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News in Review
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Food Quiz
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Using Up Foodservice Inventory to Sustain Cash Flow
By: Wilton Marburger
In Foodservice, inventory at it's roots are products purchased in order to prepare and sell for more money than what you paid for them. The variance between sales price and cost is gross profit. Some foodservice establishments have large inventories that become stagnant for a number of reasons. First, many catering companies purchase large quantities of products, whether it be food, beverages or disposables to serve functions with specific menu and service requests. Many times these purchases create challenges as large parties sometimes drop the number of guests or cancel functions altogether leaving the caterer with reduced cash flow and an increased inventory. This problem multiplies overtime leaving goods that were purchased 2 to 3 months prior sitting on the shelves and becoming lost and forgotten. This problem creates an opportunity as the goods sitting on the shelves from prior months have already been paid for. In other words, they can be viewed as free goods. Herein lies an opportunity to create new with old.
Steps to to use up Inventory to Sustain Cash:
1) Have your team collect usage reports from vendors for the past month. This will tell you everything you bought to sustain current and upcoming business for the month period.
2) Have your team create a list of everything in your establishment that was not purchased over the last months period and how much you have on hand. This list will give you a "pantry" of goods that you need to get creative with.
3) Assess the list and challenge your team to create new menu items, presentations and sales techniques to sell the packaged "old goods" to recoup the cash sitting on your shelves.
You can use this opportunity to create an exciting challenge with possible rewards for your staff. Depending on the size of your excess inventories, it can be helpful to understand the amount of days of inventory you have on hand and also your inventory turnover ratio. More on these calculations later. ...
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There are only two words that will always lead you to success. Those words are yes and no. Undoubtedly, you've mastered saying yes. So start practicing saying no. Your goals depend on it!
- Jack Canfield
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View updated pricing and information each week on the website for the following food-commodity markets:
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Beef, Veal & Lamb |
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Total beef output last week rose 2.6% but was 5.7% less than the previous year. Choice and prime beef production last week may have been larger than a year ago due to a historically high percentage of cattle grading choice and above. Beef output is expected to seasonally peak this week. The beef markets are mixed. The USDA choice and select beef cutouts typically modestly depreciate during the next 10 days or so due to slowed post Memorial Day holiday demand. Cyclical charts suggest that the ground beef and 90% trimming markets may move lower as well into June. Price USDA, FOB per pound.
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Dairy |
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April US milk production was estimated by the USDA to be .1% less than last year due to a .3% smaller milk cow herd and just a .2% increase in milk per cow yields. The milk output slowdown is anticipated to intensify this summer unless milk prices improve considerably. Class III milk futures during the 2nd half of this year are averaging around $13.70 a hundredweight, well below farmer breakeven levels. The cheese markets remain fairly steady but are expected to move upward this summer. Prices per pound, except Class I Cream (hundred weight), from USDA.
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Poultry |
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Chicken production during April is estimated to have been 6% less than last year. Broiler egg set numbers suggest chicken output in the coming months could trend 5% plus below 2008 levels. When it?s all said and done, 2009 chicken production is forecasted to decline 4.6% from the previous year to its lowest level in 5 years. 2009 will almost certainly mark the first annual chicken output decline in 34 years. The chicken breast markets are trending higher. Additional chicken breast market increases are anticipated due to the downturn in output and a seasonal rise in demand. The chicken wing markets are expected to remain elevated deep into the summer. April US chicken retail prices were a record high. Prices USDA, FOB per pound except eggs (dozen).
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Seafood |
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US Gulf of Mexico shrimp landings during April were 40.6% larger than a year ago and the biggest for the month since 2006. 2009 through April Gulf shrimp landings were 45% more than last year. Strong US shrimp landings may persist. US sourced product only consists of roughly 15% of domestic shrimp consumption. Relatively engaging shrimp prices may persevere due to solid imports and lackluster demand. Prices for fresh product, unless noted, per pound from Fisheries Market News.
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Pork |
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Pork production last week rose 3.3% and was 2.5% above the same week a year ago. Slowed demand, now that proteins are mostly procured for the holiday weekend, is influencing many pork markets lower. History suggests that the pork cutout could trend 4% or so downward during the next 2 weeks before turning higher. The last 2 years, the sparerib market declined + 14% during the next 2 weeks. Buyers may want to visit pork contracts to take advantage of the relatively engaging pork and hog futures prices. Prices USDA, FOB per pound.
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Produce |
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The May 1st US storage potato inventory was 10% less than last year and the smallest for the date in the last 10 years. May 1st Idaho potato stocks were 14.3% less than 2008. Potato demand is lethargic however, which should cause potato prices to remain below year ago levels. The potato markets typically begin an upward course soon that carries into August. The lettuce markets continue to decline. Lettuce supplies could remain adequate during the next few weeks. The Florida tomato harvest may be shortened this week by wet weather but should improve soon. Prices USDA FOB shipping point unless noted (terminal).
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Oil and Grains |
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Soybean supplies may be tighter this summer than expected just a few weeks ago. The soybean and soybean meal markets are trending upward in an effort to ration demand. Prices USDA, FOB.
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Canned and Frozen Food |
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Tomato Products, Canned - The 2009 harvest will likely get underway in early July in California. Can and raw product cost increases are expected to lead to higher canned tomato prices for buyers this summer. Prices per case (6/10) FOB, unless noted from ARA.
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Processed Fruits and Vegetables - Vegetable processors continue to be concerned with planting delays in the Midwest and East. The canned vegetable markets are firm. Prices FOB per case from ARA.
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I need some new 'Specials'
Community member Bob Johnson writes...
I operate a small bar/restaurant that runs daily specials including meatloaf, pastas, mexican dishes, ect along with a large regular menu. Things have become mundane. Any ideas for something different using what I already have on hand? Here's my regular menu
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Changing Concepts
Community member Andy writes...
Anybody here ever change concepts? If so, was it worth it?
I was just thinking that I need a change in pace. sort of a fresh start. I feel like my blackboard is filled, and I'm still without a solution. I need to erase...
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Ah, the life...
Community member Boogie writes...
So the week's been o.k. but:
My food rep tells me they may be out of a crucial menu item that I need to order extra of today. (they are closed, of course on Monday)
I had to fire a no call/no show today via his voice mail - which now means I'm working...
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You will have to dig to enjoy me
As a member of the Labiatae family I am related to mint, thyme, sage and oregano, but the similarity stops there. Although there is a town named after me in France (where I was once grown on a large scale), my origins are Chinese and Japanese. My good friend, Dr. E. Bretschneider, was so enthralled when he discovered us in a Peking garden, he rushed us off to M. Pailleux, his friend who was vice-president of the Société d’ Acclimatisation. Not very popular in North America, I am still quite common throughout Asia. My plant grows as high as 16 inches and my oval dull-green leaves a puffy rough and useless. You will have to dig to enjoy me, and enjoy me you will. With my thin edible skin, a quick boil and butter, or cooled with a vinaigrette will reveal my slightly sweet flavor, which is reminiscent of salsify or artichoke. I can be steamed, baked, or sautéed in a wok but not for too long. Slight overcooking renders me mushy. Keep me away from aluminum surfaces to avoid oxidation. I am rich in carbohydrates and a small source of protein.
What am I?
The Food Quiz has is brought to you by Culinary Specialty Produce, a specialty produce broker that scours the world for the very best in specialty produce. Contact them at 908-789-4700 or by sending an email to info@culinaryproduce.com.
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