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The Wall Street Journal has a well produced video report on a project in Massachusetts to conserve farm land by saving the farms themselves. A couple of conservation advocates helped sponsor a project with local farmers to make cow's milk artisanal cheese for the local food market.
3.45 minutes long.
The new owner of the Greenbrier Hotel and the Sporting Club in West Virginia, Jim Justice, sees his famous property's future in rural tourism. The historic, gracious hotel is surrounded by 6500 acres of its own mountainous land and pastoral splendor of the Greenbrier River valley of West Virginia and western Virginia to the east. This beautiful setting has always been a strong attraction. But rural tourism is key to its future. Around the nation, tourism is already an important sector of the rural economy. Bed and breakfast lodging in restored three-story Victorian homes, outdoor sports, antique shopping, scenic tours, museums, winter skiing, summer theater, foliage tours, and vacation homes are familiar attractions for tourists. But the allure of these entertainments depends upon the health of the rural, pastoral, and wilderness landscapes. Tourists do no want to visit a rural society that is dying, with farms and villages dilapidated, fields without animals, houses deteriorating, small factories wrecked, and poverty displayed in the faces of a rural welfare class. Rural society as a whole must uplifted.
The attractiveness of healthy agriculture in a well-groomed pastoral landscape has been key to rural tourism in the northern California wine districts of Napa and Sonoma, of southern California's emerging wine district in the Temecula Valley, in northern New Hampshire's historic hotel district, in upstate New York's lake district, in Montana's boarding cattle ranches, for instance. Justice's vision is of a revitalized resort in the midst of a revitalized rural economy with thriving villages with attractive shopping for hotel guests. We hope that his vision expands to include revitalization of the agriculture of eastern West Virginia. There is already a small organic and natural farming sector growing up along side the regions' historic Angus cattle farming. A vibrant organic agriculture could be given significant support by a revitalized hotel. If the hotel and the Sporting Club featured local organic produce and meats, they would help build a floor of demand for the small producers.
I have reprinted an article that was published in the Register-Herald (Beckley, West Virginia, May 29, 2009) that reports a speech by Justice about the hotel's role in economic revitalization of the area. Justice discusses his vision for resort.
‘I really believe we’re on a mission,’ he says
By Tina Alvey
Register-Herald reporter
WHITE SULPHUR SPRINGS — For a prominent basketball coach, Jim Justice is proving to be quite an enthusiastic cheerleader as well, at least when it comes to his latest business venture, The Greenbrier.
Meeting with some three dozen community leaders in the hotel’s Chesapeake Bay Room Friday afternoon, Justice enjoined his audience, “Look at this place. It’s a national treasure.”
He added, “I really believe we’re on a mission” to revive the legendary resort and restore its reputation as a unique destination among the world’s elite.
Justice said many factors figured into his decision to buy The Greenbrier from CSX, not the least of which was the impact the resort’s financial woes were having on the employees and the businesses in surrounding towns that, whether directly or indirectly, depend on a thriving tourism industry for their very existence.
While Marriott Corp. made a bid for the potentially lucrative property, Justice said he feared the ultimate result of the Marriott brand on The Greenbrier would be a three-star hotel staffed by 700 to 900 employees, instead of the current peak level of 1,400.
“It would be like sandblasting Mount Rushmore,” he maintained.
Instead of lowering expectations, Justice’s vision for The Greenbrier includes re-securing that elusive fifth star, boosting employment at the resort to as much as 3,500, including those working at the casino now in the planning stage, expanding lodging accommodations to 1,500 rooms and seeing the surrounding “Norman Rockwell towns” bustling and brimming with shoppers.
“That’s where I think we’re going to go,” Justice enthused. “It can spin into real greatness for our community, our state and our nation.”
The real show-stopper in Justice’s presentation, however, was an unplanned interruption caused by the resort owner’s ringing cell phone. He had to take the call — it was Dr. George Sloan, a member of the inner circle of the Obama administration.
Sloan was calling to confirm the first couple would be visiting The Greenbrier, along with the secretaries of agriculture and commerce, all of whom he said are impressed by the private sector success represented by Justice’s acquisition of the resort.
