It wasn’t a record year, but 2013 was the third best year of all time for home sales in Benton and Washington counties, according to Paul Bynum, economist with MountData.com.

“Real estate in 2013 was amazing. It never slowed down for me,” said Nicky Dou, an executive broker for Keller Williams in Rogers.

Dou said she and husband Jerry, also a broker, had to hire a licensed assistant in July to keep up with the hectic demand.

“It was a great decision. Between Jerry and I we closed just under $28 million in sales volume last year,” Nicky Dou said. 

This week she listed three more properties and said 2014 also has gotten off to a great start.

Bynum reports that agents like Dou cumulatively sold more than 7,200 homes in 2013 across the two local counties. Unit sales rose 17.9% from 2012 as agents sold 1,100 more homes than in prior year. Total sales volume topped $1.315 billion in 2013, the best year since 2006. Bynum said total sales volume rose 25% from the prior year, and lagged the record set in 2005 by 15%.

Two of the largest firms in Northwest Arkansas, Coldwell Bankers and Crye-Leike Realty each reported stellar returns in 2013.

“Overall for the year, Crye-Leike NWA sales were up 15.5 % to $385 million with 2,535 Units (properties sold),” said CEO Harold Crye.

George Faucette, CEO of the local Coldwell Banker franchise, said his firm posted an 18.7% increase in sales volume between 2012 and 2013. He said unit sales rose 16.% year-over-year. Faucette said the market has come along way back since 2011. When comparing against that year, Coldwell Bankers’ sales volume is up 57.7%, while units rose 42.3%.
 
When home sales are hot, the number players in the market will grow and that is the case in Northwest Arkansas, according to Bynum.

At the end of 2013, Bynum reports there 306 companies that were members of the Multiple Listing Service that recorded sales in Northwest Arkansas. Eight new companies have signed on since 2012 and there were some other agency consolidations that occurred in the market as well.

At the end of 2013, there were 1,700 agents who made at least one sale during the year, up from 1,596 at the end of 2012. Bynum said the 2013 median sales volume per agent was $1.135 million, up from $1.016 million in 2012.

2014 PREDICTIONS
Bynum said the metrics are in place for a strong 2014 as long as job numbers remain steady across the region.

Faucette predicts his firm to grow by roughly 12% in 2014 with actual sales dollar volume significantly surpassing those in 2013. This is an aggressive forecast given that as the base gets larger, percentages will tend to decrease.

Benton County is knocking on the $1 billion door for annual sales volume. Sales in the county during 2013 totaled $845.46 million in 2013, versus $692.02 million in 2012, or up 22.17%.

The hefty gain was not a function of rising home prices, because the median price in the county was 3.44% throughout last year. The trump card in Benton County is robust demand, as unit sales rose 18.6% to 4,571 homes.

“I believe it is not only possible but probable that Benton County will exceed $1 billion in sales volume in 2014 for all property types; but it will probably be 2015 or possibly 2016 before that level is achieved in residential sales only,” Faucette said.

He said Washington County's growth will be equally impressive in 2014, maybe even surpassing Benton County in its percentage increases.

Last year agents in Washington County sold 2,659 homes with a a total value of $470.538 million. Unit sales rose 16.87% year-over-year, while sale volume increased 24%, according to Bynum.

Year end figures for Fort Smith area home sales posted mixed results with Crawford County continuing a slide in home sales while Sebastian County posted double-digit growth during 2013.

Starting with the month of December, Crawford County posted a decline of 6.24% in home sales value, with only 44 sales in the last month of 2013 worth $4.375 million versus 36 homes sold in December 2012 worth $4.666 million.

It was the exact opposite story in Sebastian County, which saw an increase of 16.22% in December 2013 with 94 homes sold at a value of $13.457 million versus 87 homes sold in December 2012 with a value of $11.578 million.

Looking at all of 2013, 515 homes were sold at a value of $57.039 million in Crawford County. The number represents a drop of 5.22% from 2012's total of $60.179 million.

Sebastian County saw 1,220 homes sold during 2013 with a total value of $168.405 million, a 10.06% increase from 2012's total of 1,114 homes sold for a value of $153.012 million.

Linda Spradlin, principal broker at Assurance Realty in Fort Smith, said Sebastian County's rise during the last year could be tied to the improving economy in the region.

"Well, Sebastian County has brought in a few more businesses than Crawford County," she said. "With our hospitals, HMA (Health Management Associates) and Mercy growing, they have produced more buyers."

