EAST SETAUKET, NEW YORK - MARCH 16: An image of the sign for Outback Steakhouse as photographed on March 16, 2020 in East Setauket, New York. (Photo by Bruce Bennett/Getty Images)
Outback Steakhouse takes what we love about Bloomin’ Onions to use on fried chicken
We can all agree that the Bloomin’ Onion at Outback Steakhouse is possibly the greatest appetizer ever created, right? I mean, I don’t know about you but I could sit there and eat three of the things and not even worry about ordering a main course, they are that good.
However, I’m also a huge fan of fried chicken. I don’t think there is anything better than chicken when it’s fried to perfection and seasoned just right.
So imagine how ecstatic I was when I heard that Outback Steakhouse was going to combine two of my favorite foods into what could be the food find of the year.
Bloomin’ Fried Chicken coming soon to Outback Steakhouse!
According to People.com, Outback is going to take a chicken cutlet, batter it in the same seasoning they use for the Bloomin’ Onion and then fry it. Then they are going to add some of that amazing bloom sauce on top and serve it as a main course with a couple of side dishes.
Holy crap does that sound good.
In addition, Outback has also announced they will be lowing the prices on some of their menu items as well as adding a side due to how the pandemic has affected people’s dining habits. For some, it may be enough to convince them to finally head out for dinner instead of eating in.
Bloomin’ Fried Chicken is now available at all Outback Steakhouse locations for delivery, dine-in and curbside pick-up. Will you be trying this decidedly delicious sounding new addition to the menu?
Hog prices shot to a three-month high on Friday, trading over 60 cents per pound for the first time since May.
Pork is getting pricier as foreign buyers, especially China, look to the U.S. to supply their meat demand. China lost millions of pigs last year to an epidemic, African swine fever, leaving them facing a pork shortage.
Meanwhile, U.S. slaughterhouse demand is finally returning to pre-COVID levels. For months, U.S. meatpackers had slowed down or shuttered plants as a result of COVID outbreaks in their tightly packed facilities. Rising domestic demand is helping hogs rebound from the abysmal low they reached in April of 37 cents.
Despite the 60% price gain seen since April, Friday’s price of 59.5 cents per pound for October lean hog futures is still too low for many pig farmers to make a profit, leaving them hoping for even more demand.
Unfortunately, they likely won’t see the demand from American grocery shoppers, who have been slowing their meat purchases and are likely to buy even less after Labor Day, traditionally the end of the summer grilling season.
Beans climb on exports
Soybeans exceeded a two-year high on Friday, valued over $9.70 per bushel.
The market has been soaring higher predominantly on Chinese demand; China is the world’s largest soybean importer and has been aggressively contracting to buy this fall’s U.S. soybean harvest. China broke records with its purchases of last year’s crop and is expected to buy even more this year.
Despite its protestations that China has sufficient food, the Asian giant was the top buyer of U.S. corn, wheat, and pork exports last week as well.
Looking ahead, the size of this fall’s bean crop is still in doubt, but farmers will begin harvesting in the coming weeks, giving a clearer picture to the upcoming supply. Meanwhile, Brazil is beginning to plant what could be the world’s largest soybean crop in history, a factor that could weigh on prices next spring after their harvest.
As of midday Friday, November soybeans traded for $9.68, a price that will continue to be reactive to foreign factors.
The Chicago commodity exchanges will be closed on Monday due to Labor Day holiday.
A study from the Iowa Pork Producers Association shows the hog industry contributes significantly to Iowa’s economy, in addition to keeping many small towns alive.
Association president Mike Paustian, of Walcott, says they wanted to show policymakers how important pork production is to everyone’s bottom line in the state. “This was an effort that IPPA did to try to actually put some real numbers to it,” Paustian says. “When you start to do that, you see that the pork industry in Iowa is a big economic driver and it’s certainly something for producers to be very proud of.”
With more than 5,400 pig farms statewide, the study shows pork industry sectors generated nearly $41 billion in sales, with production accounting for 34% of the total or almost $14 billion in sales from pork operations. “Pork farmers are greatly contributing to these rural economies and helping smaller towns stay vibrant and helping people find jobs who want to live in small-town Iowa,” Paustian says. “That’s great that that allows people to live that lifestyle that so many of us are in love with.”
Paustian says the study shows Iowa’s pork industry created over 147,000 jobs. “It’s nice to reflect on where our industry has gotten to and what it does as far as providing safe and affordable food for folks,” he says, “but also providing a lot of jobs.” Paustian says the analysis indicates a new pig barn sources about 35% of inputs locally. That’s because a new barn’s construction requires purchases including steel, concrete, and equipment.
There are almost 25-million hogs in Iowa, which accounts for about 32-percent of the entire U-S hog inventory.