The 75-year-old former Marine had further good news to announce to the group via speakerphone: The Helicopter Association of America is changing the venue of its next conference to The Greenbrier, a move that will also provide a shot in the arm for nearby Greenbrier Valley Airport since the participants fly their helicopters to the annual confab.
Sloan also predicted the National Spelling Bee would be staged at the resort in 2010. The event typically draws around 2,000 people, he said.
Following the call from Sloan, Justice added that the administration is encouraging businesses that are receiving stimulus funds to schedule conferences at The Greenbrier, rewarding private sector initiative with a “push” from stimulus dollars.
Among those who attended Friday’s informal gathering were two county commissioners, a state senator, city officials from White Sulphur Springs, Ronceverte and Alderson, members of the Greenbrier Valley Economic Development Corp., the superintendent of Greenbrier County Schools and officials with the Greenbrier County CVB and the Greater Greenbrier Chamber of Commerce.
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Also see my previous discussion of the conservation of rural society in a series of eleven articles, "A Theory of Rural Life".
He's Jim Justice. And he did. And his adventure is a fascinating story. True, he's a basketball coach. But he's more. He's the Warren Buffett of West Virginia. The story is of interest to us, because the Greenbrier Hotel and its associated luxury home resort, the Sporting Club, are the region's largest employer and one of its largest purchasers of regional agricultural products. We own farmland in the county and are planning to raise organic, grass-fed cattle.
The previous owner of the hotel property was CSX railroad. In the past decade, the shift of luxury tourism to foreign resorts, cruise ships, and new leisure lifestyles brought hardtimes to the historic hotel. The economic recession capped its defeat. The hotel lost money, lots of money, for several years. In year 2000, it lost one of its stars, becoming a four-star resort. The owner renovated some of the hotels older rooms, but so far has not succeeded in regains its star. It entered bankruptcy earlier this year, while the owner negotiated a buyout agreement with Marriott Corporation.
Enter The Justice Family Trust, headed by Jim Justice (James C. Justice, II). Justice lives in Lewisburg, West Virginia, a small town and the Greenbrier County seat near the hotel. Since 2000, he has coached girls basketball at Greenbrier East High School. But Justice is no rube. He is the largest independent coal operator in West Virginia and worth hundreds of millions of dollars. He owns coal mines in other states, too. Earlier this year, he sold his West Virginia coke-coal operation to a Russian company for over $400 million in cash. He is also a "farmer," reputedly the biggest corn producer east of the Mississippi. We don't know Mr. Justice, but he is obviously a savy capitalist.
To buy the hotel, he simply purchased the holding company that owns it, for $22.7 million. He has taken the hotel out of bankruptcy, and is negotiating with Marriott to be the hotel's marketing agent. He has rehired laid-off workers and given them an investment in the hotel's future by offering them a percentage of future profits from a casino Justice will build at the hotel. He expects to hire over 600 additional workers. He is intent on refurbishing the hotel and regaining its lost star.
Here is an article by Peggy Mackenzie on recent developments from the Mountain Messenger, a weekly newspaper published in Lewisburg. I have taken the liberty of reprinting this article, because Mountain Messenger's web site does not index its articles and it is not easily recoverable on the Web.
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Peggy Mackenzie 23.MAY.09
The Greenbrier’s new owner, Jim Justice and chief financial officer Mike McGovern testified before the United States Bankruptcy Court for the Eastern District of Virginia in Richmond on Tuesday, May 19. In a one-hour hearing, the Greenbrier’s bankruptcy filing was dismissed by U. S. Bankruptcy Judge Kevin Huennekens.
"This is a terrific outcome for everyone," said Justice. "It’s a win-win-win for everybody, for the employees, community, CSX, Marriott and The Greenbrier. "Now we can put this behind us and really start moving forward with growing our business and restoring our fifth star to our five-star bloodline."
In his testimony, Justice assured the judge that his company, Justice Family Group, had the financial means to make the plan work. Both Justice and McGovern testified that dismissing the case would be in the best interest of employees, the community and creditors and that the resort’s creditors would be paid in full immediately from a $17 million escrow fund, much sooner than if the Chapter 11 plan were to remain in effect..
