for example, historic, disease-induced declines in 2012 and eclipsed $6.00 per pound for the first time ever. 2013. Combine this with favorable currency These record high prices would continue to trends and the result was increased shrimp sales “… IN 2014 THE hold well into 2014, peaking at about $6.25 per and lowered prices in the market (Chart 1). PRODUCTION LANDSCAPE pound (Chart 3). SHIFTED AND FULL Prior to 2014, Thailand served as the chief YEAR SHRIMP IMPORTS However, in 2014 the production landscape shrimp supplier to the U.S. However, a two year TO THE U.S. REACHED shifted and full year shrimp imports to the U.S. battle with the shrimp disease known as Early 1.25 BILLION POUNDS.” reached 1.25 billion pounds. This was a 12 Mortality Syndrome (EMS) proved to slash Thai percent—or 140 million pound—increase from production. By the end of 2013, Thai shrimp 2013 and the third highest imported shrimp shipments to the U.S. fell over 38 percent and total U.S. imports volume to ever reach the U.S. finished the year down about 5 percent (Chart 2). Continued on page 66
The retail recap and resolution ... What’s in store for retail meat and poultry in 2015?
The 2014 year in retail was certainly without equal. It was a year in which unique circumstances propelled each protein category into uncharted waters, reaching new all-time highs and resulting in market fluctuations that were astonishing at best, debilitating at worst. Grocers were presented with the unhappy task of managing record high feature prices amidst supply constraints, while maintaining customer interest and attention at the meat case.
2014 could undoubtedly be called the year of the chicken—a sentiment that was widely predicted even before the year began. With uncertain supply Continued on page 71 ©iStockphoto.com/camij On the inside 13 Keeping 20 Earth’s 70 Urner Barry quality in the southernmost babies spotlight continent Several UB Patrons have An Urner Barry staff members shown they alum goes to celebrated new are willing study what arrivals, and we to pay more effect climate are welcoming for premium change is them here. burgers. having on the Prepare to ecosystem. say Aw! 2 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 URNER BARRY’S REPORTER • VOL. 10, NO. 2 • SPRING 2015 Center of the plate the newsmagazine for the food industry professional Page 1
Publisher Paul Brown Jr. 2014 U.S. shrimp imports post third highest Senior Editor Russ Whitman volume ever
Managing Editor Joe Muldowney
Contributors Page 1 Sandra Bailey Russell Barton What’s in store for retail Nicole Bessemer Jamie Chadwick meat and poultry in Jim Kenny Brian Moscogiuri 2015? Gary Morrison News bites Jake Muldowney James Patterson 6 OH SNAP! Does the expression “First of the month” Phillip Potter Main ingredients still even apply? Michael Ramsingh Angel Rubio 11 Clemens expanding pork processing operations 8 Eating a high protein John Sackton breakfast to reduce Adam Sharkey 18 What’s the difference between white and Bill Smith cravings Curt Thacker brown eggs? Terence Wells 10 Trade agreements that Kim Wheeler 20 Palmer Station, Antarctica are worth your time MaryAnn Zicarelli 22 CAB carcass weights edge higher 12 Buffalo ildW Wings year in Copy Editors review Jamie Chadwick 26 Russia: conflict, Linda Lindner sanctions, inflation and 13 High beef costs promote quality new friends Art Director casual burgers Glenn F. Juszczak 28 Unforeseen variables 15 Urner Barry video turns five Production Manager and poultry pricing Chris Ashley 19 A whole new price point for retail shoppers 32 Aquaculture Associate Designer opportunities for 24 How price fluctuations influence category choices Maria Morales livestock barns, other 25 Crab meat–overseas supply proves to be Advertising buildings “good and plenty” Liz Cuozzo 36 The shipping industry 30 The menu adoption cycle. How you can leverage– Janice Schreiber looks to get back and predict–the changing food trend landscape Terence Wells in black 40 American live lobster Subscription Information - 800-932-0617 42 Panama Canal update 58 UB presents market trends in growing markets 43 Winter slide in hog prices could temper herd Obsono enters its 15th year of service expansion, late 2015 slaughters 68 44 What to know about cattle herd expansion A la carte Urner Barry’s Reporter (ISSN 1944771X) is published 46 Ensuring your business is insured a Q&A with quarterly by Urner Barry Publications, 182 Queens Foa & Son’s Michael Lieberman 4 Are fresh groceries a retail panacea? Boulevard, Bayville, NJ 08721. Periodicals Postage Paid at Bayville, NJ 08721 and additional offices. 48 The cattle cycle–excerpt from Urner Barry’s new 9 Resurrecting the aurochs POSTMASTER: Send address changes to Urner Beef Book Barry’s Reporter, 182 Queens Boulevard, Bayville, 14 Restaurants trim menus, push customization NJ 08721. 50 AEB grows egg consumption 16 The future of food shopping Subscription to Urner Barry’s Reporter is free. Mail 52 NYC’s famous fish market gets digital makeover via subscription orders and changes to Urner Barry’s 34 Preppers–a growing market Reporter, Subscription Department, 182 Queens online sales portal Boulevard, Bayville, NJ 08721 or call 800-932-0617. 38 The millennial boom on 54 Zone management Printed in the U.S.A. Copyright © 2015 the food industry 56 Slew of seafood products set to debut during Tel. 732-240-5330 • Fax 732-341-0891 55 Cuban thaw heats up www.urnerbarry.com • [email protected] 2015 Boston expo U.S. grain market Nothing may be reproduced in whole or part 60 NFI’s global seafood market conference grows without written permission from the publisher. 62 Urner Barry’s 1st annual 64 Mexican Beef–Exports rebound in 2014 Sunday gravy challenge 69 Egg prices soar as prop. 2 goes into effect 70 Urner Barry baby boom
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VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 3 Trading margins for consistency may be a winning strategy ... Are fresh groceries a retail panacea?
By now, memories of the 20th century for many of us are fading with one of the most prominent examples being Target. Yet, the fast. Few of us can remember with any clarity a time when our truth hasn’t changed—groceries are a lower-margin, higher-cost Christmas presents and movies were anything less than a business. So, one might ask, why bother? click away. Consumers in the U.S. have seen the retail landscape change drastically from what they saw even Let’s look at how the retail landscape has changed in just 20 years ago. Today, in a world of supercenters the last few decades. According to the U.S. Census and one-stop shops, it’s important to remember how Bureau, nearly 7% of retail sales now take place we got here and why. online, with consumers having more access to information about new products and accessories It is difficult to talk about historical and right from their couch. Many retailers are currently contemporary American retail without mentioning victims of a phenomenon called “showrooming,” Sears and Walmart, by far two of the most which is when someone walks into the store, finds significant enterprises in the area. Back in the 90s, an item they like, hunts online for a lower price, and when Walmart made the decision to push forth buys it elsewhere. This is something that can occur with extending its groceries program to its national with consumer electronics, digital media, children’s and international network of stores, many Wall Street toys or even appliances, but this writer struggles to see analysts were squeamish. Few went to bed with visions of something similar working with a banana or a steak. sugar plums in their head, and those that did saw the sugar plums eating into margins and P/E ratios. Why would Walmart, The brilliance of incorporating fresh groceries such as meats, a darling blue-chip company, deliberately depress its margins by fruits and vegetables into stores’ offerings lies in something that selling groceries? has grown ever more valuable since the advent of the practically omnipresent internet—foot traffic. People will walk into the store It’s not just Walmart, either—most national or seminational more often, regardless of what they want or need, and often retailers now have at least some commitment to fresh groceries, irrespective of the economic outlook or environment, simply ©iStockphoto.com/gpointstudio
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4 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 Annual Salesof $SHLD, $WMT & $TGT SHLD TGT WMT* Trading margins for consistency may be a winning strategy ... $80,000 $70,000 because groceries typically represent consumer needs. So, while $60,000 both Walmart and a competing electronics retailer might, for $50,000 example, both be suffering from reduced TV sales in an economic $40,000 downturn, consumers still go to Walmart to buy dinner. $30,000 Annual Revenue (in millions) Annual Revenue (in 2008 2009 2010 2011 2012 2013 Indeed, Walmart and Target, two of the largest national retailers, Source: SEC Filings both have groceries included in their offerings and have seen their *Walmart sales are divided by ten for easier comparison 1 sales rise year after year since 2008 (see Chart 1). Their earnings As the economy recovered, sales at $SHLD continued to decline. per share, or net income per share, also showed a great deal more stability than those of Sears, which has struggled to maintain QuarterlyEPS of $SHLD, $WMT & $TGT SHLD TGT WMT liquidity and keep its store shelves stocked (see Chart 2). Sears $2 has even stated in its financial statements that the retail business $1 $0 is “highly seasonal,” and it often relies on Q4 sales to take it in -$1 the black for the year, relying on the original definition of “Black -$2 Friday.” So, their earnings are not only negative, but also much -$3 -$4
more highly variable than their competitors, which is an entirely Earnings per Share separate vice. -$5 -$6 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 Having more consistent earnings increases creditworthiness Source: SEC Filings 2 by demonstrating more reliable cash flow. Ultimately, reliable The relative stability of EPS at $WMT and $TGT is evident. cash flow contributes to a greater ability to strategize and fund continuing and new operations. This is an invaluable advantage fresh groceries? It may sound a little odd, but this analysis shows that Sears/Kmart has forgone by not expanding into groceries and that fresh groceries likely insulate retailers from fluctuations in the instead focusing on being a general department store. economic climate and also boost foot traffic during good times, begetting opportunities for additional sales.UB So, is the difference between Walmart and Target’s domestic successes and Sears’s floundering performance merely the result of Article contributed by Adam Sharkey | [email protected]
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VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 5 Federal food stamp program spreads the wealth … OH SNAP! Does the expression “First of the month” still even apply?
In 2014, over 46.5 million people to the U.S. Department of Agriculture California, Texas, Florida, New York and participated in the Supplemental Nutrition (USDA), each state has a set schedule for Illinois are the five states with the most Assistance Program (SNAP), which is about when their benefits will be distributed and average monthly participation (in persons). twice as many as there were a decade ago for most states, it’s over a period of several They also happen to be the most heavily in 2004. Benefits totaled over $70 million; days. Also, it isn’t the first day of the populated states and home to some of the least amount funded since 2010. Some month when most states give out at least a the nation’s largest markets. Georgia, food industry professionals are still left portion of their benefits, it’s the fifth day Pennsylvania, Ohio, Michigan, and North wondering, however, what type of impact (participation from 37 of 50 states). Carolina are the remaining states that SNAP has on overall business, especially round out the Top 10. at the beginning of each month. It’s been So, distribution is spread out a bit, but are widely debated whether the saying, “first of more benefits still transferred during the Depending on what state you’re the month” still holds market significance, first half of the month than the second? referencing, the corresponding SNAP and it seems both sides have a pretty The quick answer is, yes, they are (see distribution schedule could very well have good argument. infographic). Actually, there aren’t any an impact on retail business during the states that distribute benefits after the 23rd first week of the month. However, because There’s no doubt that federal money is day of the month. So while the meaning some states stretch their distribution of distributed throughout the economy, and impact of “first of the month” may not benefits out for over more than three but when and how often may just be be as black and white as it once was, it’s weeks, the “first of the month” may not what really matters most for the sake at least gray. Given the lengthy timeframe necessarily be as significant, at least not to of this argument. Yes, the majority of in which benefits are dispersed, when every state. states distribute at least a portion of their referring to the increase in demand that benefits within the first week of each comes along with said benefits, it may be So, does the saying “first of the month” month, but not every state does. According more practical to reference the “first half still apply? More than likely the answer is of the month” rather than just the first yes, but with some fine print of course.UB few days. Article contributed by Terence Wells 37 [email protected] STATES DISTRIBUTE AT LEAST A PORTION OF THEIR SNAP BENEFITS ON THE STATES0 DISTRIBUTE th 5 DAY SNAP BENEFITS OF THE MONTH, AFTER THE THE MOST OF 23rd DAY ANY DAY OF THE MONTH $70 OVER MILLION 46.5 IN BENEFITS WERE MILLION ALLOCATED FOR SNAP RECIPIENTS PEOPLE IN 2014 RECEIVED SNAP BENEFITS IN 2014 Source: www.fns.usda.gov (Jan 2015) ©iStockphoto.com/HUNG KUO CHUN
6 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 7 Breakfast-skippers have lower dopamine levels … Eating a high protein breakfast to reduce cravings According to the Centers with feelings of reward, which moderating impulses and reward, including for Disease Control may reduce food cravings and food cravings. Dopamine levels were and Prevention overeating later in the day. determined by measuring homovanillic (CDC), many teens Understanding the brain acid (HVA), the main dopamine skip breakfast, chemical and its role in metabolite. Eating initiates a release of which increases food cravings could lead dopamine, which stimulates feelings of their likelihood to improvements in obesity food reward. The reward response is an of overeating and prevention and treatment. important part of eating because it helps to eventual weight gain. regulate food intake, Leidy said. Statistics show that the “Our research showed number of adolescents that people experience a “Dopamine levels are blunted in struggling with obesity, dramatic decline in cravings individuals who are overweight or obese, which elevates the for sweet foods when they which means that it takes much more risk for chronic health eat breakfast,” said Heather stimulation—or food—to elicit feelings of problems, has quadrupled Leidy, an assistant professor of reward; we saw similar responses within in the past three decades. Now, nutrition and exercise physiology. breakfast-skippers,” Leidy said. “Eating University of Missouri researchers have breakfast, particularly a breakfast high in found that eating breakfast, particularly Leidy studied the effects of different protein, seems to counteract the tendencies meals rich in protein, increases young breakfasts on participants’ levels of to overeat and to prevent weight gain that
©iStockphoto.com/miro kovacevic ©iStockphoto.com/miro adults’ levels of a brain chemical associated dopamine, a brain chemical involved in occurs as a result of overeating.”
Participants in the study were young women with an average age of 19; however, Leidy said the findings may be generalized Dolphin to a larger population of adults. “In the U.S., people are skipping breakfast Trading, Inc. more frequently, which is associated with food cravings, overeating and obesity,” P.O. Box 640 • McDonough, GA 30253 Leidy said. “It used to be that nearly 100 percent of American adults, kids and teens [email protected] were eating breakfast, but over the last 50 years, we have seen a decrease in eating 770-957-5534 frequency and an increase in obesity.”
PRIMARY Leidy’s research was published in the AGRICULTURAL Nutrition Journal. Other MU researchers Dolphin Trading, Inc. on the study included Matthew Will, is an exporter of PRODUCTS an associate professor of psychological sciences, and Heather Hoertel, who agricultural commodities conducted the study as part of the FRESH SHELL EGGS requirements for her master’s thesis. The with a focus on shell eggs research was funded by the Beef Checkoff EGG PRODUCTS Program, the Egg Nutrition Center and the Margaret Flynn Award from the University Our main areas are the of Missouri.UB APPLES Middle East, Europe, PEARS Far East and Caribbean Adapted from an article that originally appeared CITRUS on Foodmarket.com on October 17, 2014
8 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015
X ______Sign here for approval and fax to: 732-341-0891 Date Second chance for the first cattle …
“THE MISSION IS TO PRODUCE While not necessarily a perfect genetic clone of AN ANIMAL INDISTINGUISHABLE the extinct aurochs, the FROM THE AUROCHS …” tauros will have all the same characteristics as There are a lot of cattle out there. The its ancestor, a result U.S. alone estimates 95 million as of 2014. of a sort of reverse There is also a wide variety of breeds, speciation. The from Holstein to Brahman. However, it Tauros Programme Cave paintings depicting aurochs dating back wasn’t always this way. In fact, a 2012 study is not working thousands of years have been found. Illustration by Shannon Ehrola from Urner Barry’s The Beef Book. revealed that all domesticated cattle, both blind, either. In European and Indian, descended from a 2014, scientists managed to completely single herd of approximately 80 animals. sequence an aurochs genome, allowing for 2020, meaning This first herd was domesticated from comparisons between their bred tauros and that we may we will see these wild oxen some 10,500 years ago. The wild the original aurochs. bovine dinosaurs in our near future.UB oxen were known as the aurochs, and are the primogenitors of all modern cattle. The Tauros Programme timeline estimates Article contributed by Jake Muldowney Or rather, they were. Aurochs are now herds of modern-day aurochs by the year [email protected] extinct, with the last aurochs having died in Poland in 1627. U.S. Now, some people are looking to give the INSPECTED first cattle a second chance. Rewilding AND PASSED BY DEPARTMENT OF Europe is a Dutch non-profit that is AGRICULTURE looking to halt the decline of biodiversity EST# 19690 in Europe and bring back endangered wild animals. They plan to return developed areas to their original natural state, and an P-19690 important element of much of European nature was the aurochs. Rewilding Europe Servicing Traders, Brokers, launched the Tauros Programme in 2008, Importers, Exporters and Suppliers by planning to genetically recreate the first cattle by combining “primitive” breeds offering cold storage and USDA services: from southern Europe. These descendants of the aurochs have been the least changed BOX & FREEZE and CUSTOM PACKAGING by time, and by interbreeding those and Beef • Pork • Chicken selecting for the characteristics of the (loads up to 63,000 lbs. net legally) aurochs, the Tauros Programme hopes to Export recreate the lost breed. Imports (I-10 inspection house) Blast Freezing To accomplish this, the Tauros Programme Meat & Fat Testing employs scientists in such fields as VINELAND, NJ genetics, ecology, molecular biology, and archaeozoology. Their mission is (856) 696-1770 to produce an animal indistinguishable acfreezers.com from the aurochs via guided breeding. Sam Sorbello, President: This creation will be dubbed the tauros, [email protected] a rewilded animal perfectly suited for the Jeff Sorbello, VP: planned resurgence of European nature. [email protected] VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 9
X ______Sign here for approval and fax to: 732-341-0891 Date Keeping foreign trading from fading … Trade agreements that are worth your time
Foreign market access has been limit, eliminating the ability a hot-button issue lately for the of Congress to delay or alter U.S. and especially in the poultry agreements. The TPA supports sector. Bans and restrictions have U.S. job growth, helps export limited exporter’s options of “TPA ALLOWS THE PRESIDENT more “Made in America” where they’re legally allowed to TO PUT AN ISSUE TO A SIMPLE products abroad, makes trade send product and it has resulted UP-OR-DOWN VOTE WITH A TIME agreements better and more in downward pressure on market LIMIT, ELIMINATING THE ABILITY globally competitive, and values for a number of items. OF CONGRESS TO DELAY OR ensures transparency and public For those that may be unfamiliar engagement in trade. It is also ALTER AGREEMENTS.” with some of the political trade widely known as “fast-track” acronyms out there, here are authority. It is no longer in a few that are worth learning effect, and is being pushed for more about. renewal as of Jan 2015.
The Trade Promotion The Trans-Pacific Authority (TPA) is a legislative Partnership (TPP) is a tool that was developed in 1974 21st century trade agreement and gives the President of the ©iStockphoto.com/HIMIKO that encompasses the U.S., United States a set of goals, helps reduce the amount of time spent in Australia, Canada, Chile, rules, and rights that allow the efficient consultation and streamline the process of Japan, Brunei Darussalam, Malaysia, Peru, negotiation of trade agreements. TPA expanding U.S. trade interests worldwide. New Zealand, Vietnam, Mexico, and specifies what Congress expects of the TPA allows the President to put an issue Singapore. At thetime of this writing, it is President during negotiations, which to a simple up-or-down vote with a time being negotiated, and plans to provide a new market for U.S. goods and establish new working standard. When completed, its regulations may encompass up to 40 percent of all U.S. trade. Also covered in the TPP is intellectual property law, digital economy and transparency in regulations. It has been negotiated as though TPA is in effect, meaning that for it to be approved, TPA must be renewed. The TPP hasn’t necessarily been welcomed by all All types of raw materials for with open arms. It has been criticized for insufficiently enforcing environmental Food Processors, Meat Patty Makers, transgressions committed by member Meat Distributors, Sausage and nations. Several wildlife organizations are Canned Meat Manufacturing up in arms over this.