AFBF'S Market Intel series has examined the impact that COVID-19 has had on livestock, beef and pork markets over the course of the pandemic. Food production was significantly disrupted, especially at livestock processing facilities, where labor shortages and worker protection measures slowed throughput at plants around the country and even caused some facilities to temporarily shut down. As a result, there was a sharp increase in the wholesale value of beef and pork that coincided with a rapid decline in the value of live animals, creating a record “live-to-cutout-spread,” which is the difference between the price that is paid for the live animal and the wholesale price of the processed animal product.
During this disruption, one area that has received less attention is the spread between the price of beef and pork leaving the processing sector and the price that consumers pay at the grocery store. Part of the reason for this is the time lag between when prices are paid and when data becomes available for analysis. However, we now have several months’ worth of data to examine and piece together a picture of the impact of COVID-19 on meat price spreads.
The Data
USDA’s Economic Research Service compiles monthly average values and the differences among those values at the farm, wholesale and retail stages of the production and marketing chain for selected cuts of beef and pork. Retail prices are from the Bureau of Labor Statistics’ Consumer Price Index. Wholesale and farm prices are from USDA's Agricultural Marketing Service. Conversion factors developed by ERS are used to convert retail weight to a carcass-weight equivalent. ERS calculates its price spreads on a per-pound-of-retail-product basis. It takes 2.40 pounds of the standard steer to produce a pound of retail beef and 1.14 pounds of wholesale beef to produce a pound of retail beef. For hogs, the conversion factors are 1.869 pounds of hog per pound of retail cuts and 1.04 pounds of wholesale cuts per pound of retail cuts. The gross farm values in the price spread tables are the farm price of live animals multiplied by the farm-to-retail conversion factor. The wholesale values are the average price of the animal's wholesale meat cuts times the wholesale-retail conversion factor. High price spreads can often lead to frustration at various sectors of the supply chain, from disgruntled producers experiencing declining shares to angry consumers facing higher prices at the meat case. Increasing price spreads can inflate retail prices and deflate farm prices.
Beef
Figure 1 shows the retail, wholesale and farm values of beef on a retail weight equivalent. The impact of COVID-19 is evident in the retail and wholesale values’ spike during late spring 2020. (It is important to keep in mind that these are monthly data, so the weekly variations that we have addressed in other articles are harder to distinguish.) However, as previously discussed, the shortage in processing capacity and the backlog of animals in the processing pipeline did not bump up the price of cattle. Instead, prices at the wholesale level shot up more than 100%, while retail prices climbed 25%. Farm-gate prices, on the other hand, dropped 5%. Keep in mind that these values have all been converted to a retail equivalent value, so they may not reflect the same magnitude seen in other reports.
Figure 2 examines the spreads between the farm, wholesale and retail values shown in Figure 1. A price spread is essentially the difference between the cost of an item at two different stages of the marketing channel. It can also be viewed as the costs and profits of the marketing system that moves the product from the farm to the processor to the consumer. Figure 2 shows three spreads: the farm-to-wholesale spread, as denoted by the red bars, the wholesale-to-retail spread, as denoted by the blue bars, and the farm-to-retail spread, the combination of the red and blue bars. For beef, COVID-19 resulted in the highest levels for all three price spreads since the data was first collected in 1970. The farm-to-retail price spread peaked in June at $5.21/lb retail weight equivalent. Also peaking in June was the wholesale-to-retail spread, at $3.86/lb retail weight equivalent. However, the farm-to-wholesale spread peaked in May at $3.90/lb retail weight equivalent.
The pork complex experienced a similar spike to beef, albeit at a lower magnitude. Figure 3 shows three spreads: the farm-to-wholesale spread, as denoted by the red bars, the wholesale-to-retail spread, as denoted by the blue bars, and the farm-to-retail spread, the combination of the red and blue bars. COVID-19 resulted in record levels for all three price spreads for pork since the data was first collected 50 years ago. The pork farm-to-retail price spread peaked in June at $3.65/lb retail weight equivalent. Also peaking in June was the wholesale-to-retail spread, at $2.84/lb retail weight equivalent. However, the farm-to-wholesale spread peaked in May at $1.19/lb retail weight equivalent.
The data also gives us the ability to calculate the producer’s share of the overall retail dollar. Figure 4 shows us the producer’s share of the retail dollar over the last 20 years for both beef and pork. Since 2000, the producer’s share of the beef retail dollar has averaged 47%, while the producer’s share for pork has averaged 27%. However, the value of both animal proteins has been trending downward over the last several years, dragging the average producer’s share down to 42% over the last three years for beef and 21% over the last three years for pork. Of course, this decline started before COVID-19, but the pandemic has exacerbated this issue, resulting in record lows for producer’s shares of the retail dollars. At 31%, beef producers experienced a record monthly low in June. Pork did not experience an absolute record low, but at 14%, it was near the record low of 12.3% (experienced in December of 1998) and is certainly the lowest in the last 20 years.