During the hearing, the resort’s attorneys profferred testimony of support from Jeff Bryant, principal at Greenbrier East High School where Justice has been the girls’ basketball coach since 2000. Attorneys for Marriott, the Greenbrier Council of Labor Unions, a member of The Greenbrier Sporting Club and an association that meets regularly at the resort were present for the hearing and offered additional endorsements for the dismissal. Justice also brought a stack of letters of support from employees, Greenbrier County residents and elected officials, according to Lynn Swann, Public Relations Director at The Greenbrier.
"Judge Huennekens was very pleased to dismiss this case. He told us that normally, bankruptcy cases do not have happy endings, but this one certainly does," said Justice.
The bankruptcy dismissal quickly followed Justice’s meeting on Friday, May 15th with officials from Marriott Hotel services, Inc.
At that meeting, Justice reiterated his intent to operate the world class resort and not retain any outside management firm. Marriott agreed to withdraw their opposition but asked for the opportunity to assist in marketing The Greenbrier as The Greenbrier. In return, Marriott will receive a commission from any bookings resulting from their efforts. If the parties fail to reach agreement, then Marriott will receive a break-up fee of $7.5 million.
He added there would be no exclusivity clauses in any marketing agreement between the two sides.
As quoted elsewhere, Justice said, "I feel I am better suited to work with the people and run The Greenbrier. Also, in the quest for our fifth star, I would be solely responsible for all capital expenditures. On the other hand, Marriott has a lot of marketing resources and can help us increase our occupancy levels. This will benefit The Greenbrier, Marriott and the people of the Greenbrier Valley."
Fulfilling a promise to move quickly regarding the master collective bargaining agreement with the unions, Jim Justice, met last week with union leaders to draft amendments the agreement ratified on April 30, 2009.
"When I became the owner of The Greenbrier, I promised that one of the first things we would do would be to take another look at the contracts with the unions. I know how hard everyone worked over the past 18 months and I am happy that we were able to make some positive adjustments that will benefit the employees," said Justice.
The new collective bargaining agreement with The Greenbrier’s unionized employees was "sweetened considerably" compared to the deal the workers had agreed to with Marriott.
As quoted in The Charleston Daily Mail, the agreement includes:
Improved healthcare provisions.
A 401 (k) retirement savings plan with up to a 3 percent match.
A meal benefit to eat one meal a day at the resort. Costing The Greenbrier about three-quarters-of-a-million dollars a year, that perk had previously been eliminated. Said Justice, "We put it back in."
Overall, "the package of up grades we put back in probably meant an upgrade to employees of about $3.5 million," Justice added.
In addition, Justice promised when the hotel earns the prestigious five-star rating from the Mobil Guide, they’ll all receive a one-time payment equal to 10 percent of their gross pay. "That’s a big bump," he said.
The Greenbrier lost its 5th star in 2000. Although CSX invested $50 million on improvements, the resort has not regained Mobil’s top rating.
The State Legislature recently revised a law that allows The Greenbrier to operate a casino. It included a provision that a portion of the casino’s handle would go to an employee benefit fund.
"We project that to be at $5 million a year," Justice said.
A day after the bankruptcy dismissal, Jim Justice, standing tall before more than 400 Greenbrier employees at a special meeting, pledged to return the historic resort to its former glory. "It’s over," he said, referring to the bankruptcy filing and the resort’s uncertain future.
With the final hurdle overcome, Justice is ready to start actually running The Greenbrier. The larger question may be "...how to turn The Greenbrier from a money pit to a profitable enterprise," In the opinion of Talkline host Hoppy Kercheval of MetroNews, "That could be the biggest business challenge of his career."
After racking up more than $90 million in losses in the past five years, operating The Greenbrier as a stand-alone, independent property will likely be a big challenge for Justice.
But Justice enthused, "...I’m a guy who will enjoy the actual production of something, whether it be mining a ton of coal or harvesting a bushel of corn or growing an extra 50 Christmas trees.