Importers of Australian and The Transatlantic Trade and New Zealand Boneless Beef Investment Partnership (TTIP) is a new trade agreement between the EU and U.S. The TTIP looks to standardize Purveyors of all regulations and streamline approval Beef & Pork Sausage Materials procedures between member nations. Also on the list of goals is cutting down tariffs Contact US FOR A FREE QUOTE to allow for more competitive prices, and establishing reciprocal textile trade. The Mike Berman Bill Berman current timeline expects ratification of this 800.828.7877 888.520.5600 agreement by 2015.UB [email protected] [email protected] Kevin Miller Article contributed by Terence Wells 316.744.9000 and Jake Muldowney [email protected] [email protected] | [email protected]
10 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015
X ______Sign here for approval and fax to: 732.341.0891 Date Bringing jobs to Michigan … Clemens expanding pork processing operations
The December 2014 announcement from expansion of its pork processing Clemens Food Group that they would be operations, choosing Michigan for the constructing a new pork processing plant location of the facility was based on the came as somewhat of a surprise to market state and community support as well as site watchers. After all, the industry had just feasibility and labor force preparedness. gone through a pretty tough year given the PEDv outbreak. Porcine epidemic “This announcement marks a major PEACE OF MIND. diarrhea virus (PEDv) is a highly infectious milestone in the history of our company disease that results and the future of DELIVERED. in significant pork production mortality in piglets. in the state Estimates suggest of Michigan,” said its effect on the Doug Clemens, 2014 slaughter total CEO, Clemens was close to five Food Group. “On FROZEN/ percent. Clemens Food Group, a behalf of our more than 2,000 employees, REFRIGERATED vertically coordinated company that our family shareholders and our family STORAGE includes hog farming, food production, farm partners who have joined us in this logistical services, and transportation, venture, we thank Governor Rick Snyder chose Coldwater Township, Michigan and leaders in Michigan and Coldwater as the place to construct their new pork and Coldwater Township for having CROSS DOCKING processing operation. the vision to see the opportunities to position the state to compete in the global Anticipated to become operational in 2018, pork market.” the 550,000 square-foot facility is expected CONTAINER to process 10,000 hogs daily, and bring Currently, there’s little commercial pork UNLOADING 810 new jobs to Michigan. According to production in the state of Michigan. The Governor Rick Snyder, “The Clemens last significant operation, which had a family is a recognized leader in pork daily capacity of 14,000 head, shuttered production and its investment here signals their doors in 1998. According to Mary FREIGHT to executives of all industries across the Kelpinski, Executive Director, Michigan CONSOLIDATION country that Michigan is the place to do Pork Producers Association, “Michigan business.” This will be the first ground- Pork Producers Association is looking up pork processing plant constructed in forward to having a fresh pork processing more than a decade. The last was the 2005 facility in the state. When we lost Thorn USDA opening of the Triumph Foods St. Joseph, Apple Valley in Detroit, producers had the INSPECTION Missouri facility. That plant has a daily increased cost of trucking pigs a lot further. capacity estimated at 20,000 head. Over the years we have seen Michigan producers finishing pigs in other states Clemens Food Group considered both closer to where they are processed. This Michigan and Ohio for a Midwest will help not only the producers supplying REPACKING the plant but the whole Eastern Corn Belt.”
Founded in 1895, the Pennsylvania-based “THIS WILL BE THE Clemens Food Group is a sixth-generation, TRANSPORTATION family-owned integrated pork production FIRST GROUND-UP PORK operation including farming, processing, transportation and logistics. The company PROCESSING PLANT has a total of 2,200 employees.UB CONSTRUCTED IN MORE 973-523-1899 Article contributed by Jim Kenny THAN A DECADE.” [email protected] [email protected]
VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 11 Looking back on the fastest-growing sports bar in America … Buffalo Wild Wings year in review In May 2014, Sally Smith, CEO of Buffalo coming years with plans to acquire more Wild Wings, provided a keynote address at emerging brands in the works as well. Urner Barry’s 38th Executive Conference. A long-term move permits significant Earlier that year, the Minneapolis- domestic growth without saturating the headquartered sports bar, founded in market with a B-Dubs on every corner. 1982, opened its thousandth unit in late January which commenced a year of strong Outside the United States, Buffalo Wild growth for the company, totaling 34 new Wings has franchise deals in place to units opening doors in 2014, including a begin expansion into Canada, Mexico,
Times Square, NYC location. ©iStockphoto.com/SweetBabeeJay the United Arab Emirates, Saudi Arabia In addition to tablets, B-Dubs launched and the Philippines. The company’s goals Buffalo Wild Wings, or B-Dubs as it is GameBreak in September, a multiplatform are to have 1700 locations in the U.S. and more commonly known, posted an 18.3% gaming experience including trivia, fantasy- Canada, 400 international units, and 900 increase in revenue in September 2014 style, and pick ’em games. Prizes include additional units from other brands. compared to the same period in 2013, gift cards and even a $10,000 prize pack. bringing in $373.5 million. The company The simple mantra of “Beer. Wings. currently sponsors the Buffalo Wild Buffalo Wild Wings continues to be one Sports.” has carried Buffalo Wild Wings Wings Citrus Bowl in Orlando, which was of the fastest-growing chains in the nation, to tremendous growth over the past years, played on January 2nd. Among B-Dubs’ opening new units as well as acquiring and 2014 was no exception. We can expect most exciting new developments is the a majority of the Dallas-based fast-casual to see more in 2015, as B-Dubs continues implementation of tabletop tablets for outlet Rusty Taco. The B-Dubs portfolio enterprise worldwide.UB ordering, payment, television, and trivia, also includes PizzaRev, a build-your-own which were tested in 2013 and saw a pizza chain. This diverse assortment of Article contributed by Jake Muldowney limited release in 2014. outlets allows for more expansion in the [email protected]
12 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 Quality over economy is a priority for consumers … High beef costs promote quality casual burgers As ground beef costs rise, restaurants face shrinking profit margins and pressure to adapt. While some outlets are changing Hamburger Patty Raw Material Cost $2.18 $2.50 burger quality to keep costs manageable, $2.00 others are placing greater emphasis on $1.62 $1.65 $1.50 offering a premium product. Certain $/lb. consumers have shown that they’re willing $1.00 to pay much more for what they perceive $0.50 as a high-quality meal. Many consumers $0.00 2012 Average 2013 Average 2014 Average have demonstrated an interest in burgers Source: Urner Barry advertised as fresh, handmade, never frozen and Angus beef. Even when these “…CONSUMERS WILL PUT THEIR MONEY WHERE THEIR quality options are more expensive, a MOUTH IS AND GO FOR A PREMIUM PRODUCT.” sizable portion of the consumers will put ©iStockphoto.com/Ridofranz their money where their mouth is and go for a premium product. beef prices increase, their added expenses willingness to pay more to keep quality in must either be absorbed by the company the spotlight.UB According to Urner Barry data, the price or deferred to the customer. While chains to produce an average fast food hamburger may balk at price hike, there is a sizable Article contributed by Jake Muldowney patty jumped 32% from 2013 to 2014. The sect of consumers that have communicated [email protected] burger industry is developing a schism based on how businesses respond to this increase. There exists a split between those businesses that change their offerings to keep price standards, and those that raise prices to maintain menu standards. If beef prices remain high, this chasm between restaurants prioritizing economy and quality may grow, or a new menu option could take the pressure off of the burger business. Many outlets are expanding Distributors of the finest protein products: chicken offerings, with chicken sandwiches, Beef, Pork, Poultry, Seafood, Veal & Lamb, chicken wings, and chicken strips cropping up across menus nationwide. New chicken Processed Meats, Natural Products, Cheese & Dairy products are taking pressure off beef and reducing some customer demand for now-expensive hamburger offerings. Some businesses are also opting to defray beef costs by promoting complete meals with drinks and side dishes, raising both average checks and perceived value to keep the customer happy and costs balanced.
The fast-casual and quick-serve industries have always fought to keep prices low to avoid hitting a threshold where they San Diego: 619-477-0185 begin competing with traditional casual Los Angeles (JSS): 323-584-3160 Dallas: 623-936-0020 Sacramento: 916-399-8982 Denver: 303-333-8225 cuisine. As a result, many chains are Since 1989. already extremely efficient, making Seattle (WBX): 253-604-4755 Kansas City: 913-371-2333 Portland (WBX): 503-284-3314 From Our Door Sioux City: 605-232-6151 significant cutting down on behind-the- to Yours. counter costs a challenge. Therefore, as Phoenix: 623-936-0020 Orlando: 407-296-0818
VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 13
X ______Sign here for approval and fax to: 732-240-6332 Date Menus shrink, tastes expand … Restaurants trim menus, push customization The days of the giant menu are coming to an end. Menu sizes have been shrinking since 2009, as companies focus on quality “...CONSUMERS LOOK FOR and speed over quantity. McDonald’s plans QUALITY INGREDIENTS on paring eight menu items and cutting out five of their 16 Extra Value Meals AND PRODUCTS OVER leading in to 2015, combating kitchens AN EXPANSIVE LIST slowed down by complicated menus. IHOP has also been shrinking its menu, OF OFFERINGS.” streamlining their kitchens. Burger King is following suit, taking steps to cut back on new products as well. More and more, over an expansive list of offerings. Among companies are focusing their menus, the best examples of foodie favorite specializing in a certain kind of cuisine in restaurants are Five Guys and Chipotle, lieu of having a little of everything. both of which offer very short menus. Chipotle has built its success on only Part of the reason for this is the rise of five menu items, offering customization “foodie-ism,” as consumers look for options that allow for more than 600,000
©iStockphoto.com/Ridofranz quality ingredients and products different combinations. Five Guys serves primarily hamburgers and fries. Their customers aren’t overwhelmed by choices, but instead choose a burger from a small menu and customize. Capitalizing Dutt & Wagner on the undeniable successes of the customization approach, McDonalds plans on expanding its experimental “Create of Va., inc. Your Taste” program in both size and scope, taking customizable burgers and Serving the Southeast chicken sandwiches to more than 2,000 new restaurants. for all your egg needs since 1926 Customization comes at the expense of speed, however. Chipotle’s lines are legendary, and there’s a reason Five Guys doesn’t have a drive-thru. “Create Your Taste” options can take five minutes or more to prepare, and are not an option at drive-thrus. They also have to be prepared in a separate area, so smaller restaurants won’t be able to offer them. The small quick-serve menu might speed up normal ordering, but customization innovation could slow things down. Quick-serve 1142 West Main Street restaurants will be challenged to find a P.O. Box 518 balance between the speed they need and Abingdon, VA. 24319 the customization customers want to cater to foodies, fast.UB Toll Free: 1-800-688-2116 Article contributed by Jake Muldowney Fax: 276-628-4619 [email protected]
14 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015
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Dated ______From humble beginnings … Urner Barry video turns five Urner Barry is always looking to provide is truly a team effort with staff from IT, new content in innovative ways. In the data processing, market reporting, market early 1980s, the COMTELL news service analysis and staff interns all working to delivered a content stream of market write, produce and disseminate video information via satellite. The COMTELL content. The Urner Barry YouTube terminals that were used to view market channel has well over a thousand information actually predated the advent news videos. of PCs in the workplace. When vehicles are available to distribute information, a To find all of the Urner Barry videos, visit team at Urner Barry is charged to assess us online at www.urnerbarry.com/video. its merits and potential for adoption by You can also scan the QR codes to see our the trade. As such, Urner Barry has long first news video and YouTube channel.UB been interested in video media. The first marketing videos were shot in the early Article contributed by Jake Muldowney 1990s and distributed via VHS. The late [email protected] ’90s saw the first attempt at news videos, but those efforts would not yet result in a viable service, since the content dissemination infrastructure was spotty and most clients’ PCs in use at the time lacked the ability to view video and play audio. Check out our first UB News Video by scanning With the prevalence of high-speed internet the QR code on the left. Or visit our YouTube Behind the scenes of the early videos, that light and the availability of YouTube and other channel by scanning the one at right. is clamped onto a ceiling tile. video distribution platforms, UB decided to give videos another shot. The first few videos were very jury-rigged. Lighting was a work floodlight someone had at home, the camera was a video camera borrowed from home. The on-air talent was working in the data processing department. The first scripts were read from a piece of paper, until someone created a manual teleprompter by printing scripts in a large font and gradually raising them to the level of the camera.
March 2015 marks the five year anniversary of Urner Barry’s first market video. Today’s video is a key part of the day-to-day operations at Urner Barry. Gone are the days of the work light and paper prompter • Foodservice • Retail • Export • as these are swapped out for equipment better suited for the task. Everyone at • Fresh & Frozen • Whole birds • Urner Barry is encouraged to appear on • Bone-in breast • Tray pack • the video (although some would rather work behind the camera rather than in • Map grind • Ground chubs • front of it). Production of the daily video • Boneless roast • • Private label is available • CONTACT: “TODAY’S VIDEO IS A KEY Kent Puffenbarger, Patrick Fowler or Kate Prestage Poplin PART OF THE DAY-TO-DAY www.PrestageFoods.com OPERATIONS AT URNER BARRY.” St. Pauls, NC 28384 • 1-800-679-7198 VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 15 Online ordering ... The future of food shopping As humans have evolved, the need has sourcing, then use technology to make greatly diminished for individuals to it easier to shop and deliver those fresh farm, hunt and gather their own food. products to customers’ doors. It’s faster, it’s The gradual move from self-sufficiency to fresher: It’s grocery shopping perfected.” the global effort to produce food for the masses allowed the average, modern day While companies like FreshDirect and individual to simply walk into the nearest a few other grocery chains and delivery grocery store. Gone are the days when if services such as PeaPod have been in the one wanted chicken it required a trip to portage arena for a while now, the trend the coop to procure a bird that needed is spreading like wildfire. Retail giants like to be killed, plucked and prepared for Walmart and Amazon have gotten in on supper—instead, we now have the luxury ©iStockphoto.com/triocean the business of delivering groceries in a of picking up perfectly packaged fresh were estimated to be about $27 billion in few trial areas, using their own warehouses chicken from the meat case at the store, 2014, with expectations for that figure to and delivery systems to bring groceries along with produce, beverages and a slew continue growing in the coming years. to customers. Then, there are the third of other foodstuffs. Couldn’t get any easier party delivery services like Instacart, which than that, right? Wrong. Thanks to the Food delivery is nothing new—take-out, doesn’t own the inventory it delivers, but exploding trend of online shopping, we pizza, and catering has been around and simply visits regular stores to pick up and don’t even have to do that anymore. appreciated for quite some time. Before deliver products for customers who have now however, delivery applied largely placed orders online through their website. Online grocery sales are expected to to foodservice operations only, not The United States Postal Service also quadruple by the year 2023, according retail grocery outlets. Undoubtedly, the wants a slice of the delivery pie, seeking to to statistics from Brick Meets Click trend is largely driven by the millennial deliver groceries for Amazon and possibly presented last fall. Online grocery sales population, since this demographic highly even expand to other retailers in major values efficiency and speed in a rather metropolitan areas. on-the-go lifestyle. A true reflection of technological and Many retail outlets have experimented social advances, online ordering is rapidly with online ordering and delivery, or becoming the new, no hassle normal of shop from home-style structures wherein foodservice and grocery purchases. One customers can create their shopping list to question to consider is the impact online be collected, bagged, and ready for pick up shopping has, or will have, on impulse at the store. Both styles of online ordering buys. We’ve all walked into the grocery eliminate the occasional frustration of store with a carefully thought out list of navigating store aisles, fighting crowds items we need, yet we often leave with and waiting in line at the cashier. As more products than were on the original with most marketing and customer list. According to a study by BetaBait on Midwest service advancements, this type of service buying behavior, 14% of impulse buys are undeniably creates an atmosphere of food items, and impulse buys at brick and Poultry competition among retail chains, since mortar stores are heavily influenced by once one store implements online sights, sounds and smells within the store. services ordering, the rest hardly have a choice but With fewer actual store visits, how much to do the same. will online shopping affect the portion of Three generations of store sales attributed to impulse buys? One company that is already in the game experience in fresh eggs. and has established a loyal and growing Online grocery shopping certainly looks customer base while mastering the tricky to be the new frontier in consumer food Midwest Poultry Services, L.P. logistics of delivering fresh foods to online purchasing. With so many companies is an industry leader shoppers, is FreshDirect. One of the vying for dominance in the online with a reputation built on largest online grocers in existence and retail grocery space, the competition outstanding service. located on the East Coast, FreshDirect is fierce—which certainly works to the Call us to experience the difference. delivers groceries independently sourced advantage of consumers.UB and delivered. The company explains, “We Midwest Poultry Services, L.P. use our direct relationships with farmers Article contributed by Jamie Chadwick P.O. Box 307, Mentone, IN 46539 Phone: (574) 353-7651 • Fax: (574) 353-7223 and artisans to drive superior quality in [email protected] 16 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015
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Dated ______Visit us at Booth #405
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VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 17 Consumers paying for perception … What’s the difference between white and brown eggs?
Whether you’re discussing poultry, red meat, baked goods, pastas, Ok, so what about the differences beyond the shell? Well, brown or fruits and vegetables, consumers have tough choices to make and white eggs are nutritionally the same. There is no difference or when shopping at the food store given the growing number of benefit in eating a brown egg vs. white, unless either breed is fed a specialty offerings. From organic and natural to gluten free, special diet. retail shelves are packed with options at a range of price points. Shoppers are being forced to choose what best fits their lifestyle Now, about the price, most noticed that brown eggs tend to cost or diet, but most importantly their budget. This is no different at more. If the only difference is color, why would that be the case? the egg case, where refrigerator shelves are lined with a variety of Well the hens producing brown eggs are a larger breed of bird, size, production, and brand options. One of the most common requiring more room and feed to produce the same volume as questions surrounding the egg case isn’t necessarily how eggs White Leghorn hens. This added input cost is generally why are produced but rather the difference between the white and brown eggs cost more than white eggs. brown varieties. In the last five years, Urner Barry’s Midwest large brown egg quote Consumers often wonder if there are nutritional benefits between averaged nearly $0.20 more per dozen than white large in the the two, where they come from, and why they vary in price. same region.
