The Des Moines Register from Des Moines, Iowa on November 23, 2011 · Page 18
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The Des Moines Register from Des Moines, Iowa · Page 18

Des Moines, Iowa
Issue Date:
Wednesday, November 23, 2011
Page 18
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Page6B Wednesday, November 23, 2011 State Edition The Pes Moines Register Business Watch From Register staff and news services Economy grew at 2 percent rate in third quarter The U.S. economy grew more slowly over the summer than the government had earlier estimated because businesses cut back on restocking their shelves. The Commerce Department said Tuesday that the economy expanded at an annual rate of 2 percent in the July-September quarter, lower than an initial 2.5 percent estimate made last month. The government also said after-tax incomes fell by the largest amount in two years, reflecting high unemployment and smaller pay raises. The downward revision was largely because weaker data on inventory building came in after the government's first estimate. Many businesses reduced their stockpiles over the summer, probably because they didn't anticipate the strength in consumer and business spending. Economists predict growth will strengthen to around 3 percent in the October-December quarter. Many raised their estimates after seeing encouraging October reports on retail sales and factory output. Fed announces third round of bank stress tests The Federal Reserve announced on Tuesday that it would conduct a third round of stress tests to determine whether major U.S. banks can withstand a downturn in the economy. The latest round of tests comes at a time when many are concerned about U.S. banks' exposure to the European debt crisis, which could throw that region into a recession and rattle global financial markets. Vice Chairman Janet Yellen last week said the Fed would purse the stress tests in coming weeks. The Fed performed the first stress tests in the spring of 2009. The country's 19 largest banks participated. The initial stress test reassured investors that America's biggest banks had the resources to get through the recession and financial crisis. Hormel Foods net income falls, revenue rises Hormel Foods Corp.'s fiscal fourth-quarter profit slipped 3 percent as weak sales and higher ingredient costs hurt the maker of Spam, Dinty Moore stew and other packaged food. It's a struggle playing out regularly these days: Food makers need to raise prices to cover higher costs, but risk losing cost-conscious shoppers. Hormel said Tuesday that its total sales volume fell 7 percent, but higher prices helped nudge its revenue up and protect some of its profit. As a result, the company's earnings per share beat analysts' average forecast, and it issued a brighter 2012 outlook than analysts expected, which sent Hormel's shares higher in late morning trading. The company, based in Austin, Minn., said its net income fell to $117.3 million, or 43 cents per share, for the period that ended Oct. 30. That's down from $121.1 million, or 45 cents per share, in the same quarter last year. It also beat the 42 cents per share that analysts surveyed by FactSet forecast. CORRECTION The name of the new bar in the downtown Des Moines Marriott was wrong in Tuesday's Biz Buzz column. It will be called the City Center Lounge. Stocks of Iowa Interest Close Change CIom Change AT&T 28.08 -0.28 IBM 181.31 -0.17 Aegon 3.91 -0.07 Lee Enterprises 0.65 0.02 Alcoa 9.26 -0.21 Lennox 30.60 -0.31 Alliant Energy 40.91 -0.36 Marsh & McLennan 28.54 -0.36 American Equity Life 10.80 -0.22 Meredith 27.55 0.11 Ames National Corp 15.56 -0.03 MetaFincI 14.71 -0.54 Archer Daniels 28.41 0.12 MidWestOne 15.00 Arts Way 5.82 0.05 Monsnto 69.38 -1.31 Aviva 8.76 -0.08 NCentBsh 17.00 -1.25 Bank of America 5.37 -0.12 PepsiCo 63.18 0.03 BerkHB 74.36 0.04 Principal Financial 22.70 -0.28 BonTon 2.67 -0.03 Procter & Gamble 61.69 0.03 Caseys 50.35 -0.48 Regions Financial 3.90 -0.07 CntryLink 36.44 -0.46 Rockwell Collins 52.37 -0.18 Citigrp rs 24.46 -0.54 Sauer-Danfoss 33.70 -0.47 ConAgra 24.18 -0.01 SearsHldgs 62.23 -1.81 Deere 71.92 -0.76 SmithfF 23.23 0.42 DuPont 45.40 -0.08 Target 52.69 0.15 EMC Insurance Group 18.40 -0.45 3M 77.83 -0.01 Exxon Mobil 76.03 -0.88 Tyson 19.36 -0.10 FBL Financial 31.32 0.21 Union Pacific 98.25 -0.16 Flexsteel 13.52 0.02 United Fire 17.91 0.04 FordM 10 09 0.04 United Parcel 68.04 -0.18 Gannett 10.56 -0.24 US Bancorp 24 67 0.05 Green Pins 10.28 -0.06 ValeroE 20.88 -0.20 HNICorp 22.71 -0.40 Wal Mart 56.85 0.19 Heartland Express 13.06 -0.24 Wells Fargo 23.93 -0.25 Heartland Financial 14.01 -0.01 West Bank 8.96 -0.22 Hormel 28.82 -0.01 Whrlpl 4789 -0.60 ING 6.62 -0.20 Windstrm 11.25 -0.19 INTL FCSt 23.34 -0.43 Winnebago 6.35 -0.26 Grains & Livestock SOYBEANS W $1153 OCORN $5.99 CATTLE W $i $121.45 $1.48 HOGS $87 82 -$013 IOWA REGIONAL Iowa elevator bids on com and soybeans compiled by Die Federal-State Grain Market News Hi Des Moines on Tuesday