"I don’t know how this story cannot turn out to be great," Justice said. "I don’t try to impose my conviction on anyone but I believe the Good Lord is guiding this whole process. There were a lot of people hurting. We’ve been able to make a lot of good things happen here. I’m humbled to be a part of all the goodness that is going on.
"It’s been a pretty good daggone 21 days in my book," he exclaimed.
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Here are other news articles about Justice's purchase of the hotel.
"Marriott Corp., Coal Operator Dispute Who Owns The Greenbrier," West Virginia Business Litigation, May 12, 2009.
A glimpse of Justice's businesses is provided by Ken Ward, Jr., "Greenbrier buyer Justice pays off safety fines," The Charleston Gazette, May 14, 2009. See also, Ken Ward, Jr., "Greenbrier buyer ran up $1 million in unpaid MSHA fines," The Charleston Gazette, May 13, 2009.
Eric Eyre, "Taking a gamble: New Greenbrier owner to open $20 million 'Monte-Carlo style' casino," The Charleston Gazette Sunday Gazette-Mail, May 24, 2009.
More information on the Marriott Hotel Corporation side of the deal in George Hohmann, "Greenbrier deal: Justice anxious to move on with plans," Hotel Online, May 19, 2009.
Podcast interview about the hotel purchase with Justice, includes information about Justice's coal mining operation and sale to a Russian company. Jessica Lilly, "Justice talks about The Greenbrier deal," West Virginia Public Broadcasting, May 19, 2009.
Biographical information on Justice provided in George Hohmann, "Greenbrier's new owner successful in many areas," Charleston Daily Mail, May 13, 2009.
Much less public information is available about the kosher beef market, than is available about the regular beef industry and market, because the USDA does not keep statistics on kosher slaughter specifically. Moreover, most of the kosher packers, processors, and distributors are privately held companies, which do not publish their business information into the public domain. As a result, we must estimate the size and nature of the kosher beef market based on nonsystematic and opportunistic data. The following estimations are derived from a model that meets the few publicly available items of information about the market.
The total US kosher food market in 2008, including non-meat products, as well as meat products, was estimated by Lubicom Marketing Consulting to be $12.5 billion in total retail sales. This market grew 15% annually from 1997 to 2002; it is assumed to be growing at that rate today.
In 2008, about 11.5 million consumers regularly ate kosher food products. More than half of these consumers were not Jewish. Consumers who do not keep kosher are attracted to kosher food, because they believe it is likely to be safer than non-kosher foods. This consideration became especially important after the discovery of BSE in 2003.
The attraction of kosher beef to non-kosher consumers indicates that, for them, kosher beef is a niche product, similar in status to organic beef.
Kosher beef is a small portion of the total kosher food market. It is not even the largest selling kosher meat, which is poultry. Total U.S. retail sales of kosher beef (cuts and ground meat) is estimated to have been about $611 million in 2007.
Kosher beef is, therefore, a tiny portion of the market for all beef in the U.S.—less than one percent of all beef sales for the year.
Only 42% of regular kosher consumers are occasional purchasers of kosher cut and ground meats (mostly poultry). Twenty per cent of kosher meat consumers are Muslim consumers who follow halal, Islamic religious law regarding meat slaughter and consumption.
The small size of the kosher beef market is due directly to the high price of kosher beef. The average retail market price of kosher beef, averaging and weighting all cuts and ground beef, is $11.32 a pound. (This price compares to the similarly computed average price of regular beef of $4.15 a pound.)
I make two estimations for the average per capita consumption of kosher beef in 2007 in the U.S. As kosher beef is a niche product, its consumption cannot be directly compared to consumption of commodity beef, which has, as a base of consumers, the entire U.S. population. Rather, for the niche market, we estimate average consumption only by the consumers who buy in the niche market.
With this guideline, here are two estimations. The first, based on all the consumers in the niche market, yields the lowest average consumption; the second, based on the consumers dedicated to keeping kosher, yields the highest average consumption.
1. Based 11.5 million consumers of kosher foods, including beef, the average, per capita, consumption of beef (in 2007) would have been 4.7 lbs, costing $53.