If you ask most people outside the industry what the difference is The spread between brown and white eggs is far from static between a white egg and a brown egg is, you’re guaranteed to hear though. When the white shell egg market hit all-time highs ahead a number of interesting answers. Many believe that brown eggs are of the holidays in 2014, brown eggs were actually cheaper than healthier, yielding more protein or offering reduced cholesterol like size whites by as much as $0.35 per dozen. Tight prices and when compared to white eggs. Others will tell you they are “more consumer perception drive sales in the brown category when natural,” linking them to local farms. One person I spoke with costs with generic whites tighten. Brown egg production is just even thought that all eggs were produced brown and that white a fraction of generics though, so these periods are usually short eggs simply went through some kind of bleaching process! lived. Meanwhile, we’ve seen differences climb to nearly a dollar more a dozen in the opposite direction during times of strong So what really determines shell color? Well, basically, it’s the brown demand or weak generic markets. These periods tend to last bird that lays them. The standard laying hen in the U.S. is the longer, because generic white laying hens make up the majority White Leghorn. With white feathers and earlobes, this bird of production. produces the generic white eggs you are accustomed to seeing in retail cartons. Meanwhile, the Rhode Island Red breed is the Consumers tend to buy the cheapest egg in the store. Many believe type of bird responsible for most of the brown egg production there is added value in brown eggs. However, unless market in the U.S. These hens have rust or brown colored feathers and conditions allow retailers to price generic browns at similar levels brown earlobes. to whites, they are really just paying more for perceived benefits around shell color.UB It isn’t production methods or processing that determines an egg’s color; it’s the breed of chicken from which it is laid. Article contributed by Brian Moscogiuri | [email protected]
Midwest Brown Large Eggs vs. White Large UB Shell Eggs, White Lg, MW y C tr h Country Source: Urner Barry UB Shell Eggs, Brown Lg, MW n a 2.70 u r Charm o m Eggs, LLC
C
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$ Carton, Graded Loose, / 1.90 d Nest Run Eggs z E n . g Quality Eggs in the g C 1.50 s, LL Southeast Since 1978 1.10 www.countrycharmeggs.com Contact Brent Booker (706) 652-2164 0.70 PO Box 370, Gillsville, GA 30543 2010 2011 2012 2013 2014 2015 ©iStockphoto.com/amenic181 18 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015
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Dated ______Creative ways to sell higher-priced protein items … A whole new price point for retail shoppers People will come… not exactly a Field of price per pound. The first stop was Dreams reference here, but in a way it the deli counter where roast beef was is the hope of the retail advertisement; featured at $5.49 per half pound. For price attractively and the consumer will shoppers who are familiar purchasing be enticed to visit the store and buy this item, it typically sells for over the product. However, what exactly are $10.00 a pound. Naturally, the retailers to do when food costs increase, lower looking price is eye- particularly protein items? Most often, the catching because buyers weekly circulars are filled with features at are more apt to purchase special prices with the hopes of tempting when they see $5.49 customers to come in and grab the instead of $10 and they bargains. Lately, retailers have been noticed seemingly disregard the using more creative ways to continue to unit price. Other featured attract price-conscious shoppers. Since items that are featured at ©iStockphoto.com/monkeybusinessimages many retail shoppers are less attracted lower price units are fresh to price points in the double digits and salmon portions; found this Are consumers looking many protein items have exceeded this per visit at $4.99. The portion was for the best price or the best pound price point, in an attempt to keep approximately 5 ounces which price per pound? Since many retail customers interested, retailers have reduced means the price for a pound of this shoppers are conditioned to shop by price, the unit amounts and thereby seemingly salmon costs $15.97. Soft-shell crabs were lowering the unit amount has allowed lowering price points. being offered at $4.99 each. The average shoppers to purchase smaller amounts weight of one soft-shell crab ranges from while sticking to their budgets.UB Urner Barry’s Reporter visited several New 2 to 4 ounces. This would mean that a Jersey retail stores and found some protein pound would cost a shopper between Article contributed by MaryAnn Zicarelli items that were featured in units less than $19.96 and $39.92 per pound. [email protected]
Wabash Brown Ballas Valley Produce Egg Products Produce Co. Corp. Dubois, Farina, Zanesville, Indiana 47527 Illinois 62838 Ohio 43701 Scott Seger Josh Jahraus Craig Ballas Tel. (812) 678-3131 Tel. (618) 245-3301 Tel. (740) 453-0386 Fax (812) 678-5931 Fax (618) 245-3552 Fax (740) 453-0491
VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 19
X ______Sign here for approval and fax to: 732-341-0891 Dated ______Living on the edge — of the world … Palmer Station, Antarctica Antarctica is one of the most misunder- Ecological Research (LTER) at Palmer on their boat ‘Bruiser’ (which Frank tells stood places in the world. When people Station, Antarctica. LTER is a project that the Reporter is aptly named because it’s the hear the word Antarctica they think ice, spans both vertically and horizontally, biggest and the baddest zodiac on site), to penguins, and maybe even polar bears. over years and several different projects. drop scientific instruments. The devices The ice is beautiful and the penguins are The opportunity to take part in this record the salinity, temperature, depth and adorable, but the polar bears, well, they live endeavor was afforded to Frank by Rutgers fluorometry data. Samples were taken from in the Arctic! But as for Antarctica, there University. They have experiments that different depths to get a good view of the is much more to this continent than what need to be run at Palmer Station and, after entire water column. After retrieving the meets the eye. sending in his resume, writing an essay and samples, the researchers would head back being granted an interview; he was offered to the station and run tests on them to But let’s back up a little. Urner Barry’s a position as a research grantee. gauge the productivity of phytoplankton. Reporter had the chance to catch up with By comparing each season’s data with the Frank McQuarrie, Jr, former part-time Twice a week, Frank other projects as well as last season’s employee, but forever a full-time Urner and his teammates data, the researchers gain the ability Barry family member. Frank just returned would go out to view change. The penguins, from taking part in krill, zooplankton and Long Term phytoplankton are all studied, and each
20 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 delicacy. Protein was away—for the first time had its challenges. served with every meal Palmer Station did, however, grow on and included a “…very him and eventually almost felt like home. healthy variety of pork, When asked to summarize his experience chicken and beef with while living in the coldest climate on earth, occasional others.” Frank paused and, after some thought, said that although he knows education While in Antarctica, is important, “…it is certainly second to contact with others was experience and the ability to adapt.” He limited, but on base continued by saying, “…hard work and part of the food chain scrutinized so that communication with one another was not quick learning were paramount.” Sounds the entire ecosystem can be understood. an issue. “We had good clear radio contact like Frank learned a valuable life lesson; “The climate is changing. It is not within the two mile boating limit and while living on the edge.UB something to believe or not believe in, it further. The only available phones were is happening. We are studying what effect iridium units on station, and there was an Article contributed by Russell W. Whitman with it’s having on the ecosystems and what all-call system that could reach the entire special correspondence by Frank McQuarrie, Jr. we can expect in the future,” Frank told base. Generally, we were well connected; [email protected] the Reporter. WiFi was not at luxury levels, no streaming of Because the Reporter is the newsmagazine videos, but we could check for the food industry, we had to ask about everything and play the the food! As it turns out, the Palmer radio,” he said. Station chefs whipped up some very good meals. Frank informed us that oftentimes Frank’s adventure in there was meat, starch and some vegetables, Antarctica was multi- but “freshies” (fresh food, including faceted and being away nonfrozen vegetables and fruit) were a from family — very far
VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 21 4310UrnerBerryAd.indd 1 7/19/11 9:29 AM X ______Sign here for approval and fax to: 732-341-0891 Date Cattle growing heavier … CAB carcass weights edge higher
Article contributed by Steve Suther, Industry Information Director, USDA Federally Inspected Dressed Weights, Cattle Certified Angus Beef LLC 830 As finished cattle grow heavier each year, Certified Angus Beef LLC has chosen to 810 ® ® adjust the Certified Angus Beef (CAB ) 790 brand weight limit to 1,050 lb., effective Nov. 24, 2014. 770 Pounds
Prior to 2006, the 1978-established 750 subsidiary of the American Angus Association had no weight limit but relied 730 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 on a yield grade requirement. Eight years Source: USDA Urner Barry ago, that was replaced with a ribeye size bracket of 10 to 16 square inches, 1-inch external fat limit and a carcass weight cap compensate. U.S. average weekly steer subprimals, finding most of those would at less than 1,000 lb., as part of the brand’s carcass weights recently eclipsed the increase about a tenth of a pound,” 10 specifications. 900-lb. mark. he noted.
Since then, the North American cattle “As the beef industry continues to evolve, “I don’t think a 50-pound difference in herd continued to decline, and feedlots this brand is actively engaged in discussing the whole carcass weight should make added more weight to each animal to ways to maintain increasing relevance a difference to us,” said Kip Palmer, to our farmer and rancher owners and President of Palmer Food Services, licensed partners,” CAB President John Rochester, N.Y. He serves on the CAB Stika said. Board with Angus producers.
Noting the decades-long up-trend in carcass “The price of corn and cattle tells us those weights (see chart), he said, “Our team has weights are just going to keep increasing,” been walking the meat coolers the past he said, “but the brand specification two years evaluating our brand within the to keep ribeye size between 10 and 16 marketplace.” inches will still maintain consistency in 800-367-0760 the boxes.” CAB Board Chairman for the 2014 fiscal year, Doug Schroeder, Clarence, Iowa, Stika said the science-based decision to (563) 556-0760 said science has always guided the brand, adjust weights was made “parallel to our and data analysis combined with feedback firm commitment to uphold the premium Full Service Brokers of from customers to determine the move and quality of our brand within the economic the timing. realities of the production sector.” BEEF, PORK This is a step we could take to ensure the Certified Angus Beef ® is the world’s & POULTRY brand remains strong and relevant moving leading brand of fresh beef. Since 1995, forward,” he said. packers have paid producers half a billion Domestic and Export dollars in value-based grid premiums Product quality and consistency are always for cattle accepted into the brand. For the first consideration, Stika said. While more information on CAB products and Randy, Cindy, Mark, Shane & Lisa the change could mean another 3% to programs, visit www.CABpartners.com.UB 5% more product from the additional 36 Bluff Street, PO Box 171 2,500 to 3,000 cattle at 30 licensed plants each week, the data show the impact on Dubuque, IA 52004-0171 “…THIS BRAND IS ACTIVELY ENGAGED individual cuts will be negligible. IN DISCUSSING WAYS TO MAINTAIN Fax 563-556-4131 “We looked carefully at the relationship INCREASING RELEVANCE TO OUR between individual carcass weight and FARMER AND RANCHER OWNERS AND
22 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 LICENSED PARTNERS.”
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VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 23 What came first, the chicken or the egg? Or the beef, or the pork, or … How price fluctuations influence category choices
Imagine this, you are of a cell phone calculator). This is what prefaces a phenomenon, at the grocery store, Though they are on a much perhaps previously unnamed, which this checking the meat larger scale, restaurants author would like to call a “protein shift,” section. What’s for have to look at similar or otherwise when a restaurant alters its dinner this week? Looks information in exactly product mix to manage changing food like those steaks are good, the same way in order to costs. Such is the case of a burger chain but are the chicken maximize their profitability increasing breasts a better value? (or, less appealingly, its emphasis Maybe there are some minimize loss). on chicken deals in the seafood offerings to section? You know It’s no secret that beef offset the your family likes prices are at all-time impact of high salmon, but you like highs, or that the beef prices. Error 404: Dinner Not Found cod. Should you get both? globalization of trade affects A protein Can you afford both? market values of proteins. shift can take But what if instead of buying dinner for the form of It may not seem like it, but you are making your family for a week, you had to buy eliminating economic and market-based decisions right dinner for millions of families every week? dishes entirely, there in the aisle (perhaps with the help Companies spend their time and resources or offering ©iStockphoto.com/pioneer111
looking for opportunities in the spreads the option of ©iStockphoto.com/deymos between proteins so they can maintain red meat or No, not this kind of protein market position and also create a sense poultry with a of variety. given entrée, which we are seeing across the QSR and casual dining sectors. Looking at the chart we see Urner Barry’s Beef Index compared to its cousin, the So, next time you’re at the grocery store, Chicken Index. This shows the premium take comfort in knowing that your paid for beef relative to chicken across the grocery list is not unlike the one given whole category, which reached major highs to the purchasing teams at your favorite last year. Although many restaurants and restaurants. Who knows, maybe you retailers had likely purchased some product can put your shopping experience on in advance, that pricing environment your résumé.UB would have made it prohibitively difficult Keeping our promises since 1861 for many people to offer consumer beef Article contributed by Adam Sharkey products at significant discounts profitably. [email protected] Going beyond insurance to serve the needs of our food industry clients. Ratio of Beef to Chicken Index 2012 2013 2014 Product Recall & Contamination 3.50 Recall/Crisis Response & Loss Control 3.25 Ocean Cargo, Storage & Transit 3.00 Rejection/Lacey Act 2.75 Product Liability 2.50 2.25 Michael Lieberman VP Food Industry Insurance Division 2.00 (212) 432-1234 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec [email protected] Source: Urner Barry’s COMTELL
24 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 A look back at crab meat imports in 2014 ... Overseas supply proves to be “good and plenty”
Crab meat imports through November 2014 were up 15% compared to the YTD Crab Meat Imports (Jan-Nov) same time in 2013. Traders reported that 50 for much of 2014, supply from major +15% overseas producers was readily available 40 throughout the year, but at a higher Million lbs. replacement cost. 30
42.0 40.3 20 Major producers, such as Indonesia and 35.4 38.4 34.9 China, shipped more crab meat to the 10 USA in 2014 than in 2013, counter to the perception that raw materials were 0 limited. Other producers like Vietnam, 2010 2011 2012 2013 2014 Venezuela, Philippines and Mexico also Source: USDOC, Urner Barry increased the overall supply sent to the USA in 2014.
Importers reported that seasonal buying interest during the holidays “MAJOR PRODUCERS fell below their expectations especially in the retail sector. Following SUCH AS INDONESIA AND the holidays, demand continued to fall. Discounted prices were seen with buying interest limited for sufficient to ample inventory. CHINA SHIPPED MORE Market price offerings were heavily dependent on sellers’ supply.UB CRAB MEAT TO THE USA IN 2014 THAN IN 2013...” Contributed by MaryAnn Zicarelli | [email protected]
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VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 25 Sanctions lead to the threat of food inflation in Russia … Russia: conflict, sanctions, inflation and new friends To say relations with Russia have animal and plant products within been rocky recently would be a severe Russia, claimed Brazil had increased understatement. their beef exports to Russia by 11,000 tons and their pork exports by 3,100 The tensions truly came to a head over tons in September 2014 compared to the Russian presence in, and actions September 2013. Beef imports overall appearing to be hostile against, the grew by 38,600 tons according to the Ukraine, which Western trade partners agency. Pork and poultry imports (including North America and the however, declined by 37,000 tons and ©iStockphoto.com/Batareykin European Union) took a strong stance U.S. but also Australia, Canada, Norway 23,200 tons respectively year over year in against. Following restrictive monetary and the European Union. September in the absence of imports from sanctions placed on Russia in response North America and Europe. Fish imports to the conflict with Ukraine, Russia The “official” reasons have varied were down 8,100 tons year over year in countered with a host of ongoing trade depending on the country and the food in September, despite increasing imports barriers and limitations on goods spanning question, banning pork over the presence from the Faroe Islands, Chile, Ecuador from food to fuel. of Ractopamine or African Swine Fever, or and Thailand and newly established fish beef due to fears of anthrax. Just this past exporting partners Turkey and Uruguay. In 2014, Russia banned imports of a variety December, on top of the limits placed in of foodstuffs including beef, pork, poultry, the summer, a Russian sanitation watchdog The concern within Russia of course is fish, cheese and dairy from not only the put in place restrictions on poultry imports that with less food entering the country, from Germany over concerns of the avian the food that is made available will be at flu and meat from Italy and Hungary significantly higher prices. With a Ruble P a c k e r s o f due to reports of bluetongue disease. which has declined in value by over 80% Whether these sanctions were legitimate against the U.S. Dollar since August, those LIQUID, or primarily used as justifications for inflation fears appear to be justified. Russia imposing retaliation on Western trade does have domestic producers of most FROZEN, DRIED partners has been hotly debated within the of the goods affected by these sanctions, industries affected. which stand to benefit from the sudden & SHELL EGGS shift in imports. However, expansion in During the process of these sanctions, these industries can be a long process, ESTHERVILLE Russia made an attempt to reach out to leaving Russia still largely dependent on FOODS, INC. alternative nations in order to secure other countries to supply enough food at Estherville, IA a consistent stream of food imports. affordable levels for their population of 712-362-3527 SIOUXPREME Brazil and China were two of the largest over 143 million residents. EGG PRODUCTS, INC. exporters to answer the call, along with Sioux Center, IA Argentina, Chile, Mongolia, Serbia, The situation in Russia is dynamic, with 712-722-4787 SONSTEGARD Switzerland, Turkey and Uruguay. China policy changes occurring regularly since FOODS, INC. was particularly newsworthy as Russia had the sanctions began. Unfortunately, much Sioux Falls, SD 605-338-4642 banned imports of Chinese pork since of the policy appears to be rooted in SONSTEGARD 2004 over concerns of foot and mouth political events rather than food related FOODS, INC. Springdale, AR disease. However, as China is easily the issues, which makes forecasting a timeline 479-872-0700 world’s largest pork producer, representing for resolution nearly impossible. For now, SONSTEGARD around 50 percent of global production, the U.S. and other sanctioned nations of GEORGIA Gainesville, GA Russia appeared to realize that their will have to wait and see if Russia, which 770-534-5644 SUN RISE southern neighbor would be a valuable is rapidly redefining its international FARMS asset in keeping food prices, in this case relationships, will return to the old trade Harris, IA pork, from inflating too dramatically. partners or strengthen bonds, and budgets, SOUTHGATE 712-735-6010 with new friends.UB FOODS, INC. Russia’s Federal Service for Veterinary South Gate, CA and Phytosanitary Surveillance, the body Article contributed by Russell Barton 562-622-6076 which monitors imports and exports of [email protected]
26 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015
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Dated ______Camanchaca Inc. • 7200 N.W. 19th Street • Suite 410 • Miami, FL USA 33126 800.335.7553 • www.camanchacainc.com Pesquera Camanchaca S.A. • El Golf 99-Piso 11 • Las Condes, Santiago, Chile www.camanchaca.cl VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 27 Supply and demand: expect the unexpected ... Unforeseen variables and poultry pricing
Since price is simply a reflection climates. Often this results in already adjusted to more manageable levels of the current supply lighter average live weights and so far in 2015, following the record high and demand situation, a tightened supply, which could prices and extreme PEDv-related volatility determining market price push prices higher if demand is seen in 2014. No matter what protein is for any commodity may active. On the flip side, at times currently competing with poultry on price, seem easy, when in fact, it during the year when climates product substitutes are always a possibility. is anything but. The supply are expected to be harsh and and demand landscape instead they’re ideal for growing, FOREIGN MARKET ACCESS is extremely complex, birds tend to put on more weight Foreign Market Access is something with a multitude of factors than they should. If average live the poultry industry relies on heavily. determining fluctuations on both weights are greater than projected, Most of the time, our export markets are sides of the equation. Here are then processors may be forced to wonderfully dependable, but they can just a few of the many variables sell more product than what’s also be painstakingly undependable. Over that play a major role in how the needed for current demand the last year alone, U.S. poultry has faced poultry market performs. and market values could be bans and restrictions from a multitude of pressured downward. foreign countries. Included on that list WEATHER were both Russia and China, two Excessive heat and frigid temperatures INPUT COSTS of the U.S. poultry industry’s are two extremes poultry producers hope Input costs often include labor, capital top export partners. When they are able to avoid during the growing or land. For the poultry industry, the a foreign country places a process. History, backed up by statistical cost of production plays a ban or restriction on the evidence, shows us that birds are more major role in determining U.S., there is often an unlikely to put on a sufficient amount the break-even point adjustment period where of weight when they face such harsh and subsequent theory the flow of supply slows of value for the cutout. down and market values Corn and soybean meal react accordingly. But just are two poultry production as values may depreciate inputs whose costs are always following the closure of a subject to change, and that change foreign market, if it opens or fluctuation may very well affect or reopens, prices could firm poultry pricing. According to the up or possibly trend higher USDA’s 2014 Corn and Soybean if warranted by an increase Crop Summary, the estimated average in demand. yield for both of these crops is at a record high. Corn prices, specifically, are at levels STRENGTH OF CURRENCY that have not been seen in years. This A strong U.S. Dollar can be both good should lower the cost of production and and bad. For the poultry industry, if the allow processors more “wiggle room” in U.S. Dollar strengthens and the currencies their poultry market valuation. of foreign markets weaken, export values could depreciate. We witnessed this COMPETING PROTEINS not too long ago, when the relationship So, what protein does the poultry between a devalued foreign oil market industry really compete with? The correct and strong U.S. Dollar forced poultry answer may be up for debate, but in processors to discount their reality, poultry competes with all center product in order to keep of the plate proteins to some degree. their export partners The relationship between the industry’s enticed. Conversely, competing proteins was thoroughly if the U.S. dollar documented last year and we already know weakens, poultry that many of those same developments are prices could expected to have a lasting impression here appreciate as LOOK FOR OUR NEW PACKAGING in 2015. It’s likely that the beef industry interest from our has at least another year before we could export partners 507.337.3100 see a break in retail prices. Pork supplies may become even www.turkeyvalleyfarms.com are better positioned and prices have more stimulated.