While looking at the producer’s share of the retail dollar is a helpful exercise in examining trends and even the impacts of recent events, nuance and context are warranted when citing this variable’s impact. For instance, this is the producer’s share of the retail dollar and does not include consumer expenditures in the “food away from home” channel, such as food purchased in restaurants. Additionally, these numbers and any calculations derived from this ERS dataset are simple average retail prices, not volume-adjusted retail prices, a more telling data point. These numbers also do not include the impact of features and promotions, so they miss the actual retail price paid by consumers, which is lower than the publicly available prices used in the producer-share calculations.
Conclusion
COVID-19 has dramatically impacted producer profitability, packing plant operations and the prices that consumers are paying at the retail level. Part of this impact can be found in the price spreads for beef and pork at each stage of production. COVID-19 has resulted in record price spreads for pork and beef at all three farm-to-consumer processing points: the farm-to-wholesale spread, the wholesale-to-retail spread, and the farm-to-retail spread. It has also greatly impacted the producer’s share of the final retail dollar, resulting in a record low share for beef producers and a near record low for pork producers. While some parts of the supply chain have largely recovered from the disruptions experienced earlier in 2020, the overall impacts continue to reverberate throughout various stages of production.
Researchers from the University of Tennessee Institute of Agriculture and Arizona State University have received a grant for $477,131 to examine consumer preferences for U.S. beef and to estimate beef import demand in select countries within Asia, Europe and Latin America. Results from this research will also provide insights regarding economic implications of changes in trade policies and provide information on how the U.S. beef export market can be strengthened.
While the United States is one of the largest beef exporters in the world, recent years have been wrought with trade disputes that have impacted agricultural trade, such as the trade war with China; U.S. withdrawal from the Trans-Pacific Partnership; a renegotiated U.S.-Mexico-Canada Agreement; and ongoing trade negotiations with the European Union. Although China opened its market to U.S. beef in 2017, beef exports to this region have remained negligible, further prompting research to help strengthen and expand the U.S. beef export markets.
Beef is one of the largest U.S. agricultural exports, making it a vital sector to analyze with respects to global trade. “Maintaining and expanding foreign markets for U.S. beef is crucial to the economic viability of U.S. agriculture,” said co-project director Karen DeLong, associate professor in the Department of Agricultural and Resource Economics. “This project will provide beef producers and processors with information of potentially significant drivers of future beef demand and important information regarding the potential for U.S. beef in foreign markets.”
The three-year project is funded by the USDA National Institute of Food and Agriculture and will target specific markets that are important to U.S. exports and overall global beef trade. Japan and Mexico are the two largest markets for U.S. beef and will be among the countries chosen for this study, along with three emerging markets: China, the U.K. and Germany. The three emerging markets were also chosen because they are representative of key regions around the world, allowing research results to be extrapolated for other countries.
“Ultimately, this project will provide insights regarding the economic implications of changes in the aforementioned trade policies and provide information on how the U.S. beef export market can be strengthened,” said co-project director Andrew Muhammad, Blasingame Chair of Excellence in Agricultural Policy. “The policy relevance lies in the analysis of different export markets outside the U.S. and whether or not foreign consumers are likely to purchase U.S. beef with different characteristics, and then using these results to assess the impact of pending and existing trade agreements on U.S. beef exports.”
Leading the effort is Carola Grebitus, an associate professor in the Morrison School of Agribusiness in the W.P. Carey School of Business at Arizona State University. UTIA co-project directors from the Department of Agricultural and Resource Economics are Karen DeLong and Andrew Muhammad.
A dedicated group of individuals saw their hard work come to fruition Saturday, Aug. 29, as the first annual Rendezvous City Beef Roundup welcomed more than 100 people to the Central Wyoming College campus to visit with Wyoming meat producers. Producers visited with consumers about the beef production process, the challenges and rewards of being a producer in Wyoming, and why there has recently been such a high demand for locally produced beef.
CWC’s Mobile Meat Science Unit was on the premises with faculty to explain the new meat science program and plans for the future Rocky Mountain Complex for Ag and Equine Sciences. A portion of the ticket price will support a new meat science scholarship at CWC. The culinary program students were busy grilling samples throughout the day of local beef from participating producers for the public to sample while they had the opportunity to listen to presentations from speakers such as Representative Tyler Lindholm on the new Herd Shares Act.
“It was certainly a team effort to bring this event to fruition,” Beth Monteiro, Executive Director of the CWC Foundation said. “Tyler McCann and his family were the real drivers of the day’s success, but this couldn’t have been possible without the help of folks like Eric and Tara Carr, our CWC foodservice, the other folks who work at the Foundation and our wonderful faculty who spent the day sharing their excitement for their programs.”