2. Based on (conservatively estimated) 600,000 Jewish persons who keep kosher, the average, per capita, consumption of kosher beef (in 2007) was 90 lbs., costing $1000.18.
What may we infer from these estimations?
First, the estimations make clear that consumption of kosher beef is not a regular habit for all kosher consumers, in the same way that commodity beef is a regular menu item for most Americans. Given the prices of kosher beef, the amount of kosher beef consumed by group 1 (above) would be limited to a few meals a year for a family.
If kosher-keeping Jews are considered the overwhelming majority of kosher beef consumers, their estimated consumption would be sufficient for a family to eat a kosher-beef every week.
These inferences are supported by other considerations. Beef consumers who are not Jews keeping kosher are discouraged from regular consumption of kosher beef, not only by its high price, but also by the reputation that kosher beef is inferior in taste and texture to regular beef.
The suspicion that most kosher beef is consumed mainly by Jews who keep kosher is supported by several considerations.
First, the retail marketing of kosher beef is concentrated. Fresh cut and ground kosher beef are available at markets only in geographical areas with high populations of Jews. These areas are New York City, Chicago, Baltimore, south Florida, and Los Angeles-Orange County (California). Metro New York City has the highest concentration of Jews who keep kosher in the country; it also has the most convenient retail marketing of fresh cut and ground kosher beef in the country.
Second, caterers are important purveyors of kosher beef. (We could find no public data on the proportions of kosher beef eaten at home, at catered events, and in restaurants.) By contrast, in commodity beef marketing, caterers are not significant, while restaurants account for nearly half of the consumption of regular beef. Caterers are obviously special occasion sources of kosher beef consumption.
The high price of kosher beef can be attributed to five factors:
* The small number of kosher slaughter houses and processing (kashering and traybering) plants;
* The high labor cost of kosher slaughter and high cost of kosher certification;
* The method of kosher slaughter, which limits the number of cattle that can be slaughtered daily;
* The regulation that only the front section of the steer, from the tenth rib forward, can be consumed as kosher, which limits the amount of meat to market; and
* The small demand for kosher beef.
The small size of consumer demand for kosher beef explains the size and concentration of the kosher beef packing and processing industry.
There are nine major packers and processors of kosher beef; but only five of them provide kosher slaughter. One company, which does both kosher slaughter and processing, Agriprocessors of Postville, Iowa, accounted for 50%-60% of the wholesale kosher meat trade before its bankruptcy. Agriprocessors also sold some of its products, under several labels, in the direct-to-consumer retail trade.
I estimate that 834 steers are kosher slaughtered daily (in a six-day work week). This small number of head contrasts to the conventional beef market, which slaughters over 93,000 head a day (seven-days a week).
Consumers living outside the few major metropolitan areas where kosher beef is sold retail in meat markets must purchase their beef (usually frozen) by package shipment from processors, distributors, or retailers. Though some buyers have experimented with buying clubs and cooperatives, such purchases are, impressionistically, a tiny portion of all kosher meat purchases.
Note. This discussion builds on and corrects an earlier article on the kosher beef market.
Not just cities and suburbs have been hurt by the mortgage crisis; rural life has been significantly damaged, as well. Though most farms are prospering or above water, a scattered rural population is dependent on secondary agricultural employment, such as tractor sales and repair and other small manufacturers, which have lost business in the downturn. (Nick Timiraos, "Foreclosure Trouble Sreads To Those Who Bet The Farm,"The Wall Street Journal, Tuesday, May 5, 2009.)
The U.S. beef industry and beef market are the largest in the world. On January 1, 2007, the US cattle herd was 97 million head. During the year, 2007, 34.3 million head, including culled dairy cows, were slaughtered, yielding 26.42 billion pounds of carcass beef.(1) The total retail value of consumed beef was $108.4 billion.(2)
The average American ate 65.2 pounds of beef in 2007. The amount of beef consumed year to year fluctuates with the price of beef. Consumption in 1975 was the highest since 1960 at 88.5 lbs. per capita. Consumers prefer fresh beef over processed beef. Data from the 1990s show that consumers ate 87% of their beef fresh (or fresh frozen), and only 13% processed (e.g., hot dogs). Ground beef constituted 42% of consumer choice of fresh (or fresh frozen) beef. Steak was the second choice at 20%.(3)
In 2007, half (52.5%) of the beef was consumed at home—a total of 34.24 lbs. that cost the consumer on average $4.16 per pound at the retail grocery market, for a total expenditure of $142.43 that year.