28 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 BIRD HEALTH AND GOVERNMENT aren’t final and accounted for PERFORMANCE INTERACTION until said product is delivered to A bird’s health and performance is a Just like a strong dollar, the U.S. its rightful owner and that usually touchy subject, but it’s an important government’s actions can be taken costs extra. Recently, fuel prices aspect of poultry production that all as either good or bad, depending have declined, which may relieve participants should be fully aware of. on whether you’re a buyer or a some pressure moving forward. ©iStockphoto.com/memoangeles All types of poultry are vulnerable to seller. Several times throughout the In general though, transportation illness and disease, whether they’re raised year, the USDA issues “Bonus Buys” costs have risen steadily over the conventionally, antibiotic-free or organic. for their School Lunch Program. last couple of years. New rules and Sometimes, what they contract can have Most of these purchases are expected as regulations have not only limited the a debilitating impact on the industry’s they are scheduled seasonally. However, number of drivers on the road, but they’ve available supply. If a certain number of the government has been known on a also restricted a driver’s productivity. birds or flocks are affected, it’s not at number of occasions to initiate a “bonus During certain times of the year, trucking all farfetched to say that market values buy” when certain market conditions is in higher-than-normal demand and could firm up as a result of the now develop; usually problematic ones. although many may not believe it, this can tightened supply. Poor bird health Whether prescheduled or initiated very well affect poultry pricing. If you’re could also have an adverse effect randomly, there’s no willing to pay more to get it or it costs on market values. As recently as doubt that these sort more, then it’s worth more. just a few months ago, China of buys help to tighten banned U.S. poultry following the industry’s available These are just a few of the variables that the confirmation of Avian supply and lend support can have an effect on the supply/demand Influenza’s presence within the to the markets. scenario which ultimately determines country. This, among a number poultry pricing. Clearly, there’s nothing of other reasons, resulted in TRANSPORTATION simple about them.UB even more downward pressure The plant value of a poultry item being placed on an already can be determined during the Article contributed by Terence Wells stymied dark meat market. negotiation process, but all fees [email protected]
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VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 29 Market the application … The menu adoption cycle How you can leverage–and predict– the changing food trend landscape.
Article contributed by Jack Li, adventurous, their appetites are by Managing Director at Datassential, a top “INSTEAD OF JUST MARKETING definition shifting toward earlier stages research company for the food industry. of the cycle. What’s more, the speed of THE PRODUCT ITSELF, THE trends is accelerating; whereas it once What’s the secret to selling more meat BETTER PATH IS TO ALSO took 12 years to move from Inception to and seafood? In a word, it’s “applications.” MARKET THE APPLICATION.” Ubiquity, we predict that timeframe will Customers don’t buy raw beef just because soon be trimmed in half. they want raw beef, they buy it because they want to create something with it. The premise of the MAC is simple — you As a result, today’s consumer is In fact, 57% of raw meat sold at retail is can tell how far along a trend is in its life increasingly seeking earlier trends, and bought with a specific application or recipe cycle based on where that trend turns up. If in particular those in the Adoption already in mind. something is available only in cutting edge stage—think Korean fried chicken, shrimp fine dining restaurants, chances are it’s in and grits, and trendy oyster bars. For Instead of just marketing the product the “INCEPTION” stage; but if you can protein suppliers and retailers, we strongly itself, the better path is to also market find it just about everywhere, then that’s a encourage a similar shift toward the the application. And to do this well, it’s trend that has matured into “UBIQUITY.” Adoption stage as well. helpful to have a sound understanding of (Chart 1) the trends that customers—whether it’s a 2015 Flavors to Consider. Back in 2005, consumer or restaurant owner—are getting Trends are accelerating, and the we used the MAC to predict the growth of excited about. So what dishes will people ADOPTION stage is getting hot! As a flavor that was still barely known at the want in the next year, or five years from consumers continue to become more time, sriracha. Ten years later, “What’s the now—and what can we do to Chart 2 prepare for the next big thing? # STAGE FLAVOR Notes 1 INCEPTION Za’atar +400% menu growth since 2010 Predicting food trends. Food 2 INCEPTION trends follow a common Gochujang Korean staple for rice bowls and grilled meats life cycle, a predictable 3 INCEPTION Togarashi +150% menu growth since 2010 journey spanning four 4 INCEPTION Peri Peri Popularized by Nando’s, a chain that’s poised to expand distinct stages. We call it the 5 INCEPTION Aji Peppers Peruvian is hot! +83% menu growth since 2010 MENUADOPTION CYCLE 6 INCEPTION Stouts Trendy ingredient for beef, burgers, shakes, and desserts (MAC), and it’s proven to be 7 ADOPTION Yuzu +120% menu growth since 2010; often paired with seafood a remarkably accurate tool for 8 ADOPTION Nut Butters (beyond peanut) Almond, cashew, pecan, hazelnut, and pistachio butters predicting the next big thing. 9 ADOPTION Savory Jams Bacon, onion, and tomato jams are up +250% since 2010 10 ADOPTION Harissa Works great with seafood, beef, game, and poultry; +188% growth Chart 1 STAGE Find it at Examples Trends start here. Inception-stage trends exemplify originality in flavor, preparation, Fine dining Trumpet mushrooms 1 INCEPTION and presentation. Ethnic restaurants Za’atar Ethnic markets Togarashi Adoption-stage trends grow their base via lower price points and simpler prep Gastro pubs Kale methods. Still differentiated, these trends often feature premium and/or generally Food trucks Chimichurri 2 ADOPTION authentic flavors. Fast-casual restaurants Lobster roll Specialty grocery stores Pappardelle Proliferation-stage trends are adjusted for mainstream appeal. Often combined with Mainline supermarkets Sriracha popular applications (on a burger, pasta, etc.), these trends have become familiar Mass merchandisers Aioli 3 PROLIFERATION to many. Casual chain restaurants Risotto Gnocchi Ubiquity-stage trends have reached maturity, and can be found across all sectors of School cafeterias Chipotle the food industry. Though often diluted by this point, their inception-stage roots are Family style restaurants Alfredo 4 UBIQUITY still recognizable. Frozen food aisle Pepperjack Dollar & drug stores Spaghetti C-store shelves
30 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 Chart 3 BEEF CUTS next sriracha?” is a question we get asked Menu Adoption Cycle almost every day. Source: Datassential MenuTrends Brisket Sirloin Steak Ribeye T-Bone So what is the next sriracha? Below are ten strong candidates for your business to New York Strip Angus Ground Beef consider. (Chart 2) Kobe Beef Tri Tip Top Sirloin Roast Beef Filet Mignon Flank Steak Putting it all to work for you. If you’re Chuck a value-added meat supplier, use the Shredded Beef MAC to examine your current product Flat Iron Steak Sirloin portfolio. Are your products perhaps Skirt Steak Prime Rib overly focused on the Proliferation and Beef Tenderloin Ubiquity stages? Would it make sense Strip Steak to start shifting your innovation toward Sweetbreads Hanger Steak earlier stage Adoption trends? Short Ribs Heart Marrow Porterhouse Veal And if you’re a commodity meat seller, Tongue Veal Cheek remember that flavor trends are also just as important to your business. INCEPTION ADOPTION PROLIFERATION UBIQUITY Again, 57% of raw meat is purchased with an application or recipe already in mind—so if you want to sell meat, you’ve Get more. Download our free whitepaper on the got to also sell the application. Use the Menu Adoption Cycle at www.datassential.com. MAC to identify interesting trends that make consumers take notice and say, For more information, contact us at 888-556-3687 “Now that’s something I want to make.” or [email protected]. EPD(Chart 60 3 )YRUB ad:Layout 1 7/9/2014 9:56 AM Page 1
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VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 31 A farm for all things ... Aquaculture opportunities for livestock barns, other buildings
For someone wanting to either The Browns purchased the farm 22 years enter agricultural production ago. The original barn on their farm or seeking a way to diversify had been used by the previous owner for their farming operation, housing cows. They also added a new barn aquaculture may offer just such for the grow-out phase of their shrimp an opportunity. operation. Among the buildings the Browns have converted to aquaculture use Barns that currently house for other shrimp producers include: hog or were previously used for barns, turkey and chicken barns, even an livestock or poultry production old school gymnasium and warehouses. may be retooled for use to produce aquatic animals. Ponds Purdue University's Aquaculture Research of just about any size can also Lab has been in existence since 1992 with be used to produce fish or indoor and outdoor facilities. There are 12 other aquatic animals to meet quarter-acre size ponds outside and a 4,000 the growing demand of a rising square foot wet lab inside. world population in need of efficient feed utilization. Ohio State University offers a considerable amount of information and step-by-step Agriculture aquaculture water system farm. Educational institutions suggestions on how to get started in ©iStockphoto.com/defun throughout the Midwest and aquaculture. It also conducts a "Boot central U.S. are offering courses and Camp" through its extension offices for workshops on aquaculture and have been those with an interest in on-hands learning. for several years. The USDA also offers On its website, Ohio State University also information about aquaculture and soilless states that “Aquaculture is agriculture and farming on its Alternative Farming Systems can be a risky business. It can be expensive Information Center website at http:// to get started and difficult to make money afsic.nal.usda.gov/aquaculture-and-soilless- on a small scale. However, we have seen farming/aquaculture. success with people starting small and growing their business. We recommend Aquaculture farms across the country raise careful business planning before many species. Some raise baitfish or frogs undertaking an aquaculture project.” for use by sport fishermen. Others produce various species of finfish and shellfish and While there are numerous types of aquatic sell directly to local customers or market animals to be raised for commercial use CUSTOMIZED INSURANCE them through commercial operations. and various methods of systems which PROTECTION FOR THE Some even produce fish eggs to be used can be used, there are risks of disease, FOOD INDUSTRY in caviar. death losses, weather or environmental problems that can arise, and it is labor One doesn't think of Indiana as a state intensive. Budget planning, knowing the Property and Liability in which shrimp can be produced, but it cost of producing a pound of fish, picking Cargo & Warehouse is being done there. RDM Aquaculture, the right location, soil type and weather Earthquake, Flood and Windstorm located near Fowler in northwest Indiana, conditions for the animals to be produced, USFDA Rejection & Lacey Act produces shrimp in an indoor re-circulating having adequate sources of fresh water and Product Recall saltwater system. Darryl Brown, owner, has knowing where to market the production Foreign Travel a degree in Aquaculture Animal Sciences are just some of the variables to be Call Ray Markley at from Purdue University. His wife, Karlanea considered when thinking about starting 800-350-5647 Brown, and co-owner of the firm has an aquaculture business.UB degrees from Indiana Business College and [email protected] Ivy Tech and is in charge of all testing and Article contributed by Curt Thacker www.shorepointinsurance.com License #0247753 maintaining shrimp health. [email protected]
32 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 an_UrnerBarry_190x260cms_PRESS.pdf 1 21/11/14 15:34
VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 33 Being ready for whatever comes your way … Preppers–a growing market
It’s The End of the World as We Know It – entire array of niche products. Yoder’s and they feel fine. brand canned bacon (smoke flavor added!) boasts a shelf life in excess of 10 years, One thing that never seems to go out of while Mountain House offers buckets of style is talk of the Apocalypse. The end of pouched, freeze-dried food that promises it all has long held a morbid fascination to keep for 12 years or more. Among these for the world, from the Norse Ragnarök to dehydrated, chilled, and canned offerings, Armageddon to Y2K. To some, the end is meat is king. Prepper and vegetarian always near; and it won’t be fun for any of demographics seem to have very little the general population. Mainstream media overlap, with beef, and pork and chicken such as , Mad Max, and featuring in almost every preserved meal The Road all offer a glimpse of life after the plan. The typical prepper’s guide of things end. The common denominator seems to to hoard puts water first, followed closely be that people in general are in for a bad by meat, with a preference for grass-fed time. Food will vanish, looting and rioting offerings. The next protein on the list, is expected, and videos streamed online beans, clocks in on Internet lists anywhere will take ages to buffer. from #10 to #25, right next to the canned ©iStockphoto.com/Creative_Outlet bread (with or without raisins). Many Some people, however, are stacking the online retailers offer bulk purchases of odds in their favor. Apocalypse preppers, Zombie apocalypse? Supply shortage? these post-apocalyptic provisions, with or “survival enthusiasts,” are individuals A hurricane of bees? All of the above? orders varying from a 3-day pack of dedicated to making sure themselves Preppers are ready for it. To supply these military-surplus MREs to a 7-year supply of and their families are ready for anything. survivalists, companies have formed an canned and dried survival food going for nearly $14,000.
Other survivalists are eschewing these corporate options in favor of producing their own food. Dehydrators and pressure canners offer an at-home option to preppers, and online forums include plenty of information from helpful survivalists on how to get started. A common option for preppers is keeping goats for milk, and From the Farm to Deli, others recommend purchasing a cow from a farmer and canning, salting, smoking, we are your Source and storing the entire animal at home. for Turkey! The prepper lifestyle is by no means new, Buyers & Sellers Domestic & International with some preppers dating back to the Cold War. However, it is rapidly growing. “Alliance Builders” of: More than three million Americans are Whole Birds, Bone in Breasts, Raw Meats, Tray Pack Parts, Further Processed Products, currently classified as preppers, and many Turkey Hatching Eggs, of the most prepper-oriented retail outlets Turkey Poults, Live Contracts and wholesalers are less than 20 years old. More people gather under the prepper Jeff Stauffenecker • Carl Wittenburg banner every day, with dozens of growing Sara Almich blogs, forums and websites dedicated to 605 Crow Lake Street handling the end times. As long as people Brooten, MN 56316 remain fascinated with the apocalypse, the Phone: 320-346-4033 prepper market will grow, and the world For questions, suites or special requests, please contact Lynn Dekovitch or MaryAnn Zicarelli at 732-240-5330 Fax: 320-346-4038 will become a little more disaster ready.UB Toll Free: 1-877-BUY-TURK or email [email protected] or [email protected] Article contributed by Jake Muldowney Urner Barry • P.O. Box 389, Toms River, NJ 08754-0389 • Fax 732-341-0891 www.PRoTeiNALLiANCe.com [email protected] Register for the conference and view the Urner Barry Antitrust Statement and Registration Procedure and Cancellation Policy at www.urnerbarry.com/executive 34 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015
X ______Sign here for approval and fax to: 732-240-6332 Date SUNDAY PLAN APRIL 26 Registration 1:00 - 6:00 p.m.
One-of-a-Kind – Welcome Reception – 6:30 - 8:30 p.m. Poolside at Caesars Palace PERFECT OPENER 4 Meet and greet 4 Develop strategies 4 Focus your attention 4 Set your goals
MONDAY COMPETE APRIL 27 GET INTO THE RACE...
David Walter Bond, Wasserman Back by popular The Cook demand! Political Report, Think. Execute. will explore Dominate. the nooks and Walter will share crannies of the his principles POLITICAL to be a PEAK LANDSCAPE. PERFORMER!
TUESDAY SUCCEED APRIL 28 PULL OUT ALL THE STOPS... Datassential’s Managing Director, Solutions, Jack Li - Learn about the FIVE KEY TRENDS impacting how consumers eat, what they want and where the foodservice industry is headed. EXPORT FORUM - Hear the LATEST UPDATES on the issues and challenges impacting the poultry and egg export arenas. EGG SESSIONS will highlight the factors leading to RECORD MARKETS including: Exports, Consumption, Production, and Prop. 2’s National Impact. REPORTER ROUNDTABLES AND POULTRY OUTLOOK - Listen to Urner Barry’s egg and poultry reporters dissect the PAST and PRESENT of the markets. CattleFax CEO, Randy Blach, will take a look at what the FUTURE might hold for the chicken and turkey industries.
You are cordially invited to attend Urner Barry’s 2015 EXECUTIVE CONFERENCE & MARKETING SEMINAR EDUCATE ENTERTAIN INSPIRE
Where Caesars Palace, Las Vegas When April 26-28, 2015 Time Conference registration begins Sunday, April 26, 2015 at 1:00 p.m. Conference concludes Tuesday, April 28, 2015 at 7:00 p.m. For questions, suites or special requests, please contact Lynn Dekovitch or MaryAnn Zicarelli at 732-240-5330 or email [email protected] or [email protected] Urner Barry • P.O. Box 389, Toms River, NJ 08754-0389 • Fax 732-341-0891 Register for the conference and view the Urner Barry Antitrust Statement and Registration Procedure and Cancellation Policy at www.urnerbarry.com/executive VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 35 The food industry is watching this global economic behemoth … The shipping industry looks to get back in black
Shipping Industry Stock Price Change Source: Urner Barry, Jan 01, 2014 - Dec 31, 2014 Yahoo Finance
A.P. Moller Maersk -78.98% Exmar NV -7.12% Teekay Tankers Ltd. 28.75% KNOT Offshore Partners LP -20.85% Navios Maritime Holdings Inc. -63.17% Navios Maritime Partners L.P -46.81% Nordic American Tankers Limited 3.81%
©iStockphoto.com/ GBlakeley -80% -40% 0% 40% 80%
“DEMAND IS EXPECTED TO GROW AS Each year, nearly 90,000 ships move How is the future shaping up? Demand is THE WORLD POPULATION GROWS, more than 9 billion tons of cargo around expected to grow as the world population BECOMES WEALTHIER, AND BUYS MORE the globe. This includes, among other grows, becomes wealthier, and buys PROTEIN THAT NEEDS TO BE SHIPPED.” things, goods, agriculture and energy. The more protein that needs to be shipped. refrigerated market is used in the meat, According to Drewry’s Container Annual poultry and seafood industries to move Review & Forecast 2014/25, a market product from one country to the next. It is intelligence forecast provided to carriers, estimated that nearly 35-45 percent of the shippers, banks, ports and investors, Your Direct Source annual tonnage in the reefer market, as it the industry should be better financially is known, is dedicated to moving products because of three main trends: “carrier Premium red King Crab from these industries. It is no wonder then revenue is increasing again due to more Traceable • Sustainable why the shipping industry is so important rapid growth, costs are falling faster than to the food industry and why it has gotten rates and some carriers are coming out of Red King CRab • Snow CRab so much attention, especially with the the red.” dungeneSS CRab • alaSKa Cod West Coast port congestion in the news Phone: 206.284.1947 almost daily. The performance of the stock prices of E-mail: [email protected] many shipping companies reflected the Web: www.keyportfoods.com The reefer industry has faced some downturn in the industry. With things challenges in recent years. Since the expected better, it will be interesting to see financial crisis, profitability has been if investors catch on.UB limited or non-existent, but the industry was able to edge out a slight gain in 2013 as Article contributed by Gary Morrison a whole, but many companies still operated [email protected] in the red. The major driver of this has been that rates have not been Shipping Industry Profitability $15 able to keep pace with 14.0 $10
the increase in costs and Billions $5 inflation. The profitable 0.2 $0 year in 2013 was aided -$5 by an industry-wide -2.7 -5.4 -$10 increase in shipping rates -15.0 -$15 along with increased -$20 scrapping of vessels that 2009 2010 2011 2012 2013
reduced capacity. Source: Urner Barry, Maersk Line North American Refrigerated Services
36 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 X ______Sign here for approval and fax to: 732-240-6332
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COSFF 9.2014 Urner Barry 14112 Catering to generation Y ... The millennial boom on the food industry
The Millennial generation is NPD Group study, “The Future the largest cohort since their of Eating: Who’s Eating What Baby Boomer parents. As they in 2018?” enter into adult roles, their values, beliefs and tastes become Comparatively, Millennials even more influential and may have colloquially been dubbed impact food trends to a greater “Generation Salad,” with an degree. At the same time, Baby emphasis on health instilled Boomers are entering into the at a young age. Also known next phase in their lives—becoming as Generation Y, Millennials empty nesters, dealing with notoriously know what they the complexities of aging and want and how they want it—and health issues, and entering into they usually want it fast. They retirement. With our two largest tend to be budget-conscious, generations transitioning into but also value quality and are pivotal new roles in society, it ©iStockphoto.com/badmanproduction willing to pay more for foods will be interesting to see how the with those perceived values. food industry will react and adapt to the they’re moving into their golden years, Heavy importance is placed on knowing changing environment. they’re becoming more conscious of their where their food comes from and how it health and well-being. As a result, the is prepared. Baby Boomers were the first generation boomers will be looking to foods such to eat away from home more regularly, as whole grains, protein, and calcium as Being that they are our first truly digital and their influences have certainly well as foods that are low in saturated fat, generation, Generation Y may have less shaped subsequent generations. Now, as cholesterol and sodium, according to an brand loyalty than previous generations. Advances in technology have put the world at their fingertips, so comparing different options and prices is all too easy. Not only do they want to customize everything to their specific needs, but they want to do it quickly—ordering food from their phone or tablet and demanding it to be hot and Domestic & International Suppliers ready when they get there. of Perishable Food Products Millennials are also the most culturally and racially diverse of all the generations CHICKEN • TURKEY to date—and their food tastes show it. BEEF • PORK • SEAFOOD Not only are they willing to try different ethnic foods, but many in this generation appreciate the added sense of culture and choose to integrate it into their regular diet.