She also pointed to an expansion of jobs at Baldor as being a sign of a strengthening economy, resulting in customers having higher discretionary income to spend on items such as real estate.

"Even though they (Baldor) brought in some (new) people, they also (have current staff) getting better jobs, so they can move up. So our sales may be up 10%, but it may not really identify that we really have that many more people moving into the area," Spradlin said. "It could mean that we just have existing people who are getting better, higher paying jobs and they are able to improve their living standard."

As for Crawford County's downturn, Spradlin said while it was hard to determine the exact cause of the 5.22% decline in home sales, uncertainty about the future of the USDA's rural development loan program had been hanging over the county for much of the latter months of 2013, affecting sales in the county's largest city of Van Buren, which is approaching the maximum population for participation in the program. Proposals to include an increase in population from 25,000 to 35,000 for eligible communities has not yet been able to pass the U.S. Congress as part of a larger Farm Bill.

"I don't know where we stand (as far as the status of rural development loans), but that definitely hurts Crawford County. That hurt us a bit, too. Not in Fort Smith, but in the outlying areas like Greenwood and Hackett."

Spradlin said while Sebastian County's numbers looked strong for last year, one area that continued to be a drag on the market in 2013 were foreclosures. Even though the number of foreclosures in the Fort Smith market declined last year, she said it likely still effected sale prices for new and existing homes.

"That would have a direct impact on those home sales. You know, appraisers — even though they say they don't use foreclosures heavily — it has to effect their judgment at some point if they put that in as a comparable."

The median sale price in Sebastian County declined 1.71% from 2012 to 2013, with 2013 posting an MSP of only $115,000 versus 2012's MSP of $117,000. Crawford County's MSP fared worse, falling 6.67% from $112,500 in 2012 to $105,000 in 2013.

As for what 2014 holds, Spradlin said buyers and sellers should expect a solid year should Fort Smith continue its trend of job growth and falling unemployment.

"It's sort of like with the whole economy thing," she said. "We were slow to get into the recession and we'll be slow to come out. ... I think the future is going to be dictated, pretty much, by our past. It means slow, moderate growth."

Home Sales Data
(January - December)
• Crawford County
Unit Sales
2013: 515
2012: 502

Total Sales Volume
2013: $57.040 million
2012: $60.179 million

Median Sales Price
2013: $105,000
2012: $112,500

• Sebastian County
Unit Sales
2013: 1,220
2012: 1,114

Total Sales Volume
2013: $168.405 million
2012: $153.012 million

Media Sales Price
2013: $115,000
2012: $117,000

A federal grant awarded to NorthWest Arkansas Community College will fund courses designed to empower the unemployed by providing technology courses in fields in high demand by area industries and employers.
 
The spring 2014 schedule includes courses in computer service and repair, network and mobile infrastructure, and disaster recovery. All of the courses are designed to teach the students the basic skills and applications needed to pass industry standard certification.
 
“The ARK grant is designed to help the unemployed by giving them an education in a highly desirable field,” said ARK Grant Director Brad Henderson. “Eligible students successfully completing these free courses position themselves to earn certification in a variety of areas, like Cisco Networking and A+.”
 
To meet eligibility requirements for the free courses, students must be long-term unemployed (more than six months), recently unemployed, or underemployed. 

Residency in Northwest Arkansas, Southwest Missouri, and Northeast Oklahoma is another requirement.  All applications are screened and reviewed prior to admission.
 
“I am really hoping we get more students from Missouri and Oklahoma this semester,” said Henderson. “The grant specifically targets residents in McDonald and Adair counties (Missouri and Oklahoma respectively), as well as the entire Northwest Arkansas region, including Carroll County.”
 
Now in its third year, the ARK grant, funded through the United States Department of Labor, has already helped more than 275 area residents, and helps reaffirm NorthWest Arkansas Community College as the area’s leader in workforce development.
 
“It has been a tremendous success for the college.  Not only are the courses free, but so are the books required for each class. I think it is a very realistic goal that we will exceed 500 students heading into the summer,” said Henderson.


The college received the $1 million grant in 2011, and it is scheduled to end in October 2015. Courses are taught in the College’s Shewmaker Center for Workforce Technologies and in the institution’s Shewmaker Center for Global Business Development. 


A complete schedule and more information about the grant is available at online.
 

Bank of the Ozarks Inc. reported net income for the fourth quarter of 2013 was $24.4 million, an 18.1% increase from $20.7 million for the fourth quarter of 2012.