The other half (47.5%) of the beef was consumed in restaurants—a total of 30.96 lbs. that cost the diner on average $7.00 per pound, for a total restaurant expenditure of $216.84 in 2007.(4). Ground beef constituted 60% of beef choices at restaurants.(5) For sit-down restaurants, that are not fast food restaurants, brisket is the most popular choice of beef, because of the use of brisket for barbequed beef.(Source)
Beef consumption is not uniform across all groups of consumers. A study of consumption in the 1990s reveals the following patterns. Non-Hispanic Black Americans consumed the greatest amount of beef—77 lbs fresh and 15 lbs. processed in the 1990s. Low income Americans consumed a greater percentage of their beef, 70 per cent, at home than at restaurants. Americans living in the Midwest ate more beef, 72 lbs. per year, than Americans living in other sections of the country. Rural consumers ate more beef, 75 lbs. per year, than urban residents.(6)
Conventionally raised and slaughtered beef dominate national sales. The discovery of BSE (bovine spongiform encephalopathy) in a US beef herd in December 2003, however, greatly increased consumer interest in beef that is safer or is believed to be safer. Organic beef, natural beef, pasture-fed beef, and kosher beef have, as a consequence, since 2003, emerged as distinct, growing niche markets for beef.
“Organic” and “kosher” are regulated certifications of beef. “Organic” is a USDA label. It requires that the animal so designated be raised without hormones and on feed or pastures free of chemical fertilizers, among other requirements. “Kosher” is a private, Jewish designation. It refers to a religious method of slaughter of the steer and the sections of the resulting carcass that may be eaten. Kosher certification is administered by different rabbical organizations, who supervise the slaughter of the animal and the initial preparation of the edible carcass. “Natural” and “pasture-fed” are not regulated designations, but the USDA recommends that labels for the beef products explain to what the designations refer.
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1. USDA, Economic Research Service, “U.S. Beef and Cattle Industry: Background Statistics and Information,” http://www.ers.usda.gov/news/BSECoverage.htm
2. Estimated from USDA data by author.
3. Christopher G. Davis and Biing-Hwan Lin, “Factors Affecting U.S. Beef Consumption,” USDA, Economic Research Service, October 2005, LDP-M-135-02.
4. Percentages for place of beef consumption from "Enhancing Food Commercial Sales by Small Meat Processing Firms", Debra Tropp, et. al., USDA, 2004. Based on survey of 200 Texas restaurants by Texas A&M University. Average retail grocery cost of beef from "US Beef Industry ...", Kenneth H. Mathews, Jr., et. al., USDA Economic Research Service, April 1999, Tech. Bulletin no. 1874. Average cost of beef at restaurants estimated by author.
5. Christopher G. Davis and Biing-Hwan Lin, “Factors Affecting U.S. Beef Consumption,” USDA, Economic Research Service, October 2005, LDP-M-135-02.
6. Christopher G. Davis and Biing-Hwan Lin, “Factors Affecting U.S. Beef Consumption,” USDA, Economic Research Service, October 2005, LDP-M-135-02.
Henry Alford, "How I Learned To Love Goat", The New York Times, March 31, 2009.
The issue is taken up at Hot Air.
At the national organic food show in Anaheim, California, national celebrities in the local food and organic food movements hope that Michelle Obama's support for them will lead to an increase in federal support for local, organic food, as, for instance, by increasing the federal lunch subsidy to pay for more expensive local, organic foods for school children.
And fishing boats. And community supported agriculture. And the local food movement. This kind of lunacy is typical of over-zealous regulatory fever currently epidemic in the Democratic Party that controls the White House and Congress.
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