Millennials value convenience and quality, along with social and environmental responsibility, which ultimately translates to their food choices. Now more than ever, For domestic inquiries, please contact Vincent Louis at as their buying power grows, attention must be paid to the wants and needs of the current generation. It’s now up to retailers, 718-542-4401 restaurants and manufacturers to identify www.vistafood.com and cater to these ever growing and ever changing generational demands.UB [email protected] • [email protected] Article contributed by Nicole Bessemer Bronx, NY • Blue Springs, MO • Hope Mills, NC • Forest, MS San Antonio, TX • Manchester, NH • Oceanside, CA [email protected] 38 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 39 Lobster traders have come to expect the unexpected ... American live lobster Just when American live lobster traders got “... THE 2014 SEASON used to the glut of lobsters, the 2014 season started late and weather interfered with fishing STARTED LATE AND efforts resulting in scattered supply and a year WEATHER INTERFERED WITH of consistently higher priced product. FISHING EFFORTS RESULTING The four year average price is indicated in the chart by the orange line, while monthly average IN SCATTERED SUPPLY ...” prices; the blue line, clearly fluctuate both above and below the average, with years prior UB Lobster, American Live, FOB New England Monthly Avg. to 2014 showing some great variation. What Yearly Avg 1 ½ lbs. Halves changed in 2014 is that the valleys remained 4 yr avg higher and closer to the 4 year average price 11 point and the yearly average price (red line) 10 was the highest in five years. High prices were 9 consistent in summer months; unlike past 8 $/lb. years, due to the fact that the new-shell lobster $6.61 7 season started later than in prior years which meant that price quotations for hard-shell 6 lobster dominated the market.UB 5 4 2010 2011 2012 2013 2014 2015 Contributed by MaryAnn Zicarelli [email protected] Source: Urner Barry
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VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 41 Making room for mega-ships … Panama Canal update At the time of this writing, the expansion of the Panama “…THE Canal is 85% complete and is EXPANSION expected to open sometime in OF THE mid-2016. In November 2014, PANAMA the last of the 16 giant rolling CANAL TO gates for the locks was delivered. HANDLE The gates are part of a new lock system with three consecutive THE HUGE chambers to move vessels up POST- and down on the Pacific and PANAMAX Atlantic sides that allow ships to MEGASHIPS transit the Isthmus of Panama. MAY BE Each gate is approximately 11 COMING AT stories tall, weighing 4,200 A CRITICAL tons. In December, two of the TIME.” eight gates had been installed on the Atlantic side, and in In another major milestone for the Panama Canal Expansion Program, the electro-mechanical installation phase, mid-January 2015 the first of the one of the most important of the project, has begun with the installation steel rolling gates. All gates are to be installed by mid-2015. Photo credit: Panama Canal Authority. gates was installed on the Pacific side. By mid-2015, all of the gates—8 on the The completion of the expansion of the critical time. Congestion due to traffic Atlantic side and 8 on the Pacific side—are Panama Canal to handle the huge post- and ongoing labor disputes at West Coast scheduled to be installed. Panamax megaships may be coming at a ports has many shippers looking to divert to the East Coast. Several East Coast ports, including Baltimore and the Port of Virginia in Norfolk, are ready to handle the massive ships while others are working to deepen Innovation That Delivers and widen channels, and installing the huge cranes to accommodate the massive ships. A Variety of Housing Systems Currently the canal can handle Panamax ships hauling about 5,000 twenty-foot equivalent units (TEU’s) or containers. Once the expansion is completed, the post-Panamax ships will be capable of hauling 12,000 TEU’s which are already accommodated at West Coast ports.US
Article contributed by Paul Brown Jr. [email protected]
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42 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 CTB ADVERTISING Ad No. CT-2530/201502 Chore-Time X ______Urner Barry Reporter Sign here for approval and fax to: 732-341-0891
Dated ______Pigs feeling pressure … Winter slide in hog prices could temper herd expansion, late 2015 slaughters When the government’s hogs and pigs being sent to slaughter instead, rather than survey was being conducted in early held back for breeding, the weekly data December, 2014, lean hog futures were deserve more watching, said Ron Plain, riding a bullish trend and had just agricultural economist at the University of recently hit new highs in the summer Missouri. The gilt percentage in slaughter 2015 contracts. can be skewed during the holiday weeks or at other times as well by such things as Futures pointed to another highly split-sex feeding in which large groups of profitable year ahead, encouraging just one sex of pigs may come down the producers to expand their herds and take processing line. advantage of the higher prices to come. ©iStockphoto.com/lnzyx has put pressure on futures prices during Hogs reach slaughter weight at about six But in the seven weeks that followed, December and the first half of January. to 6 ½ months of age, so the majority of the outlook for summer 2015 prices and this year’s hog supply has already been profitability turned considerably less rosy. From Dec.1 to mid January, June lean hog determined unless disease again becomes a futures slid more than 11%, or about $23 major factor. Cutbacks in plans for spring The U.S. Department of Agriculture’s per head. August futures during that same farrowings could affect slaughter rates for a survey showed that producers had period fell about 8%, or about $16.50 a portion of the fourth quarter.UB increased the breeding herd by 3.7% head. The price declines along with added from a year earlier and intended to boost concerns about slowed exports paint a Article contributed by Curt Thacker the number of sows giving birth during less profitable outlook for producers in [email protected] the winter by nearly 4% followed by an 2015 compared with early December, increase of 3.2% in spring farrowings. brokers and analysts said. Question is, will producers react to these signals? Part of the year-on-year increase is the GET CONNECTED!! result of heavy disease losses from the In recent weeks, there have been some Bringing Buyers and previous year due to the rapid spread of the anecdotal reports of more heavy gilts, or Sellers together Porcine Epidemic Diarrhea virus. PEDv young female hogs that have not yet given led to the death of millions of young pigs, birth, being shipped to market. Perhaps since 1967! estimated at 8 to 9 million head following some producers are changing their minds its entry into the U.S. in May 2013 with about expanding their herd. the majority of those in 2014. PEDv also resulted in ongoing breeding problems The University of Missouri’s weekly for some sows and second or even third analysis of sow and gilt slaughters has NATIONAL POULTRY & FOOD rounds of the disease in a portion of the shown an increase in the mix of gilts in DISTRIBUTORS ASSOCIATION animals, according to industry sources total slaughter at a rate of 3.8% and 4.8% Mission: To promote the Poultry and Food Dis- and veterinarians. above a year ago in the latest two weeks. tributors, Processors, and Allied industries by bringing them together and providing a forum to foster long term business relationships. Though PEDv remains widespread, the That may indicate a change in the disease is having less impact on the animals farrowing intentions for the second quarter Processors • Distributors overall than it was at this time a year ago. and later on by some producers, analysts Through extensive efforts by animal health said. Taking $20 or more dollars per head Brokers • Traders officials, producers and others, the nation’s of profit out the equation for the year Retail Buyers swine herd has more immunity to PEDv, ahead could certainly make producers Transportation Companies improved biosecurity measures are in reconsider their plans for herd expansion place and there is a sense that it is under down the road but it’s too late to affect Supply Companies better control. first quarter and April farrowings because 2014 Osborne Road • Saint Marys, GA 31558 those animals are already bred. A combination of factors, including, 770-535-9901 among others, concerns about increased While the drop in futures prices and Fax: 770-535-7385 supplies ahead, heavy hog weights and declining outlook for profits this year are www.npfda.org slowed export sales in recent months, signals that may have led to more gilts [email protected] VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 43 Beefing up the numbers ... What to know about cattle herd expansion
Everyone’s talking different perspective about herd expansion and circumstance to these days. Record consider based on a high beef prices and number of factors. the smallest cattle herd Two key variables in over 60 years has always in consideration prompted speculation are profitability, which over the past year is clearly evident with as to when we’ll see record calf prices, and expansion of the the other, pasture nation’s cattle supply. conditions and Here are a few things feed availability. you need to know. Pasture conditions have The USDA’s cattle undoubtedly improved, inventory report however, there are still released in late January areas of the country showed the number affected by drought
of cattle and calves in ©iStockphoto.com/jmt0826 that are less able to the U.S. as of Jan. 1 support additional was up 1.4% from the upwardly revised increased profitability motivates producers animals, and therefore are not at full year ago figure, putting both 2014 and to expand their cattle population. The stocking capacity. Lingering dry conditions 2015 supplies well above overall industry cattle cycle--which refers to cyclical in the Southern Plains region will certainly estimates, and broke a string of seven increases and decreases in the cattle herd have an impact on the rate of expansion consecutive years of smaller supplies. This over time—averages 8-12 years in duration. seen in those cattle producing states. figure came as a bit of a surprise to many Throughout the cycle, changes in price The availability of forage and feed may in the industry, and suggests that herd warrant fluctuations in cattle numbers determine the difference between culling expansion is certainly underway. that are both positive and negative. What’s an open cow—one that did not become important to keep in mind is that ranchers pregnant—versus keeping her for one more Total cattle numbers have technically been across the country each have to assess attempt during the next breeding season. on the decline since 2007. To add insult what’s best for their herd. If it’s economical to manage and feed for to injury, severe drought conditions in a few months, and results in a profitable more recent years caused aggressive herd Cow/calf operators have done well over calf the following year, then it may make liquidation in the affected areas. One of the past year, and rightfully so. The cattle sense for some to do so. Each rancher those affected areas just happens to be ranching business fluctuates, making understands the performance and genetics the biggest cattle producing state in the some years good and some years not so of his or her cattle better than anyone, so country—Texas. Since then, beef prices good, so hardworking cow/calf producers these decisions are more exclusive than one have gradually increased and in 2014, deserve every bit of success when it comes. might think. rapidly appreciated to new all-time highs. Ultimately, when it comes to expanding the herd, each individual rancher has a Once the expansion phase begins, it With less animals, there’s less beef. When still takes a few years for the effects to supply decreases, and demand stays nearly be realized. There are dozens of factors the same, prices inevitably go up. Despite that can affect the supply and demand record high beef prices hitting retail this “WHAT’S IMPORTANT landscape for beef, and therefore prices past year, consumers have stayed fairly TO KEEP IN MIND can change for a number of reasons. An loyal and continue to purchase beef. increased supply situation would suggest a Ground beef acted as the category’s own IS THAT RANCHERS break in the record high beef prices we’ve product substitution over more traditional ACROSS THE become accustomed to. Herd expansion steak options, but nonetheless beef sales efforts are certainly evident, and watching have so far reflected healthy demand COUNTRY EACH weather, feed costs and other market from consumers. HAVE TO ASSESS drivers closely will be key to understanding market movement.UB High prices and profits are a signal to WHAT’S BEST FOR step up production. Prices paid for young THEIR HERD ...” Article contributed by Jamie Chadwick feeder cattle hit record highs in 2014. This [email protected]
44 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 Mexico’s Meat Council
Mexico’s Meat Council is a leading organization representing some of the most prominent meat producers and processors by promoting the meat industry’s development since 1985.
MISSION: VISION:
To promote meat consumption To become the leading representative through the representation of the of Mexico’s meat production and Council members’ interests that processing industry. foster competitiveness, development and growth in the industry.
COMECARNE, or Mexico’s Meat Council, is comprised of two types of members: • MEMBERS: Companies that are in charge of processing and adding value to meat raw materials, thus providing finished goods for the consumer. • ASSOCIATE MEMBERS: Professionals serving the commercial meat trade in various capacities, including: raw materials, ingredients, chemical products, microbiological controls, certifications, packaging, machinery, refrigeration services, logistics, cold storage and education, among others.
WEB: PHONE: E-MAIL: www.comecarne.org +52 55 55897771 [email protected] VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 45 Frequently faced exposures in the food industry … Ensuring your business is insured a Q&A with Foa & Son’s Michael Lieberman
Contributed by Michael Lieberman For the seafood industry, outside of the pure may be some other, I’ll call them, “bells and [email protected] recall expenses, which can be large dollar whistle” type coverage enhancements, but the values, most executives worry most about the primary role of a liability policy is to provide the Urner Barry’s Reporter had a few moments future economic damages resulting from a well 3rd party bodily injury and property damage to catch up with Foa & Son’s Michael publicized recall event. The loss of a major defense and settlement coverage. Lieberman, Vice President at the longtime customer and the cost to reestablish a brand in international insurance the marketplace are major first However, there are other recall expenses broker based in New York party impacts that a company including: the value of the contaminated goods; City. Lieberman specializes must consider. the loss of profits on an ongoing basis; your in developing insurance public relation expenses in dealing with the coverage packages for the Putting the 1st party recall; and your costs to reestablish your brand food and seafood industry. exposures aside, what are presence in the marketplace. These expenses are Lieberman’s programs tackle the 3rd party impacts that not included in a typical liability policy but are frequently faced exposures need to be considered in a covered in a Contamination & Recall policy. in the food industry; recall scenario? This policy can be endorsed to cover 3rd party exposures that are commonly claims of economic damages, including your uninsured or under-insured If you look at any vendor customer’s reputational damage and their loss of when using standard, off- agreement issued by an gross profits. the-shelf insurance products. Michael Lieberman institutional In the following interview, buyer, you will More and more Insurers “I THINK IF YOU we spoke with Lieberman about a lesser quickly see that there are a are participating in this SPEAK TO A SEAFOOD known insurance issue involving recalled number of 3rd party liabilities area, which is a good thing EXECUTIVE OR A and contaminated products that could that a seafood company needs for insureds from a pricing RISK MANAGER OF A leave seafood distributors in a precarious to prepare for if their product perspective. Still, one insurer’s SEAFOOD COMPANY, position without the proper policy. is involved in a recall event. form can differ greatly from THEY WOULD TELL YOU For instance, sellers need to another insurer’s form, so pay THAT FOOD SAFETY When it comes to risks or exposures, indemnify their customer for the close attention to the policy’s ISSUES ARE AT THE TOP what seems to be the emerging hot customer’s recall costs. However, wording when considering the OF THEIR LIST.” topic in the seafood industry? those costs are minor in coverage. comparison to claims of damage I think if you speak to a seafood executive or a to brand reputation and future loss of earnings. Any other interesting facts about risk manager of a seafood company, they would contamination/recall policies? tell you that food safety issues are at the top of What type of insurance is available their list. to protect a company from the In the contamination/recall insurance world, financial impacts of a there is a considerable amount of value that can Why do you think that is contamination event, be found beyond the financial protection. the case? whether requiring an official recall or not? For instance, most of these policies offered in the There has been a great deal of marketplace include some form of crisis response. focus placed on the rolling out There is a misconception So if a company believes they may have a of Food Safety Modernization among some that liability contamination situation, the policy provides the Act. The good news for the insurance will provide insured with some of the best recall talent in the seafood industry is that we’re comprehensive protection in a United States. These crisis management firms ahead of the curve, mainly due contamination and/or recall typically will have food scientists and ex-FDA to the fact that the industry has scenario. Unfortunately, that personnel on staff that can assist in a number been operating under HACCP is not the case. of areas. In many ways, the premium paid for for many years. HACCP plays the financial protection offered through the a major role within FSMA. Liability insurance should contamination/recall insurance, also serves as a only be expected to provide retainer to have this recall talent on stand-by.UB Putting FSMA aside however, we’ve seen quite protection for claims that your product either a few high profile food recalls over the past caused bodily injury or damage to property of Michael Ramsingh contributed to this article few years. others. Depending upon the policy form, there [email protected]
46 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 47 FEEDLOT A feedlot is a facility wherein cattle gain weight before being sent to a packing house. Cattle purchased to go into a feedlot areJ called feeder cattle. In the feedlot, cattle are given a high-energy ration of feed containing high-quality cereal grain and roughage THE CATTLE CYCLE sources which promotes the efficient developmentason’s of lean muscle tissue and helps The cattle cycle refers to cyclical increases and decreases in the cattle herd over time. deposit intramuscular fat, or marbling. After animals exit the feedlot at market weight In general, the cattle cycle is determined by the combined effects of cattle prices; the they are called fed cattle. time needed to breed, birth, and raise cattle to market weight; and climatic conditions. GRASS-FED AND GRAIN-FED BEEF If prices are expected to be high, producers slowly build up their herd sizes; if prices are expected to be low, producers reduce their herds. The cattle cycle averages 8-12 Most cattle in the U.S. will graze on grass—so technically one might argue years in duration, the longest of all meat animals, but the effects of persistent dry that these animals are “grass-fed”,F however, the USDA requires conditions on pastures and harvested forage supplies can shorten or extend cycles. those making a marketing claimoods of grass fed to exclude the Source: USDA ERS website The amount feeding of grain or grain by-products to their cattle, of money and therefore these animals cannot enter the feedlot stage BEEF PRODUCTION INCREASED PROFITABILITY on resources it takes of animal production. They must also have continuous DECLINES due to less calves fed cattle gives incentive for producers to add weight to available and less animals to access to pasture during the growing season. Hay, to increase cow population. cattle is called the go to feedlots. As a silage, crop residue without grain and other roughage result beef prices cost of gain. I increase. CALF POPULATION sources may be included as acceptable feed sources in This includes INCREASES along a grass-fed program. The grass-fed, or grass-finished, costs for feed, nc. CATTLEMEN with feedlot sector of the U.S. beef industry is a small but growing supplements and RETAIN animals as cow/ niche. In other parts of the world such as Australia, New FEMALES calf operators equipment. Zealand and in Central and South America cattle will for breeding have financial commonly graze on pasture for their entire lives after being purposes incentive after seeing weaned from their mother. Beef to produce higher calf animals. prices. This supports GRAIN-FINISHED Veal • Pork cow market BEEF Beef is known for: More marbled cuts and GRASS-FINISHED prices and lean PRODUCTION efficient growth and as a Market weight: Leaner cuts and natural boneless RISES feeding environment beef prices. result prices start 1300 lbsPoultry • offal Typical growing time: to decline. Calf 1000 lbs 18-24 months population increases COW POPULATION and calf prices decline. Feed source: 3 years Grass, forage, grain DECLINES and results in a Key production regions: decline in calf numbers. Calf LOWER CALF PRICES provide incentive Grass/grass-based forage North America prices start to increase. to reduce the size of cow herds. Cow tHoAustralia,M Newa Zealand,S slaughter and lean boneless beef become Central and South America more plentiful. luCaCCIoNI Cattle Cycle PreSIdeNt
208 e. HeleN road e High PalatINe, Il 60067 Cattle are commonly fed Low
Cattle Pric two times a day in a feedlot Grass-fed cattle in and can gain 2–4 lbs New Zealand. 22 per day there. ( 8 4 7 ) Photo Courtesy of Beef + Lamb New Zealand Source: Urner Barry, CattleFa 3 5 8 - 9 9 0 1 x
Cell: (847) 431-8444 23 [email protected]
48 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 X ______Sign here for approval and fax to: 732-341-0891
Dated ______This excerpt from Urner Barry’s new publication, The Beef Book: Fundamentals of the Beef Trade from Ranch to Table, shows the Cattle Cycle.