A small committee of community members along with McCann and CWC worked to coordinate the event, aligning speakers, facilities, advertising, and more.
“This was two years in the making, and we think it will become a model for other states to follow,” Carr said. “We were excited to be a small part of the event. Wyoming is at the forefront of local food opportunities, and being a part of providing consumers with Wyoming beef is exciting. Thank you to Tyler McCann for the vision and CWC for the support.”
Following the presentations and booths, fifty VIP ticket holders participated in a Beef Challenge event where they were asked to rank ten producers’ steaks on several parameters including texture, smell, tenderness, and flavor with the winning producer, Wyoming Legacy Meats, receiving a custom buckle made by GIST and a belt made by B.J. Griffin Leather Design. Additional awards were sponsored by Murdoch’s Ranch and Home Supply.
Event organizer Tyler McCann was particularly pleased with the number of producers who contacted him and came to the event and is excited about the opportunity it provided to bring producers and consumers together.
“We even had a producer from Nebraska who wanted to participate in the challenge event which we limited to just Wyoming producers this year,” McCann said. “They still decided to attend and bought VIP tickets so they could see how they could have this kind of event in Nebraska to promote local beef. We had folks from Chesapeake, VA, Seattle, WA, and Wisconsin as well. Wyoming beef was on both coasts by Monday morning!”
During the Beef Challenge, McCann began the event by thanking producers for their hard work, acknowledging that ranching is not an easy profession, and typically involves the entire family, with long hours spent making a living.
“I had an older producer and generational rancher say that he was just blown away and honored to have a roomful of people thanking him for producing beef for them,” McCann said. “I was shocked to see how serious people were about rating the steaks. People took so much care ranking them on the different categories and they had an extremely difficult time choosing their favorite.”
Following the Beef Challenge, comment cards were distributed to everyone to garner feedback as to how the event could be improved upon for next year.
“They wanted to tour facilities, wanted more information about what they’re eating, and how it is processed,” McCann said. “We had several people who said, ‘Please do this again next year!’ so we are already making plans to incorporate that feedback and those activities for 2021.” F
Inexpensive chicken was supposed to be the pick of the proteins in the pandemic. But suppliers with a greater focus on beef are outperforming those that rely more on poultry.
U.S. and Brazilian chicken producers have been struggling amid oversupply, weak prices and sluggish consumption, with analysts saying a production cut may be needed to prop up prices and defend margins. Beef suppliers have benefited from comparatively stronger demand and prices.
In the U.S., meat production has recovered from virus disruptions, meaning supplies are outstripping demand amid still sluggish food-service sales. With beef output back to normal, the red meat is likely to compete with chicken for grocery-store sales.
“We are going to have this flood of red meat coming into the market,” said Peter Galbo, an analyst at Bank of America, adding that retail features for beef are expected to rise “dramatically” this autumn.
Meanwhile chicken prices are too low and demand too weak to justify advertisements that can help generate sales.
Sanderson Farms, the third-biggest U.S. chicken producer, estimated last week its total production in the fourth quarter of fiscal 2020 will fall 5% from a year earlier. CEO Joe Sanderson predicted “lower demand during the holiday season for all of our products.”
In top chicken exporter Brazil lower output or higher prices may be inevitable to cover a sharp rise in feed costs, said Ricardo Santin, head of exporter group ABPA.
Local corn and soy-meal prices are at all-time highs amid strong demand and local currency weakness that boosts the appeal for exports. Corn prices should stay high amid tight supplies this year, according to Ana Luiza Lodi, an analyst at StoneX in Campinas. The government is considering exempting imports from tariffs to lower costs. Almost 80% of the cost of producing birds comes from feed in the country.
Brazilian poultry companies face weakness in both export and local sales. Traditional buyers such as Saudi Arabia and United Arab Emirates have reduced imports substantially this year. Export prices in August fell 20% from a year earlier.
China is the exception, with Brazil’s exports to the Asian nation climbing 28% this year. But China represents just 17% of Brazilian chicken exports. It’s a different situation in beef, with shipments breaking records this year due to China, which accounts for almost 60% of Brazilian exports.
While a slump in the Brazilian real, boosts export revenue in local currency, that hasn’t been enough to offset higher costs, squeezing exporters’ margins since May, according to Cesar de Castro Alves, an agriculture consultant at Itau BBA. In August, chicken production margins were negative 5%.
The local market hasn’t been helping, with consumption steady despite lower prices. Chicken’s discount to beef has never been bigger. While food-service demand is showing some green shoots, restaurant sales are still low and schools remained closed.
“Brazil’s chicken sector is at a crossroads, with producers increasing output amid a weak export demand and rising costs,” Alves, from Itau BBA, said in a telephone interview. Producers need lower supply to lift prices and return to profitability, he said.
