The investigation is under way as the Justice and Agriculture Departments hold a series of antitrust hearings on competition in agriculture, and the USDA is expected to release sweeping antitrust rules covering the meat industry this spring, AP reports.
Bill Bullard, chief executive officer of R-CALF USA, said the federal Grain Inspection, Packers and Stockyards Administration has been speaking with his group's members for months and is "clearly asking questions in the context of an investigation."
"They appear to be doing a very comprehensive investigation of the overall behavior of meatpackers in the cattle market," Bullard said, adding he believes a main reason for the investigation is to gather information to help craft new rules.
The administrator of GIPSA wouldn't say whether the agency was investigating the so-called "Big Four" meatpackers â€” Tyson Foods, JBS, Cargill and National Beef â€” who together slaughter about 80 percent of U.S. beef.
But administrator J. Dudley Butler said GIPSA is being more aggressive in enforcing the Packers and Stockyards Act and investigations are part of that.
"I will acknowledge that what we're doing at GIPSA now is trying to ... enforce the Packers and Stockyards Act, and it's done in many ways, it's done through investigations, it's done through oversight, it's done through interagency working relationships," such as with the U.S. Department of Justice, Butler said.
According to AP reports, many ranchers and industry critics are hopeful that the investigation may force meatpackers to competitively bid for more cattle, slowing a 15-year trend in which several thousand ranchers are forced out of business every year. The nation's largest meatpackers bought about half of their cattle on the cash market in 2008, according to GIPSA. In that market, feedlots notify meatpackers cattle are for sale and receive bids for the animals.
But, the largest companies have increasingly avoided that market in recent years, buying more cattle through prearranged deals with individual feedlots or ranchers, Butler said.
Critics say that with the biggest companies buying fewer cattle on the cash market, prices have dropped, hurting smaller feedlots and ranchers who don't have deals with the large meatpackers.
Tyson Foods spokesman Gary Mickelson wouldn't comment when asked whether the company was being investigated. In an e-mail, he said Tyson buys most of its cattle through competitive bidding. Spokesmen for JBS and Cargill said the companies often communicate with GIPSA but weren't aware of an investigation. National Beef officials didn't respond to a message seeking comment.
Mark Dopp of the American Meat Institute, an association that includes meatpackers, said both ranchers and meatpackers benefit from agreements between producers and packers.
"The producer...is entering into these agreements because they find them beneficial," he said. "It takes two to tango."
Source: Associated Press
Restaurant Performance Index tops 100 markFueled by improving sales and traffic levels and growing optimism among restaurant operators, the National Restaurant Association's comprehensive index of restaurant activity rose sharply in March. The Association's Restaurant Performance Index (RPI) stood at 100.5 in March, up 1.4 percent from February and its strongest level since September 2007. In addition, the RPI rose above 100 for the first time in 29 months, which signifies expansion in the index of key industry indicators.
"The RPI's solid performance in March was driven by improvements among both the current-situation and forward-looking indicators," said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. "Restaurant operators reported net gains in both same-store sales and customer traffic in March, the first time in 31 months that both indicators stood in positive territory."
"In addition, restaurant operators are increasingly optimistic about growth in sales and staffing levels in the months ahead, while their outlook for the economy soared to its strongest level in five years," Riehle added.
The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 99.0 in March - up a solid 2.4 percent from February's level of 96.7. Although the same-store sales and traffic indicators turned positive in March, the labor and capital expenditure indicators continued to lag behind, which led to an overall reading below 100 for the Current Situation Index.
For the first time in 22 months, restaurant operators reported net positive same-store sales. Forty-three percent of restaurant operators reported a same-store sales gain between March 2009 and March 2010, up from 28 percent of operators who reported higher sales in February. In comparison, only 36 percent of operators reported a same-store sales decline in March, well below the 57 percent of operators who reported negative sales in February.
Restaurant operators also reported a net increase in customer traffic in March, the first positive reading in 31 months. Forty-one percent of restaurant operators reported an increase in customer traffic between March 2009 and March 2010, up from 25 percent who reported higher customer traffic in February. Thirty-six percent of operators reported a traffic decline in March, down from 55 percent who reported lower traffic in February.
Along with improving sales and traffic performances, restaurant operators reported a moderate uptick in capital spending. Thirty-six percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, up from 30 percent last month and the highest level in five months.
The Expectations Index, which measures restaurant operators' six-month outlook for four industry indicators (same-store sales, employees, capital expenditures and business conditions), stood at 101.9 in March - up 0.5 percent from February and its strongest level in nearly three years. In addition, the Expectations Index stood above the 100 level for the third consecutive month, which signifies expansion in the forward-looking indicators.
Restaurant operators are growing more optimistic about their sales prospects in the months ahead. Fifty percent of restaurant operators expect to have higher sales in six months (compared with the same period in the previous year), up from 44 percent who reported similarly last month and the strongest level in 33 months. In comparison, just 15 percent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year, compared with 16 percent who reported similarly last month.
Restaurant operators are also gaining confidence in the direction of the economy. Forty-six percent of restaurant operators said they expect economic conditions to improve in six months, up from 38 percent last month and the strongest level since March 2005. Meanwhile, only 12 percent of operators said they expect economic conditions to worsen in the next six months.
Along with an improving outlook for sales and the economy, restaurant operators' plans for capital expenditures remained positive. Forty-seven percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, compared with 48 percent who reported similarly last month.
Source: National Restaurant Association
Sausage products recalled due to Listeria concernsCustom Corned Beef, Inc., a Denver, Colo., establishment, is recalling approximately 460 pounds of fully cooked crumbled pork sausage products that may be contaminated withListeria monocytogenes, the U.S. Department of Agriculture’s Food Safety and Inspection Service announced.
The products subject to recall are 10-pound boxes with two, 5-pound packages of “Polidori, Fully Cooked Pork Sausage Crumbles, Keep Refrigerated/Frozen.” Each box label bears the establishment number “EST. 4121” inside the USDA mark of inspection. The fully cooked crumbled pork sausage products were produced on Apr. 9, 2010, and were distributed to institutional establishments in Colorado.
The problem was discovered by a receiving federal establishment who had recently been tested by FSIS for Listeria monocytogenes. The receiving establishment investigated the cause and contracted with a third party laboratory to test intact packaged product. The tested lot was found to be positive for Listeria monocytogenes, and the receiving establishment notified FSIS. FSIS has been made aware of no reports of illnesses associated with consumption of this product.
ConAgra breaks ground on Slim Jim plant expansionOhio Gov. Ted Strickland was in Troy Friday morning to help break ground on the expansion of a local company. ConAgra held a groundbreaking ceremony for the addition to the facility on Dye Road. The $64.7 million expansion will allow the company to create 190 new jobs.
The company said it is relocating its production of the Slim Jim Beef Stick snack food to Troy. Company officials said 47,000 square feet will be added to the existing building. Four production lines should be up and running within 12 to 15 months, according to Troy Mayor Michael Beamish.
Strickland said, "This is a great day for Troy, a great day for Ohio and a great day for the country, who enjoys Slim Jims."
A frozen foods operation in Troy currently employs about 400 workers.