THE CATTLE CYCLE The cattle cycle refers to cyclical increases and decreases in the cattle herd over time. In general, the cattle cycle is determined by the combined effects of cattle prices; the time needed to breed, birth, and raise cattle to market weight; and climatic conditions. To learn more about this new resource, go to If prices are expected to be high, producers slowly build up their herd sizes; if prices www.thebeefbook.com are expected to be low, producers reduce their herds. The cattle cycle averages 8-12 years in duration, the longest of all meat animals, but the effects of persistent dry conditions on pastures and harvested forage supplies can shorten or extend cycles. Source: USDA ERS website
BEEF PRODUCTION INCREASED PROFITABILITY on DECLINES due to less calves fed cattle gives incentive for producers available and less animals to 100 to increase cow population. , Chapter 8: ...... 100 go to feedlots. As a Chapter 6: Food Safety: HACCP .. 74 Animal Health & Wellness ...... CONTENTS ..38 101 Protection from the Elements result beef prices Inspection & Inventory Management ... 74 ...... Evaluating Ossification on a Carcass Maintaining Cattle Health 102 increase. CALF POPULATION Food Safety and Handling Procedures ...... Evaluating the Size and Shape of 38 Cattle Diseases 103 Chapter 1: A Brief History 4 ...... Food Safety Responsibilities of U.S. 75 INCREASES along ...... 4 Rib Bones on a Carcass Handling 104 Of The Beef Packing Industry Government Agencies ...... CATTLEMEN with feedlot ...... Evaluating the Color and Texture of 39 Chapter 8 Review Cattle Drives ...... 4 ...... General Guidelines to Ensure a Safe .... 76 RETAIN animals as cow/ 6 Lean Muscle on a Carcass 39 Major Cattle Trails 1866-1890 ...... Supply of Beef for your Customers...... 77 ...... Ungraded Carcasses FEMALES calf operators Beef Cattle/Dairy Cattle 6 7 Steps of HACCP Program 78 Chapter 9: Beef Production & 106 ...... for breeding ...... 6 Carcasses that Possess a 40 The Environment 106 have financial Cattle Ranches ...... Foodborne Illnesses ...... 9 Very Dark Meat Color 40 Livestock & Waste 107 purposes incentive Railroads & Refrigeration ...... Storing/Handling ...... 80 ...... Yield Grades 41 108 after seeing Swinging Beef to Boxed Beef 10 ...... Temperature Guidelines Water & Land Usage ...... to produce ...... Chapter 1 Review Processing Cows and Bulls ...... 42 81 Rendering and Recycling 109 higher calf Ground Beef Cooking ...... animals. 12 Branded and Certified Programs 82 Transportation 110 ...... Temperature Guidelines ...... prices. This Beef Processing: From the 43 ...... Chapter 9 Review Chapter 2: Cattle Breeds 13 ...... Chapter 6 Review supports ...... Cattle to the Box 44 112 Bos Indicus 13 ...... 84 ...... Chapter 4 Review ...... 112 cow market BEEF Bos Taurus Chapter 7: Preparation 84 Chapter 10: Statistics ...... prices and lean Breeds of Cattle Commonly Used 14 ...... 46 Beef Tenderness Economics 113 PRODUCTION ...... Chapter 5: Beef Cuts & Prices 47 SNAP ...... 114 boneless RISES and as a in Beef Production 16 ...... Shear Test Results as an Indication 86 ...... Primal Cuts of a Beef Carcass 48 ...... 115 Crossbreeding 18 ...... of Beef Tenderness 87 Meat Consumption ...... beef prices. result prices start ...... 48 Chapter 2 Review Ordering Specifications ...... Aging Beef ...... 88 U.S. Imports & Exports of Beef 115 to decline. Calf ...... Fat Limitation Options 49 88 Cattle Inventory 116 population increases ...... 20 ...... The Maillard Reaction ...... 20 Using IMPS 50 88 Grading Percentage 117 COW POPULATION and calf prices decline. Chapter 3: Cattle Production ...... High and Dry vs. Low and ...... Slow ...... Key Stages of Cattle Production 21 Primal Cutting Styles 52 Cooking with Dry Heat 90 Popular Beef Cuts ...... DECLINES and results in a Cutting Tests/Yields .. 53 120 Cow/Calf Operation ...... 21 Cooking with Moist Heat 92 decline in calf numbers. Calf LOWER CALF PRICES provide incentive 53 ...... Backgrounding Operation 21 Factors Affecting Availability and Price Cut Finder for Foodservice 94 Glossary to reduce the size of cow herds. Cow ...... prices start to increase. Stockers ...... 22 Market Resources 54 122 ...... Steak Temperatures ...... slaughter and lean boneless beef become Feedlot ...... 22 The Beef Sirloin 56 94 Review Answers ...... Slicing Beef: What You Need to Know more plentiful. The Beef Loin 58 ...... Grass-Fed and Grain-Fed Beef 23 ...... and Why 95 ...... The Beef Chuck 60 ...... Cattle Cycle The Cattle Cycle ...... Tools of the Trade 96 Beef Cattle Production for 24 The Beef Round 62 ...... Ground Beef ...... The Beef Rib 64 Fall-Weaned Calves ...... 26 Key Terms Used to Describe 97 ...... 65 ...... Major Beef Exporters to the U.S. 28 Value Cuts Ground Products 98 ...... 65 ...... Chapter 3 Review Ground Beef Chapter 7 Review Trimmings ...... 66 ...... 30 Variety Meats 67 Chapter 4: ...... 30 By-Products ...... 68 e Packing, Processing & Grading High ...... Beef Products and Weight Ranges 72 Prior to Harvesting 30 ...... As can be seen from the ...... Chapter 5 Review Inside the Packing Plant ...... 31 Religious Slaughter Methods 33 Table of Contents, this book Low ...... Pricing Cattle on a Grid 34 Cattle Pric ...... Making Cuts of Beef 35 will help people of all educational ...... Grading of Beef ...... 35 Evaluating the Marbling of Beef ...... 36 and professional backgrounds Canadian Beef Grading Standards...... 36 Wagyu Beef Grading Standards...... 37 develop a deeper understanding 3 Source: Urner Barry, CattleFa Seasonality of Marbled Beef ..38 x Evaluating the Maturity of a Carcass of key aspects of the beef industry. 2 23
VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 49 ‘Egg’-ceptional programs generate incredible results … AEB grows egg consumption
Contributed by Joanne C. Ivy, CAE to 260.7 eggs per person in 2014, which advertising, public relations, social media President & CEO, American Egg Board is the highest in 30 years, and marks the and retail promotional efforts, also played fifth consecutive year that egg consumption an important role in this success. Egg The American Egg Board (AEB) has an has increased. producers’ investment into AEB enables extraordinary team and their work has the success of this national marketing — had a huge effect on increasing egg and According to Nielsen, retail egg category all of which drives demand for eggs and egg product consumption and demand. sales grew an incredible 11 percent last egg products. Consumer demand for eggs continued its year. Unit volume sales (equivalized dozens) impressive growth in 2014. USDA reports were up 2 percent, growing by 54 million Here is a look at a few key results in 2014 that Per Capita Egg Consumption grew dozens vs. 2013. The average price for a that contributed to this growth. dozen eggs averaged $2.11 in 2014, up 17 cents from the previous year. CONSUMER MARKETING Egg Sales Top $5 billion! With new print ads, customized radio Retail Egg Category Sales Despite the higher retail prices, which spots and a robust online presence via typically dampen consumer demand, unit digital display, search and social media, the $5.5 billion volume increased. In fact, the growth rate Incredible Egg “Wake Up to Eggs” national
$4 billion for egg sales in both dollars and units were advertising and marketing campaign double that of 2013. reached 93 percent of AEB’s target $3 billion audience at a frequency of eight times. $2 billion All of AEB’s programs are recognized for
$1 billion being exceptional, generating incredible The “Wake Up to Eggs” ads appeared in results. AEB’s award-winning marketing top-tier magazines such as Every Day with efforts, including “Wake Up to Eggs” Rachael Ray, Food Network Magazine and
Sustainable!
America’s Largest Producer/Marketer of Fresh Eggs
Contact: Alan Andrews 3320 Woodrow Wilson Ave. • Jackson, MS 39209 601-948-6813 • www.calmainefoods.com
50 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 ______X ______Date Sign here for approval and fax to: 732-341-0981 Retail Eggs Year Volume (dozens) % change
Men’s Health and expanded its reach into Trip also became Discovery Education’s 2010 2,519,351,096 +.2 new health and lifestyle magazines like most popular field of all time. AEB Sports Illustrated, Dr. Oz and Health. At positioned itself as the EGGucation Expert 2011 2,548,720,997 +1.2 the end of 2014, more than 108 ads ran in by partnering with well-known educational 2012 2,518,516,858 -1.2 27 major food and lifestyle magazines experts to create Common Core-aligned lesson plans and materials. 2013 2,547,043,194 +1.1 TAKING BACK EASTER 2014 2,601,393, 721 +2* From hard-boiling to egg decorating FOODSERVICE to recipe ideas, AEB gave the season’s Efforts related to National Accounts, cherished hallmark an on-trend update. Incredible Breakfast Trends, Breakfast Eggs - Per Capita Consumption Beat newsletter, School Foodservice and Year Eggs per Person % change AEB encouraged consumers to purchase an Foodservice Distributors promoted eggs extra dozen eggs this Easter—one for eating within this channel. Eggs remain an 2010 247.9 +.1 and one for hard-boiling and decorating. important component of away-from-home 2011 250 +.8 This strategy was leveraged by creating breakfast. AEB’s School Foodservice and implementing a fully integrated program grew throughout the year. The 2012 254.3 +1.7 marketing campaign through advertising, new recipes and supporting materials for 2013 255.2 +.4 shopper marketing and traditional and EggPops reached 85 percent of the top 500 social media. school districts in the United States. 2014 260.7 +2.2
AEB continued its tradition of supporting EXPORT hard to continue building on this upward the 136th White House Easter Egg Roll USAPEEC leveraged AEB’s funding momentum in 2015. by donating more than 14,000 hard-boiled to promote the Incredible Edible Egg and dyed eggs along with volunteers’ internationally. AEB’s materials were If you would like more information on hats and aprons featuring the official translated into different language AEB programs or recent results, please White House Easter Egg Roll logo. On including Spanish, Arabic and others. As do not hesitate to contact me by phone, the South Lawn, AEB’s whimsical Hen a result of 40 trade visits in Mexico, an 847.296.7043, or by email, [email protected] to Home Experience engaged the day’s additional 12 companies are importing 30,000 attendees. into the country.
EGG PRODUCT MARKETING RETAIL A new campaign featuring the tagline One approach is through major “REAL Eggs make a REAL difference” partnership promotions with debuted, showcasing the functional complementary brands. These promotions attributes of REAL egg ingredients. feature a consumer offer to incentivize Advertising also reminded product incremental egg purchases. These formulators that REAL eggs have always partnerships help extend the reach and been a simple ingredient, in terms of impact of AEB’s promotional efforts, while both usage and their appearance on also sharing the costs. ingredient statements. These are only a few of the eggciting new Serving the Food Industry EGG NUTRITION CENTER initiatives from 2014 that contributed to for Four Generations with Work by researchers conducting the egg category’s overall growth. Eggs are High Quality Egg Products ENC-funded studies continued throughout now a $5.5 billion category, increasing 11 the year. ENC’s robust research pipeline percent by adding $550 million in dollar translated to a record number of published sales in 2014. That is pretty incredible! studies. Throughout the year, ENC reached health professionals, capitalizing I am confident that AEB’s robust on the protein trend at numerous programs are growing egg consumption. in-person events. This integrated program has allowed for increased efficiency that provides a GOOD EGG PROJECT seamless combination of a coordinated In partnership with NBC Universal, AEB message to each target audience. As the reached TV viewers in Boston, Atlanta, national marketing organization for 2 Papetti Plaza, Elizabeth, NJ 07206 Houston, Detroit, Seattle, Phoenix, Tampa America’s egg farmers, we are constantly Tel. (908) 351-0330 and Minneapolis-St. Paul with the results working toward fulfilling AEB’s Mission www.debelfoods.com of the 50-Year Environmental Footprint and Overall Objective to drive the demand Fax (908) 351-0334 Study. The third annual Virtual Farm Field for eggs and egg products. AEB is working Elliot P. Gibber, President
VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 51
X ______Sign here for approval and fax to: 732-341-0891
Dated ______Fresh fish featured online …
NYC’s famous fish market gets digital makeover via online sales portal New York City’s iconic Fulton Fish a virtual tour of the Market through Market has taken the classic live seafood the portal. market model to the web in a new online distribution venture that gives chefs across Metallo said chefs both in New York the country access to the Market’s unique City and in other regions have been seafood offerings featured daily. quite pleased with the online service as a convenient and reliable way to secure a Through FultonFishMarket.com, vendors greater variety of fresh seafood from one of at New York City’s longstanding fresh the most famous fish markets in the world. seafood market are now able to supply restaurants and other foodservice operators “What we’re able to offer is an assortment across the country with seafood items they outs of Fulton’s daily fish business. One and variety of fish from one location. bring to Fulton each morning. major point of reference was Robert We’re making it as easy as possible for “Bobby Tuna” DiGregorio, an expert tuna chefs to order from an online application “The [Fulton] Market has such a variety grader and veteran trader, well-known at or website,” Metallo said. “We don’t of fresh seafood from everywhere in the the Market. He was impressed with the disappoint when we deliver the product.” world,” said Cyndi Metallo, Vice President project, the ambition behind it and the for the website’s operating company, goals it sought to achieve for the near DiGregorio echoed Metallo as he too Meade Digital Enterprises, who had just 200-year-old co-op. was most excited with the prospect of the completed a delivery of Fulton’s fish to Fulton Market gaining the ability to supply a customer in Chicago. “We work with “I thought it was a great idea,” DiGregorio chefs across the country with a wide variety the vendors who have been there for said. “The fish market can only reach of fish. He said the service’s first customers generations and it’s an opportunity for a so many customers, online it can reach were thrilled with getting fresh fish one stop shop for restaurants.” the whole country, the whole world species not commonly available outside of theoretically.” the coasts. The origins of the Fulton Market’s centralized online portal was the idea With DiGregorio’s help, among others, “They love the service, they love the fact of founder Jody Meade, who started out Meade rallied most of the Market’s vendors they are getting fish they have never had securing fresh oysters for restaurants across and assembled a team to build the online before. It just opens up so many doors, New York City four years ago. Some early sales portal. By last spring, chefs and not just for the Fish Market but for the success led Meade to the Fulton Market’s restaurants up and down the East Coast consumer,” he said. “If you’re living in a vendors for more product. It was here he and in the Midwest had access to Fulton’s small town or some other place landlocked, realized the Cooperative was in need of an fish through Meade’s service. The company if you want swordfish, tuna… whatever it online distribution channel. employs a variety of ways to ship seafood may be, we’re going to give it to you.”UB from air freight to ground shipping, with Meade formed relationships among the a goal to provide customers with same Article contributed by Michael Ramsingh Market’s key players to learn the ins and day delivery. Chefs are also able to take [email protected]
52 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 LARGEST, FRESHEST SEAFOOD SELECTION
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[email protected] • 224-627-4191 • FultonFishMarket.com VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 53 Protocol and procedure … Zone management
Article contributed by careless practices of a few Global Aquaculture Alliance by establishing zone- based management. As with the pandemic of white spot syndrome that hit the global shrimp- Zone management also farming industry during the 1990s, the offers a vehicle by which more current outbreak of early mortality to move small- syndrome (EMS) is leading to the scale farmers conclusion that more comprehensive closer to third- health management controls are party certification, needed throughout the aquaculture which would Peter Marshall presenting at GOAL 2014. production chain. help attract investment and disseminate information to educate a particular regional management structures. It will Although global shrimp production region on the advantages of responsible also examine the rights and responsibilities is rebounding thanks to improved aquaculture practices. of users within a zone, and address diagnostics, breeding and practices at the assignment of restrictive controls. the farm, hatchery and feed production ZONE MANAGEMENT AND BAP Costs and benefits of zone management levels, overall shrimp production will The lessons learned from dealing with certification are also part of the equation. not continue to grow without additional EMS will be incorporated into new comprehensive disease management zone management standards now under Multifaceted assessments must investigate protocols. In particular, rising evidence development within the Best Aquaculture risks associated with disease transmission is pointing to the need to protect the Practices (BAP) certification program that and response, harvesting and processing majority of farms within a region from the could potentially result in a fifth BAP methods, fallowing and rotation. The list “star” designation. of interrelated factors is long.
In agreeing to support the zone IMPLEMENTATION management standards in its October 2014 Preliminary concepts for implementation meeting, the BAP Standards Oversight of BAP’s zone standards see several Committee said that factors such as trans- facilities applying as a working group. boundary movement of animals, proximity They would supply pertinent production Family owned since 1962 of farms and waste discharges—which by data and collectively define targets and The Oldest Independent Importer nature affect multiple aquaculture facilities measurable milestones that can be reviewed Sustainable Mexican Shrimp in a region—are potentially far-reaching through independent assessments to verify issues that require input and collaboration the central plan is progressing on target. from many levels. Individual site audits carried out against COMPLEX COLLABORATION the group plan would review records and In a December 2014 meeting, BAP Zone confirm the group’s agreed guidelines Management Committee Chairman Peter are in proper practice. Participating Marshall defined zone management: facilities could pool resources for the “A key collaboration mechanism where initial application and review, with aquaculture service/product providers, assessment fees for the farm audits paid by regulators and farmers can come together individual facilities. to work within a joint industry/science/ government working group and establish Collectively, zone management involves a successful platform that will deliver the numerous processes and protocols working controls and changes required to protect simultaneously. The lessons learned ra from disease within the zone.” from diseases and a realization of what leb tin e g needs to be done emphasizes that more C 53 As the zone committee drafts its comprehensive management controls Years certification standards, it will consider are necessary. Thanks to improvement, 323.849.6679 • 818.846.5222 such elements as facility size and certifications and further education, the www.deepseashrimp.com configuration, hydrographical conditions, industry can implement standards and [email protected] species-specific culture practices and establish a successful platform.UB 101 South First Street • Burbank, CA 91502 54 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 New potential in our neighbor across the Caribbean … Cuban thaw heats up U.S. grain market
December 17, 2014 saw President Obama In 2013, Cuba imported $350 million area is the snarl of red tape associated with announcing a new trade agreement with worth of U.S. food. Their main import property seized in the 1959 revolution. Cuba. The overhaul greatly streamlines was frozen chicken, amounting to Cuba-U.S. trade by cutting out more than $140 million. With The White House is currently working to several middle steps. Before the the new regulations in place, further expand trade and improve relations reform, trade required a cash- we could see a possible $4.3 with Cuba. While the President expects up-front payment from Cuba billion in exports to Cuba to face opposition from Congress on the through a third nation’s in 2015. While a sizable topic, additional efforts are being made to bank before a ship could portion of this will be remove trade restrictions with Cuba. leave a U.S. harbor. Now, staple products like Developments on that front payment can occur in transit wheat, rice and salt, are anticipated to continue and without a middleman. we will also most slowly in the coming months. This allows for the U.S. to offer likely see some growth Long-term goals include the competitive pricing on many commodities, in the beef and pork markets removal of import restrictions among them wheat and rice. The U.S. there as well. These products from Cuba, development currently holds a zero percent market share are currently closely rationed of tourism and travel to and in the Cuban wheat market. Due to the by the Cuban government, from Cuba, and eventually total now-convenient export laws that number so major changes are unlikely removal of the embargo between could jump as high as 90 percent. Cuba to occur without both political and the U.S. and Cuba. The White is expected to import around 10 percent economic reform. Other markets where House hopes to achieve these goals before of U.S. hard red winter wheat. Another U.S. businesses may have expansion President Obama leaves office in 2017.UB product where we will likely see growth is opportunities include construction and rice, a product in which we were formerly automotive exports, as well as real estate. Article contributed by Jake Muldowney outcompeted by Brazil and Vietnam. Obstacles facing U.S. investors in the latter [email protected] ©iStockphoto.com/Fourleaflover
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VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 55 What’s new with seafood in 2015 … Slew of seafood products set to “With consumer awareness firmly focused on sustainable practices, we wanted to provide packaging options that mirror our “THE EXPO IS THE LARGEST SEAFOOD Common Sense Sourcing philosophy of TRADE SHOW IN NORTH AMERICA …” doing business,” said Roger Fickenscher, Director of Product Development.