Amounts below are once per bushel CORN SOTKANS REGION (Ho 2 Yellow) (No. 1 fefew) ftorthwest $5.78 J5 91 $10.97$i1.13 Nor Central $5.70-15 79 $10.85-510 98 Northeast S5 60-J586 $10.83-11120 Soutfwest $5 71 $5 94 J1C96-J111I SoutfiCtraal $5 71 $5 94 $!0K$!M1 Southeast $5 77 $5 92 $'089 $'1.31 FUTURES Futures trading on the Chicago Board of Trade: OPEN HIGH LOW SETTLE CHO. SOYBEANS 5,000 bu minimum- cents per bushel Jan 12 1156 1156 1141 1153 5 Marl2 1 162.75 1165 50 1150 75 1162.75 4 75 MayU 1172 1174.75 1161.25 1172 4.25 JulU 1179.25 1183 75 1169 50 U 80 7S 4 Aug 12 1181.75 1181.75 1172 1180 4 Sep 12 1169 1172.50 1169 1172.50 4.75 Nov 12 1 165 25 1171 1158 1169 4.75 Janl3 1172.25 1177.75 1171.25 1177 75 5 Mar 13 1185.75 1187 1182.75 1187 4.75 Mon s sales 127495 Mons open int 524359. up 1994 CORN 5,000 bu minimum- cents per bushel Dec 11 599 601.50 59425 599 U5 Mar 12 608 608 50 601 SO 605.75 .75 MayU 612.25 615 608 25 612.25 75 WI2 61025 61875 61025 61575 .25 Sep 12 571 50 573 568 569 75 .75 Dec 12 551 553 50 546 50 549 1 Mar 13 563 25 564 50 559 50 561 25 -1 May 13 570 571 568 56875 -.75 Jul 13 575 576 50 572 50 574 75 -.75 Mons sales 352209 Mon's open mt 1 3 1 8773, off 40 How to Contact Business ORGANIC Continued from Page 5B bought Small rianet because organic foods represent the fastest-growing segment of an otherwise static retail food industry. "We must realize that not everybody is comfortable shopping at farmers markets or food coops," Bennett said. "Many people still prefer to shop in supermarkets." Small Planet, which Bennett said is General Mills' smallest division, sells to various retail out lets, including Hy-Vee, Costco and Whole Foods. "We've been in this business continuously since 1972, and there's more competition in organic agriculture today than ever, even with General Mills in our ownership," Bennett said. While Bennett celebrated the fact that "organics are becoming more accessible to the mainstream" in supermarkets, not every organic grower will be comfortable fitting into corporate agriculture. "I understand that some organic growers want to stay small and independent, and there are numerous examples of such growers who make a good living and support their families by selling to local markets," Bennett said. Iowa's 520 certified organic farms (out of about 92,000 farm operations) make it the nation's ninth-largest organic farm state. About 106,000 of Iowa's 24 million cultivated acres are dedicated to organic production, according to the Iowa Department of Agriculture. John Lawrence of ISU Extension said: "There is a growing desire by consumers for more choices in food." pj PAUL REVERE'S p55 """ Peggy's Tavern is a Drake University icon and an annual must-stop for alums when the Drake Relays are in session. It sits between a Paul Revere's Pizza and a former pharmacy, joanne boeckmawthe register PEGGY'S Continued from Page 5B when word went out that another long-time Drake area bar, the University Library Cafe was for sale. Even before Peggy's was listed last week, he had about 10 calls from potential buyers. Peggy's is something of a right-of-passage for Drake students and a magnet for alums who return for the annual Drake Relays. Tents are set up behind the bar and they are always f illed during the Relays. Beer cups with the year's slogan have become collectibles. "Almost every student who has come through (Drake) has had an interaction with Peggy's," said Andrea Chase, 28, of Johnston. "It really is an icon, and I almost gasped when I heard it's for sale, just wondering if it will stay the same." Chase earned both undergraduate and graduate degrees from Drake, attending most years from fall 2001 through 2009. Peggy's is a must-stop during the Drake Relays, she said. "The Relays are like Drake's version of homecoming. The tents in the back parking lot over flow with all generations of alumni, their spouses and their children," Chase said. "Visiting Peggy's is like reminding them of what it used to be like when attending Drake." It has such a following that through the years hundreds of Drake University alumni across the country have thrown "Peggy's parties." Graziano and co-owner and manager Bob LaFratte increased the bar's footprint by bumping out a party room into the former Dick Pharmacy space to the west. The bar's interior features a large mural painted on cloth and installed on the wall in 1954 by local artist Jack Mastrofski. It depicts a German scene based on Goethe's "Faustand includes a quote from the play about drinking wine and being careful not to spill it. The mural was restored in 2009, and a second mural by Mastrofski was added in 1990. Most quirky is the ceiling, papered with 7,000 one-dollar bills. Many of them are signed by Peggy's patrons, but some include numbers or letters only. "We have a little book that corresponds to those," Graziano said. "We can look up the numbers and letters and find the name in the book." He's collected another $200 or $300 worth of