The five ounce portions will be available In what has morphed into an industry The Georgia-based distributor will feature in a variety of dry rubs and spices at Orca pilgrimage of sorts, thousands of seafood the foodservice line’s Jambalaya Fritters at Bay’s booth #643 professionals from around the world its Booth #505. King & Prince’s fritters descend on the Boston Convention and take the classic Cajun dish made up of Beaver Street Fisheries’ Exposition Center each year in mid-March shrimp, rice, Andouille, vegetables and Sea Best Signature Singles for the Seafood Expo North America. spices and fries them up in their own Tavern Battered coating. Retail Line The Expo is the largest seafood trade show Beaver Street Fisheries will feature in the Western Hemisphere and among “With Small Plate menus spiking over Signature Singles as the latest addition to the best chances for buyers and sellers from 300% since 2012, we are pleased to offer its popular Sea Best Signature retail line across the industry to meet and discuss operators the addition of our new Small of microwavable seafood products at its business opportunities for new products Plates/Bar Bites™ product line,” said L.B. booth #1133. and services available over the next year. Watkins, Category Manager at K&P. Expanding on the company’s original Sea Ahead of the 2015 Expo, Urner Barry’s Orca Bay’s Eco-Friendly Best Signature brand of products, the line Reporter canvassed some companies and Vacuum Packed Chum already offers customers microwavable asked them about their new products, entree choices including citrus scallops services and campaigns they plan to feature Salmon and Cod Portions and linguini, stuffed clams, black bean during the show. and shrimp tacos, tilapia Florentine and all natural dryyub KETA SALMON FILLETS spinach and artichoke flounder. 5 ounce, skin-on fillets paired with chef-inspired seasoning blends Here are the findings of just a few of the more innovative seafood products and maple bourbon “We look forward to showcasing these A rustic, handmade vibe is captured by this enticing rub that combines the carmelized sweetness of Vermont maple with a hint of barrel-aged services set to make their debut on the bourbon whiskey. new gourmet on-the-go items at the 2015 show floor when the Expo kicks off on Seafood Expo, as we simultaneously March 15, 2015: mediterranean prepare for these products to roll out herb A sun-drenched blend of oregano, thyme, garlic & peppers brings a vibrant Mediterannean flair to our all-natural Keta fillet. to retailers in spring 2015.” said Mark King & Prince Seafood’s An earthy, rich & sweet bouquet of classic herbs. Frisch, executive vice president of Beaver Jambalaya Fritters Street Fisheries. smokey barbecue The rich smoky flavor of a chip-fired grill smolders through in this savory rubbed salmon. Slightly sweet & gently salted, this is a blend that’s tasty & traditional. National Fish & Seafood’s Expanded Matlaw’s Lineup lemon thyme The citrusy, flowery fragrance of thyme & the tang of lemon propel the zesty appeal of this delightful rubbed fillet. A lively & aromatic bleand that perfectly pairs with the healthy qualities of salmon.
lemon pepper dill The unique herbal nuances of dill unite with refreshing lemon & a perfect hint of peppery heat. A traditional blend that’s endured for generations - why? It’s simply delicious.
Seattle’s Orca Bay Seafoods will have a retail line of Keta salmon and Pacific cod portions available in a new vacuum pack. King & Prince Seafood Corp—last year’s The company said it is able to directly winner of the 2014 Expo’s Best New print its logo and all other product Retail Product competition—will return to information on the portions using the Boston this year with the addition of Small revamped packaging. This allows Orca Bay Fresh off a Matlaw’s rebranding campaign Plates/Bar Bites to its Mrs. Friday’s line to eliminate an extra layer of plastic and during last year’s Expo, Gloucester-based of products. reduce its carbon footprint. National Fish & Seafood will expand the
56 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 Slew of seafood products set to debut during 2015 Boston expo popular retail and foodservice brand’s offerings during this year’s show.
At National’s Booth #305 the company will roll out two shrimp offerings: a Buffalo Popcorn variety and Southern Country Fried item. National said the Buffalo style shrimp was inspired by the explosion in popularity of more spicy offerings on menus nationwide. The item will be available at retail freezer aisles in an 8 oz. carton. The company’s Southern style shrimp will be available in 9 oz. cartons in National’s unique blend of spices that capture the unique flavor for seafood fried Southern-style. The company will also debut a Seafood Paella which will feature salmon, mussels, rice and mixed veggies tossed in seasonings. The item will be sold in a 14 oz. bag. Urner Barry’s Revamped Foreign Trade Data Service Not to be left out, Urner Barry has been improving its Foreign Trade Data Service. The remodeled tool—crucial for delivering seafood importers and buyers key import data and statistics in just a few clicks—will feature a cleaner look, easier access to Census Data Import Reports and more frequently updated data straight from the United States Census Department.
Access to this rich database also gives customers daily, customizable updates to pertinent FDA Import Alerts and Refusals; Warning Letters and Constituent Updates. Users also gain access to expert commentary provided by attorneys from the law firms of Akin, Gump, Strauss, Hauer and Feld and Trade Pacific PLLC.
Attendees are invited to get an exclusive free Demo of the revamped Foreign Trade Data Service with one of our expert staff members during the show at Urner Barry’s Booth #364.UB
Article contributed by Michael Ramsingh [email protected]
VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 57 Urner Barry visits Spain and India … UB’s market intelligence crosses the pond
CONXEMAR FAO. This top-notch event gathered 375 Throughout the fall of 2014, Urner Barry professionals from 24 different countries. had the incredible opportunity to be High profile government representatives invited to several shows across the world from around the world convened for the as an expert presenter of seafood market show. Leena Nair, President of Marine trends. From CONXEMAR in Vigo, Products Export Development Authority Spain, which saw more than 26,000 people (MPEDA) from India, Nestor Bustamante, gather in 2014 to Mexico’s International Fisheries Undersecretary for Argentina, Audience, comprised of Government officials, Aquaculture Forum and India Tilapia Raul Sunico, Fisheries Undersecretary Spanish Processors and Importers, Industry experts, among others, actively engaged in the Summit, Urner Barry’s market analyst of Chile, Tran Dinh Luan, Aquaculture Congress’ presentations. Angel Rubio, had the pleasure to be Director of Vietnam and Andres Hermida, invited and speak to a wide range of General Director of Fisheries of Spain were CONXEMAR expo took place. This audiences in the seafood industry. all in attendance, among others. convention proves to be quite an event as more than 26,000 people from 94 different On October 6, 2014, CONXEMAR, the Sustainability, market trends, countries gather; and 514 exhibitors from trade association consumption, 40 different countries. representing environmental seafood importers, impact as well as This year, Vigo will be hosting the 20th processors and other important anniversary of the Code of Conduct producers, topics were all for Responsible Fisheries during organized the 3rd discussed and the International Forum of Fishing World Shrimp presented by Stakeholders. The event will intend Congress co- Opening Ceremony Presentations by FAO and experts. After to bring representatives from 150 organized with Spanish Government Officials. the congress, different countries. NEW AND UPDATED OFFERINGS FROM The Meat Buyer’s Guide® 8th Edition • Updated NAMI Posters • The Beef Book
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Visit shop.meatbuyersguide.com or call 800-932-0617 58 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 INTERNATIONAL The event “India Tilapia Summit” AQUACULTURE FORUM organized by the Rajiv Gandhi Centre On November 5, 2014, the 9th for Aquaculture (RGCA) and MPEDA, International Aquaculture Forum took brought experts from all over the world place in Guadalajara, Mexico. This together with the intent of promoting event, organized by tilapia production Panorama Acuicola and its potential in Magazine with the India. support of Latin America’s World MPEDA’s Aquaculture Society, Chairperson, Leena brought more than Nair, said seafood 1,000 people into exports from its conference with the country had 77 speakers from different parts of the crossed $5 billion USD in 2013-14, but world. The event simultaneously took place approximately 50% of those sales were during the magazine’s 20th anniversary. for shrimp. “There is a vast market for freshwater fish and tilapia has the potential Many technical topics from as a major fish variety for aquaculture experts all over exports,” she said. the world, from biologists to production technicians, Urner Barry’s market analyst were presented. Urner Barry’s Angel Rubio presented on market analyst Angel Rubio the U.S. market for tilapia, had the chance to speak which has become one of the about the shrimp market most consumed species in the in the U.S. and how it has country ranking in the top changed dramatically over the ten most consumed seafoods past few years, especially after over the last few years. global shrimp shortages due to EMS in Asia and Mexico. Given the success India has had with shrimp production, The next event will take place many believe tilapia production again in Guadalajara, Mexico in is more than a possibility in the November 2015. country. Jaideep Kumar, project manager for RGCA believes there is huge potential INDIA TILAPIA SUMMIT to grow.UB On December 18, 2014, Urner Barry had the honor to be invited for the first time Article contributed by Angel Rubio to India, in the Andhra Pradesh province. [email protected]
Angel Rubio presenting at the India Tilapia Summit about the U.S. tilapia market. VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 59 Seafood execs hit “The Strip” … NFI’s Global Seafood Market Conference grows
In late January 2015, 450 of some of the most influential major market trends. executives in the seafood industry gathered in Las Vegas for Sessions include the National Fisheries Institute’s 2015 Global Seafood Market market discussions Conference (GSMC). Attendance was up for the fourth focused on shrimp, straight year since the convention’s inception, as more industry salmon aquaculture professionals are and shellfish, finding value in the among others. market insights featured during the event. Panels featured expert market Urner Barry’s Chief Market Analyst, Angel Rubio, served as alongside Panel Leader This year’s Conference discussions among Darren Zobrist of Anova Seafood during was held at the Four top buyers, sellers, the Tuna, Mahi, Grouper, Snapper and Seasons Hotel at the importers, producers Swordfish Panel. Mandalay Bay Hotel and distributors. and Resort just off Audience participation was also encouraged with open question the Vegas Strip. The and answer periods at the end of each session. SeaWatch’s Wally Stevens discussed the event features a series sustainability of the U.S. Quahog fishery of breakout panels that Attendees also heard a number of financial and food industry during the Value Shellfish breakout. analyze the prior year’s professionals outside of seafood discuss major trends they believed
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60 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 had implications for the industry at-large. Record “Judson is an industry thought-leader, pushing high beef prices, the strength of the U.S. Dollar the community to transform nutrition messaging and shifting seafood consumption patterns were about seafood into marketing and challenging us just some of the topics addressed. all to ensure quality products,” said NFI President John Connelly. “We’re excited to have Judson as “The information and insights that come out chairman and to see the impact of his leadership at of GSMC have made it a must-attend event for a crucial time for seafood.” seafood executives,” said the NFI’s Senior Vice President Judy Dashiell. Once again, NFI continued to grow its Bryan Hunt of Wells membership and the impact of its voice with Attendance seems to grow every year, and in just Fargo offered a unique regulators and on Capitol Hill. With members all financial insight into the four years the GSMC is now one of the most seafood markets during along the seafood supply chain, NFI has a broad sought-after conferences in the seafood industry. the Conference’s Keynote and complex issue portfolio. Individual councils Plenary Session. within NFI’s broader membership also grew, such “The 2015 conference saw an attendance increase as the Crab Council’s sustainability efforts in Asia of 80% since the inaugural GSMC just three years ago,” Dashiell and the Shrimp Council’s marketing work on social media. said. “We believe that GSMC prepares companies for the meetings they will have in March at Seafood Expo North America and While growth in numbers is positive for NFI, Dashiell emphasized Seafood Processing North America.” it’s the makeup of the membership that truly shines.
GSMC also offers the NFI a unique venue to review the strength “While NFI membership continues to grow year after year, it’s the of the organization and work through old and new business items quality of members that make the association what it is,” Dashiell on the Institute’s agenda. said. “Our members differentiate themselves with their pledge to fight fraud, efforts on sustainability, and commitment to Per conference tradition, the newly elected NFI Chairman takes free trade.”UB over the gavel. This year Judson Reis, CEO of Gorton’s Seafood took the helm. Article contributed by Michael Ramsingh | [email protected]
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VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 61
X ______Sign here for approval and fax to: 732-341-0891 Dated ______Buon appetito! Urner Barry’s 1st annual Sunday gravy challenge
Your dedicated Urner Barry team celebrated the must be composed of tomatoes simmered in the pan, First Annual Sunday Gravy Challenge on Monday drippings of some type of meat, for example, beef, January 12, 2015. The company’s ever-innovative Vice braciole, pancetta, pork, sausage, turkey or veal. President, Joe Muldowney, cooked up the Challenge The one exception to the homemade rule was that to heat up the typically frigid spirits of early January. participants did not have to grind and case their own To judge the entries, Muldowney invited three sausage; it could be bought from a butcher or salumeria. industry leaders: Paul Brogowski, the Godfather of the Finally, each participant had to make a large enough New York-New Jersey Meat Business; Rob Nicolosi, amount of gravy to feed the entire staff after the contest. president of the third-generation, family-owned Nicolosi Fine Foods, and Russ Strich, long time field The three wise judges rated our gravies on a scale of sales consultant for Tyson Fresh Meats. one to five — five being the highest — in four categories: Sauce Texture, Sauce Flavor, Meat Flavor, and Overall Muldowney invited all Urner Barry employees Impression. A tie would be broken by judging Presentation to participate in the Gravy Challenge. Though on the same one to five scale. Kelly Mangold won the many were called, only a few felt they had the desire and hearts, mouths, and stomachs of the judges with sauce rich necessary skills to compete. The challengers included with meatballs, sausage and short ribs (recipes follow). She founder, Joe Muldowney, as well as Nicole Bessemer, Jamie took home the first prize trophy for the best Sunday Gravy. Chadwick, Kelly Mangold, Gary Morrison, and me, your The two Jamies, Chadwick and Patterson, remarkably tied, humble author, Jamie Patterson. both showing off their gravies with meatballs. As one might expect, my impeccable presentation won out. Competitors were required to adhere to a few simple rules. Gravies could not be prepared in the Urner Barry test I asked New Jersey native Kelly Mangold to share her kitchen; all entries had to be completely homemade- secret to her winning gravy. She grew up with cooking --this assumed the utmost honesty and ethics by the in her blood. “I was always surrounded by women participants, because no purchased or jarred sauces cooking. One grandmother was from Italy. The other could be used in the gravy. I suspect Muldowney was from Russia. I had the best of both worlds. There didn’t want any apron-wearing grandmothers or wine-drunk uncles was no going out to eat, my mother and grandmothers always hanging around the office all day taking turns stirring our sauces. cooked…even lunch.” Mangold enjoys looking at cookbooks, As Italian-American tradition loosely demands, the Sunday sugo, reading recipes, and religiously watches cooking shows for tips. She
Judges Paul Brogowski, Rob Nicolosi, and Russ Strich with Urner Barry’s Terence Wells.
62 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 Judges of Urner Barry’s First Annual Sunday Gravy Challenge applaud the participants. From left to right: Gary Morrison, Jamie Patterson, Jamie Chadwick, Kelly Mangold, Joe Muldowney and Nicole Bessemer. frequently adapts recipes to suit her own tastes, but she keeps to tradition and the recipes with which she grew up. “My recipe for my sauce or gravy is how my mother and her mother cooked it. So that’s “KELLY MANGOLD WON where I got the recipe. I was very surprised I won because I cook what I like and not everyone has the same tastes. Not to mention, I really don’t have exact measurements or printed recipes from a book.” THE HEARTS, MOUTHS, AND STOMACHS OF THE JUDGES All in all, the challenge was quite successful. Participants, judges, and employees, the most discerning of the lot, enjoyed many laughs and plenty of delicious home cooking on a traditionally mundane WITH SAUCE RICH WITH post-holiday Monday afternoon.UB MEATBALLS, SAUSAGE AND Article contributed by Jamie Patterson | [email protected] SHORT RIBS.” Photographs by MaryAnn Zicarelli | [email protected]
GRANDMA JULIA’S SUNDAY DINNER RECIPES SAUCE MEATS 3-5 TB Olive Oil 2 Whole Cloves of Garlic 4-5 Cloves Garlic Chopped 4-5 TB Olive Oil 4 28 oz Cans Whole Plum Tomatoes 1 LB Italian Sausage (Sweet or Hot—your preference) 1 Can Tomato Paste 2 LBs Country Style Pork Short Ribs or Pork Necks 1 tsp Garlic Powder 3 LBs Ground Beef 1 tsp Onion Powder 1 C Bread Crumbs ½ tsp Dried Oregano (or more to taste) 2 Eggs Slightly Beaten ½ C Dried Parsley or Fresh Italian Parsley ½ C Milk 1/8 tsp Crushed Red Pepper 1 Clove Grated Garlic Salt & Pepper to taste ¼ C Grated Parmesan 1 Whole Onion Peeled ½ tsp Oregano 1 tsp Onion Powder 1. Working with one can of tomatoes at a time, pour contents 1 tsp Garlic Powder into a sieve that has been placed over a bowl and remove Salt & Pepper stems and what seeds you can and then place tomatoes and juices in a blender or food processor. Pulse until you achieve 1. In a large bowl mix together all the ingredients for the your desired consistency, this is a matter of taste—some meatballs adding more milk if mixture seems too dry. Form prefer their sauce chunkier. Repeat with remaining cans and into balls (size — your preference) then set aside while you set aside. cook the sausage and ribs. 2. Heat the oil in a large pot over medium-high heat and add 2. Heat olive oil in a large skillet over medium-low heat and then garlic, stirring until soft and fragrant, about 2 or 3 minutes. add garlic and sauté for about 2 minutes. Add processed tomatoes, bring to a boil, then add tomato paste. 3. Add sausage and brown on both sides, 8-10 minutes, then remove to paper towels to drain and then add to sauce. 3. Turn down heat to a simmer and add the dried spices and herbs along with whole onion and let simmer for several 4. Add short ribs or necks and brown on all sides, 8-10 minutes, hours, stirring occasionally. then remove to paper towels to drain and then add to sauce. 4. After about an hour taste, check for acidity and add a little 5. Add meatballs and brown on all sides, 8-10 minutes and then sugar if needed. shimmy in the pan to coat with juices. Add to sauce. 6. Sauce and meat will be ready to eat after about 2 hours but can simmer on the stove for up to 4 hours. ©iStockphoto.com/Retrovizor
VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 63 Mexican beef solidifying its position in the U.S. …
Mexican Beef Exports rebound in 2014 The Mexican beef market continued to This situation caused prices for feeder $3.35/lb or 107.6 Mexican Pesos per kg. see several adjustments over the past few cattle, for both the export and domestic Exports for that month were the highest on years. The trends continue to be similar; market, to rise significantly (chart 1). record when compared to previous years, imports have decreased, while exports and further supported by a favorable exchange domestic production increased. Although Due to the lower supplies of cattle, and rate since the peso depreciated more than Mexican domestic packers continue their therefore meat, the U.S. market saw prices 6 percent in December from the previous efforts into gaining market share all over of beef rise to record levels and thus month, from an average of 13.6 pesos per the world, exports to one of the strictest became an even more attractive market U.S. dollar to 14.6. markets in the world, the U.S., continued for Mexican beef. Both volumes and to increase in 2014. values of Mexican beef exports to the U.S. However, it is important to understand managed to increase significantly. Finally, that cattle prices advanced even faster than It made very good economic sense to a strong U.S. dollar also helped Mexican meat prices; in other words, the price of send beef into the U.S. in 2014 since beef producers look to the U.S. market as beef has not kept pace with cattle prices the dynamics of their market changed exports became more attractive. (Chart 3). Since there is no data for fed dramatically. Cattle scarcity in the U.S. cattle prices in Mexico, we used feeder prompted heavy buying of Mexican cattle December 2014 marked the highest price cattle prices to illustrate this argument. by U.S. feeders, even though availability in per kilogram ever recorded for Mexican As such, we used a feeder cattle ratio to Mexico was tighter than in previous years. beef exports, reaching an average of cutout and clearly saw how cattle prices
%Chg in Prices of Feeder Cattle 1 Mexican Beef Exports 2 Mexico and U.S. Importsof Mexican Feeder Cattle Exports of Beef $MXN/Kg. 80% 15 125
60% 110 13 T $ M
M
40% d 95 X n N a
s 10 / u k o 20% 80 g h T 8 0% 65
-20% 5 50 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Source: AMEG, USDA, Urner Barry Feeder Cattle Mex Imp. Mex Feeder 2&3 400-500 lbs Source: AMEG, Urner Barry
Other Russia Cattle/CutoutRatio 3 Total Mexican Beef Exports by Destination 4 Hong Kong Japan Source: AMEG Source: AMEG, Urner Barry U.S.A. 0.75 160 3.7 2.7 140 0.71 26.9 4.1 14 120 6.7 25 20 0.67 100 26.0 80 0.63 3.6 20 Thousand MT Thousand 60 4.2 119.4 3.2 17 94.2 97.8 0.59 40 13 59.3 20 38.7 0.55 23.1 1 5 10 15 20 25 30 35 40 45 50 2 5 10 15 20 25 30 35 40 45 50 1 4 - 2009 2010 2011 2012 2013 2014 2013 2014 '15
www.mexicanbeef.org
64 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 advanced at faster pace than meat starting inputs (cattle) the U.S. market becomes approximately around the second quarter quite attractive as a result; due in part to of the year. a favorable exchange rate and the high “… IT IS IMPORTANT TO prices being paid for beef in this market. Mexico exported a total of 143.6 thousand So, in 2014 and at least for the foreseeable UNDERSTAND THAT metric tons of beef, which represented future, the U.S. remains the most attractive CATTLE PRICES ADVANCED an increase of more than 21 thousand market to sell beef from the perspective of metric tons from 122.51, or 17 percent Mexican exporters.UB EVEN FASTER THAN when compared to 2013. Although this MEAT PRICES;” is impressive, exports were short of the Article contributed by Angel Rubio 149 thousand metric tons exported in [email protected] 2012. Still, it is an impressive recovery from a year in which Russia, a market that counted for approximately 20 percent of total exports, completely shut down imports of beef.
Two destinations came to the rescue: the U.S. dominated Mexican beef shipments, accounting for nearly 83 percent of the market share and totaling 108.7 thousand metric tons. Japan, a distant second, took 13.8 thousand metric tons, accounting for 9.6 percent of the market share. These two markets combined accounted for more than 90 percent of the market share even though shipments to Japan decreased by 34 percent compared to 2013. In a very distant third, Hong Kong picked up 5.4 percent of the mexicanbeef.org market share or 7.7 thousand metric tons.
In conclusion, the Mexican beef industry has seen the U.S. as a very attractive parallel market to the Mexican domestic market. That is, when beef prices have not kept pace with the price of mexicanbeef.org
www.mexicanbeef.org
VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 65 Shrimp imports Continued from page 1 “... INDIA WAS THE TOP U.S. SUPPLIER WITH ITS Producers in Ecuador, India, Indonesia IMPORTS 15 PERCENT HIGHER COMPARED TO 2013.” and Vietnam—countries that actually began cranking up their output in 2013— rounded out the top four as each supplier The overall increase in global shrimp churned out record levels of white shrimp posted double digit increases for the year. production along with a stronger U.S. shipments in 2014. By the end of 2014, dollar led to a big rise in U.S. shrimp India was the top U.S. supplier with its Even Thai production late in the fourth supplies and lower market prices imports 15 percent higher compared to quarter exceeded year over year totals for (Chart 4). 2013. Indonesia, Ecuador and Vietnam the first time in several years. The December 2014 Urner Barry White Shrimp Index fell to around $5.00 per pound. In January2015, the Index dipped even further—the first time in 18 months that pricing had fallen under $5.00 per pound (Chart 3).
Bottom line is, the U.S. shrimp market in 2014 saw the return of overseas production after years of disease-induced decline. Imports surged to the third highest volume ever, comparable to 2006 and 2011. By the end of 2014 and early into 2015 these increased volumes pushed wholesale spot prices lower.UB
Article contributed by Michael Ramsingh [email protected]
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MARYLANd OFFICE Billy Savage Ginger Trader Fred Cline Jeff Vivalo Phone: 866-2SAVAGE Fax: 410-543-8919 Reaching above and beyond youR expectations in ALABAMA OFFICE cold stoRage waRehousing and constRuction Lewis Wood • Design/build construction Chris Fly ® • Blast freezing with Interstate Warehousing’s QFR Zone system Phone: 866-3SAVAGE • Cold storage warehousing & distribution Fax: 251-970-5273 • Specializing in construction of multi-temp food distribution and manufacturing facilities TENNESSEE OFFICE • Customized distribution solutions at Interstate Warehousing dan Henderson • Industry leader in warehouse automation assessment and integration Phone: 800-869-3854 • Owner/Operators of more than 82 million cubic feet of frozen & refrigerated Fax: 901-756-2510 warehouse space NEW JERSEY OFFICE Henry Montana @TippmannGroup Phone: 908-420-4050 (260) 490-3000 www.savagepoultry.com 9009 Coldwater Road • Fort Wayne, Indiana 46825 • www.tippmanngroup.com
66 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015
X ______Sign here for approval and fax to: 732-341-0891
Dated ______'10-'13 avg. 2012 1 2 U.S. Shrimp Imports All Types By Year & Avg. Import $/lb. Thailand Cyclical Shrimp Imports 2013 2014 1,350 $5.35 6 40 $4.74 1,300 $4.07 5 $3.29 $3.79 1,250 $3.48 30
$3.18 I 4 m
$3.12 $3.16 $3.11 p o
1,200 r t
$
3 / 20 l b
1,150 . Million lbs. MIllion lbs. 2 1,100 10
6 1 8 4 9 1 8 6 9 9 1 1,050 6 0 2 4 0 3 6 7 1 4 1 3 2 2 2 2 2 1 1 2 , , , , , , , , , , 1 1 1 1 1 1 1 1 1 1 1,000 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: USDOC. Urner Barry Source: USDOC. Urner Barry
Indo/Rup Vietn/Dong Urner Barry HSLO White Shrimp Index 3 % Chg of Foreign Exchange Rates Mex Peso China Yuan 4 Jan'14 = 0% Source: NY Fed, Urner Barry Euro India Rupee Source: Urner Barry Thai Baht Dollar Index 6.5 15% Dollar Index, 10.8% 6.0 10%
5.5 5% Thai Baht, 0.24% $
/ Vietn/Dong,- 1.3% l 5.0 b . 0% $4.81 India Rupee-,1 .68% 4.5 Indo/Rup,- 1.8% -5% China Yuan,- 2.78% 4.0 -10% Euro,- 10.4% Mex Peso-, 10.67% 3.5 -15% Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Devi_Seafooods_Advt_New.ai 1 16/05/14 2:03 PM Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15
SHRIMP SUPPLY SOLUTIONS
C FROM M THE SOURCE Y
CM
MY
CY
CMY
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14800 St.Mary’s Ln. Houston, TX 77079 [email protected] | www.deviseafoods.com
VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 67 Forecasting solutions for the meat and poultry industry … Obsono enters its 15th year of service
An epic time for the business and feats can compare to the announcement “This agreement represents each technology industries, the turn of the by CattleFax and Urner Barry CEOs organization’s commitment to century marked the advent of the iPad to launch a joint venture, known only provide customers with the most by Apple, the introduction of Wikipedia as Obsono, a Latin word translated to impactful forecasting tools in the industry,” online, and the release of the first Harry “purchase something as a provision.” said Paul Brown Jr. at the time. This Potter movie. Within the meat and poultry statement still holds true heading into community, however, not Randy Blach and Paul Brown Jr. decided its 15th year. The fact that the report one of these to pursue this joint venture in early has stood the test of time and continues 2001 to provide concise information to be well received is a testament to and forecasts needed to formulate Obsono. The report has grown from the strategy and full risk analysis to original 17 items to now covering over 50 those with exposure to the red meat different ones. and poultry markets. The newly formed company combined the As with any great product, the Market knowledge and understanding Insight for the Meat and Poultry Industry of the spot meat markets by report continues to evolve and grow to Urner Barry, Urner Barry’s meet customer demand. Products like largest historical database, and this come along once in a lifetime so it CattleFax’s expertise in analysis will be interesting to see which of the and modeling. The combined iPad, Wikipedia, Harry Potter, or Obsono organization capitalized on the will outlive the others.UB strong reputation each had in their respective segments of Article contributed by Gary Morrison the industry. [email protected] MANNING Poultry Sales
Trading in All Turkey Products Both Domestic & Export Contact John, Mike, or Merri 910-875-6500 [email protected] P.O. Box 950, Raeford, NC 28376 68 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015
X ______Sign here for approval and fax to: 732-341-0891 Date Hens in 116 lay golden eggs … Egg prices soar as prop. 2 goes into effect
After years of speculation 2015 compliant eggs. In the regarding its implementation first two weeks of January, “…THE CALIFORNIA QUOTE EXCEEDING and resulting impact, wholesale large prices THE BENCHMARK MIDWEST FIGURE BY Proposition 2 has finally jumped to more than $3.00 MORE THAN $2.15 PER DOZEN.” gone into effect in the per dozen for the first time state of California. in history. Meanwhile, passed that point, but it was only a matter Fortunately for some, the rest of the country of time before prices nearing $3.50 a dozen and unfortunately for was just finding a had a similar effect on shopping patterns. others, the California settling point from Not only that, but more and more law is already having a record preholiday levels. compliant production was coming online pronounced impact across east of the Rockies. the country. Corrections east of the Rockies sent MW large prices Supply and demand conditions are yet The state’s 38 million plus to $1.17 per dozen, the lowest to fully iron themselves out at the time residents need more than 20 million level seen in over a year. Spreads of this report. Most feel recent prices will laying hens to service demand. Existing between the two quotations soared, temper demand and alleviate pressures on production deficits in the state caused with the California quote exceeding the the supply chain. Still, questions remain by high operating costs were rapidly benchmark Midwest figure by more than as to how long January highs will last, how accentuated by the deadline as producers $2.15 per dozen. much additional production is on the way, complied with the new cage standards of and what Easter will have in store for the 116 square inches per layer. According to The lows in the rest of the country finally California market.UB the USDA, California layers in flocks of prompted seasonal flock rotations and thirty thousand or more totaled 15.033 opportunity in California had a number of Article contributed by Brian Moscogiuri million to begin the month of December, players scrambling to comply with the new [email protected] ©iStockphoto.com/deftrender 2014, down 12.1% from December of 2013 production standards. and 18% from that month in 2008, the year Proposition 2 passed. It is also likely Large prices hit $3.42 per dozen and that these declines continued during the suppliers began to see the push back from last month of the year. foodservice chains, restaurants, and mom and pop stores. Meanwhile, retailers in Producers in the central areas of the California were slow to pass wholesale country began making adjustments to costs along to the consumer. Through take advantage of expected shortages as the middle of January, prices at the shelf well, but record high prices for the holiday ranged from roughly $2.50 to nearly $6.00 season tempered their motivation to adjust per dozen. flocks. California large dozens began the year at $2.26 per dozen, down from Just a month prior, holiday highs of $2.66 preholiday levels of $2.66. The quotation had stalled retail movement. Compliant began to rebound shortly thereafter as supply shortages and headline news buyers switched to sourcing predominantly coverage seemed to motivate market levels
UB Midwest vs. Southwest Large Spread UB Shell Eggs, White Lg, MW UB Shell Eggs, White Lg, California Source: Urner Barry Spread 4.00 2.50
3.50 2.00
3.00 $/dzn. 1.50
$/dzn. 2.50 1.00 2.00
1.50 0.50
1.00 0.00 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15
VOL. 10, NO. 2 / SPRING 2015 / URNER BARRY’S REPORTER • 69 X ______Sign here for approval and fax to: 732-341-0891
Date ______Someone tiny, someone sweet, we would like for you to meet … Urner Barry baby boom Introducing the Urner Barry babies! There’s been a baby boom for Introducing Lucy Rose the Urner Barry family as several of the staff have welcomed new Bailey! Born on January 9, little ones to their lives recently, and we would like to welcome 2015, she weighed 7 pounds, them here. 1 ounce and measured 21 inches long. Mom Sandra, Urner Barry’s Comtell Operations her Dad Joe and big brother Manager, Christin Chase and Joseph are thrilled! Little husband Jeff welcomed Nolan Lucy was born to two Jonathan Chase on April 4, 2014. relatives who work at Urner Nolan weighed 7 pounds, 3 ounces Barry, her loving Mom and was 20 ½ inches long. He is Sandra is a Credit and already up and about and pictured Collections Associate and here with big sister Isabella. her Uncle Jay is an Account Manager in Urner Barry’s Weighing in at 6 pounds, 4 ounces printing department. on December 3, 2014, Charles Joseph Bober was welcomed to Although nearly two years the Urner Barry family when his old now, we couldn’t pass mother, UB Graphic Designer up introducing the UB Caroline and father Mark were Reporter family to Lucija pleased to share their joy. Grace Morrison. Gary Morrison, Boxed Beef and Grace Lynn Schreiber was born Beef Variety Reporter, his January 9, 2015. Ten days late, but wife Melissa and big sister proud parents, UB’s Advertising Nicole were surprised Director Janice and husband Mark, when this little cutie was couldn’t have been happier. At 7 born four weeks early—at pounds, 12 ounces, the 20 inch 36 weeks—on May 2, 2013. long bundle is the first grandchild She weighed 5 pounds, 13 for Urner Barry President Paul ounces and was 20 inches Brown, Jr and his wife Marilyn— long! Lucija’s spelling of and the first great grandchild for her name comes from her ‘Grandma Brown.’ Croatian heritage.UB Advertiser Index ...
Atlantic Coast Freezers...... 9 FultonFishMarket.com...... 53 Northern Beef Industries...... 5 Bird-In-Hand...... 60 G & C Foods...... 68 NuCal Foods...... 71 Cal-Maine...... 50 Grupo Capistrano Alimentari...... 23 Poultry Specialties Inc...... 42 Camanchaca Inc...... 27 Harbor Seafood...... 39 Prestage Foods...... 15 Chicken of the Sea Frozen Foods...... 37 Harvest Meat Company...... 13 Protein Alliance...... 34 Chore-Time...... 42 International Meat Congress...... 33 Savage Poultry...... 66 ComeCarne...... 45 Jason’s Foods Inc...... 48 SeaPort Products...... 57 Country Charm Eggs, LLC...... 18 Keyport International...... 36 Sea Watch International, Ltd...... 7 Creighton Brothers...... 69 L & S Foods...... 4 Shorepoint Insurance Services...... 32 D & R Foods...... 22 LaMonica Fine Foods...... 2 South American Beef ...... 72 Deb El Food Products LLC...... 51 Lamitech...... 47 Taurus Food Products...... 10 Deep Sea Shrimp Company...... 54 Maloney Seafood...... 25 Thunderbird Food Machinery...... 12 Devi Seafoods Inc...... 67 Manning Poultry...... 68 Tippmann Group/Interstate Warehousing...... 66 Dolphin Trading...... 8 Maxfield Seafood...... 59 Tongwei Hainan Aquatic Products Co LTD...... 55 Dutt & Wagner of Virginia, Inc...... 14 Metlife Financial...... 40 Turkey Valley Farms...... 28 Eastern Poultry Distributors, Inc...... 31 Mexican Beef...... 65 Urner Barry ...... 29 Estherville Foods...... 26 Midwest Poultry Services...... 16 Urner Barry’s Executive Conference...... 35 Farbest Foods...... 21 Multiexport Foods...... 41 Vista Food Exchange, Inc...... 38 Florida Dept. of Agriculture...... 17 National Poultry & Food Wabash Valley Produce...... 19 Foa & Son Corporation...... 24 Distributors Association (NPFDA)...... 43 Westside Foods Inc...... 61 FreezPak Logistics...... 11 North American Meat Institute (NAMI)...... 58 Win Transport, Inc...... 71
70 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015 What’s in store Continued from page 1 weights, at least somewhat mitigating 2013—and should it continue to trade supply concerns for both pork and beef. fairly steadily in the first quarter, grocers situations on the red meat side causing The question everyone is asking is whether will be more likely to put the pig back into record high prices, the poultry sector was or not beef demand can sustain itself as a consistent rotation within their circulars. able to benefit from increased consumer prices hold at this level, or even continue demand. The pork industry, coping with to rise. Currently, there are a few factors Chicken is looking to rule the roost again the affects of PEDv, saw huge price swings working in favor of more consumer in 2015. Performance in this protein over the course of the year—resulting in spending ability, including lower energy category throughout the past year makes grocers inability to feature product on a costs, a lower unemployment rate, and poultry the defending champion going consistent basis. The smallest cattle herd in hints of an improving economy. So far, forward. Attractive pricing and comparable over 60 years contributed to soaring beef evidence suggests that at least those who value wins over shoppers, while prices, and despite beef demand remaining are able are willing to pay the higher prices consistency in the market allows grocers notably strong, many consumers were for beef. to persistently reserve ad space for chicken forced to trade in their steak knives for products and often rely on it as a driver for hamburger buns as ground beef proved While PEDv is still a concern among pork store traffic. most popular throughout the summer producers, the impact on the market so grilling season—along with the lower-cost far in 2015 cannot compare with that Last year, we saw some historical patterns chicken option, of course. of last year. With the panic subsiding completely rewritten. So, what will we as the industry copes with and manages be watching in 2015? Supply/demand The rise in beef prices has some suggesting the disease, it’s likely that the market scenarios, wholesale market action, this may be the new normal. In fact, it volatility we saw throughout 2014 will changes in holiday buying, changes in may be a few years until we see any kind not be replicated. As pork prices evolved the feature landscape, weather, seasonal of falter in retail beef prices, as early into unpredictable waves of highs and fluctuations, fuel prices, and consumer indications of probable herd expansion lows, grocers were unable or unwilling to diets and trends.UB are evident, but certainly this aspect of rely on retail pork products as mainstay the cattle cycle is a gradual process. Lower feature items. Currently, the pork cutout Article contributed by Jamie Chadwick feed costs have resulted in heavier carcass has reached its lowest levels since April [email protected]
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X ______X ______Sign here for approval and fax to: 732-341-0891 Sign here for approval and fax to: 732-341-0891 Dated ______Dated ______Urner Barry • P.O. Box 389, Toms River, NJ 08754-0389 Volume 10, Number 2 • Spring 2015
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72 • URNER BARRY’S REPORTER / VOL. 10, NO. 2 / SPRING 2015