one-dollar bills signed by Drake athletes, including golfer Zach Johnson, basketball player and local celebrity Dolph Pulliam and others. Graziano said he planned to paper the party room with them. Peggy's roots go back to the mid-1930s, when the story goes that a woman named Peggy opened a cafe in what had been a butcher shop. She married Harlan "Boots" Fleming, who converted the cafe to a bar after her death. Fleming died in 1972. A case by the entrance especially built by LaFratte features a stein that was donated to Peggy's by Fleming's family. Other steins also line shelves behind the bar. A handful of owners since Fleming have maintained the character of the place. About all that's changed has been the addition of hard liquor to what had been a choice of beer only, and the music, which has become more current. Graziano owned the bar from 1998 to 2000 then sold it to Andy White, who sold it back to Graziano and LaFratte in 2009. Jay Wangerin closed Dick Pharmacy at the end of 2007 and put the building up for sale in 2008. Graziano said he bought it so it wouldn't be torn down. JOBS Continued from Page 5B of the national trend. Some possible causes for the drop: More workers are discouraged and have stopped looking for jobs, which means they are not counted as unemployed. Even though 4,100 fewer Iowans were unemployed in October, dropping to 98,900, that figure is significantly smaller than the 15,300 Iowans who have dropped out of the work force over the past year, said Noga O'Connor, a research associate from Iowa Policy Project, a nonprofit Iowa City research group. "A much larger portion of the working-age population has given up on the labor market altogether," she said. Combined with the increase in jobs, it could mean "fewer Iowans are working more jobs," said David Swenson, an Iowa State University economist. "They're part time and under-employed." It also could mean workers "As the national economy gets better, we'll start getting better, start hiring." DAVID SWENSON Iowa State University economist are beginning to find jobs outside Iowa. Kerry Koonce, an agency spokeswoman, said data the agency tracks show a recent loss of working-age population, but details were unavailable Tuesday. Iowa added about 120,000 residents in 2010, a 4.1 percent gain over 2000. Census data also show national worker mobility is at its lowest level in more than six decades, hampered by a depressed housing market. But Iowa struggles less with foreclosure, homes that are underwater, and "other kinds of economic bondage" that keep workers stuck in one place, Swenson said. "Iowans may have a modicum of mobility that workers in other states do not." Swenson doubts, however, Iowa will relive the tremendous loss of workers that occurred following the 1980s farm crisis. The state's population dropped 4.7 percent in 1990 over 1980. In this recession, Iowa's economic growth is more closely linked with the national recovery, he said. "Iowa's economy depends on the nation doing well, what we make, what we sell," he said. "As the national economy gets better, we'll start getting better, start hiring." The state said building and manufacturing added 1,300 jobs each in October over September, while education and health services added 1,100 jobs. Other services added 900 jobs, with much of the increase reflected in membership associations and organizations, the state said. O'Connor called government job cuts "a largely self-inflicted wound." "When we lose 3,000 jobs over the year, we also lose services and we lose the contribution of those government employees to their local economy," she said. "That affects other job sectors as well." Lynn Hicks executive business editor. (515) 284 8290 or lhicksJnreg com Contact a reporter f515) 284 8065 General email bustnessOdmreg com RETIRE Continued from Page 5B age, as much as when they're financially able." Fewer people depend on traditional pensions, and younger workers are less likely to be confident in the Social Security system, the survey showed. Workers are putting faith in their 401(k)s and other retirement savings plans. Like the Principal Financial Group, Wells Fargo is one of the major 401(k) managers in the U.S. The survey showed that middle-class Americans under the age of 50 are twice as likely as those older than 50 to accept cuts to future Social Security and Medicare benefits. The least likely to accept those cuts are those between the ages of 60 and 75, with only 19 percent saying they would tolerate cuts to entitle ment benefits. A quarter of those surveyed said they will "need to work until at least age 80" before they can afford to retire, and in general, people want help managing their financial futures. Seventy-nine percent of respondents said employers should provide personal advice on their 401(k) plans. "A lot of people have access to a 40Kk)," Stromley said. "A lot of employees are asking for help 'What should I do?' "

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