For the full year of 2013, net income totaled $87.1 million, a 13.1% increase from $77.0 million for the full year of 2012.

The Little Rock-based bank’s results for 2013 included the July 31, 2013 acquisition of The First National Bank of Shelby in Shelby, North Carolina.

“We are pleased to report our excellent fourth quarter results. Highlights of the quarter included stellar asset quality and another quarter of excellent loan and lease growth,” said CEO George Gleason. “Our capabilities to generate loan and lease growth have been clearly evident this year. Our balance of loans and leases outstanding, excluding covered loans and purchased non-covered loans, increased $110 million in the quarter just ended and $517 million for the full year of 2013. Our unfunded balance of closed loans increased $78 million during the fourth quarter, growing to $1.21 billion at December 31, 2013 compared to $1.13 billion at September 30, 2013 and $769 million at December 31, 2012.”

Additional financial highlights of the quarter included:
• Deposits were $3.72 billion at Dec. 31, 2013, a 19.9% increase compared to $3.10 billion at Dec. 31, 2012.

• Total assets were $4.79 billion at Dec. 31, 2013, an 18.5% increase compared to $4.04 billion at Dec. 31, 2012.

• Net interest income for the fourth quarter of 2013 was $55.3 million, an increase of 26.3% from $43.8 million for the fourth quarter of 2012.

• Non-interest income for the fourth quarter of 2013 was $18.6 million, a 1.4% decrease from $18.8 million for the fourth quarter of 2012.

• Loans and leases, excluding loans covered by FDIC loss share agreements (“covered loans”) and purchased loans not covered by loss share (“purchased non-covered loans”), were $2.63 billion at Dec. 31, 2013, a 24.4% increase from $2.12 billion at Dec. 31, 2012.

• Including covered loans and purchased non-covered loans, total loans and leases were $3.36 billion at Dec. 31, 2013, a 21.9% increase from $2.75 billion at Dec. 31, 2012.

Moving a house from New Jersey to Bentonville, area branch bank closures and a California egg-production law are part of the Northwest Arkansas Friday Wire for Jan. 17.

NOTES & ANALYSIS
• The Wright move
The folks at Crystal Bridges Museum of American Art have cranked out pleasant surprises on a regular basis from the day the museum was first announced. But deconstructing and moving a Frank Lloyd Wright-designed home almost 1,100 miles from New Jersey to the museum grounds in Bentonville will be hard to top.

The home, built in 1954 and known as the Bachman Wilson House, will be placed near the museum along its 3.5 miles of trails and 120 acres, with views overlooking the native woodlands and the Crystal Spring – the natural spring from which the museum takes its name. Plans are to begin site prep in the spring and have the house move completed by early 2015.

One of these days, the folks at Crystal Bridges are going to mess up and create a world-class museum that draws millions of visitors. Oh, wait ...

• Gay-marriage ban
A ruling this by a Federal Judge in Oklahoma that overturned a voter-approved amendment banning same-sex marriage generated a lot of national attention. U.S. Senior District Judge Terence Kern, based in Tulsa, said the gay marriage ban approved by voters in 2004 violated the U.S. Constitution's 14th Amendment under the equal protection clause.

Don’t be surprised if Arkansas’ voter-approved ban on same-sex marriage experiences the same fate. This highly divisive issue will likely be a talking point at all ballot levels in the 2014 election cycle, even though the U.S. Supreme Court may have the final say on the issue.

ICYMI
Following are a few stories posted this week on The City Wire that we hope you didn’t miss. But in case you missed it ...

• More labor problems for Wal-Mart
The general counsel for the National Labor Relations Board filed a complaint Wednesday (Jan. 15) against Wal-Mart Stores alleging that more than 60 store supervisors and one corporate officer violated the rights of employees who participated in Black Friday (Nov. 22, 2012) protests at Walmart stores.

• Political money haul
Former U.S. Rep. Mike Ross' campaign is starting to sound like a broken record after the presumptive Democratic nominee for governor announced fundraising figures for the fourth quarter of 2013 and a record-breaking 2013.

• Small product, big growth
NanoMech announced it has purchased its existing factory and will build an adjoining  25,000 square-foot facility in east Springdale, tripling its size and making room for more than two dozen new jobs by late summer.

NUMBERS ON THE WIRE
$445,000: The amount of money raised by the Asa Hutchinson for Governor campaign during the last three months of 2013, the campaign's largest fundraising haul to date in a quarter typically marking some of the lowest giving during an election cycle.

12: Number of bank branches to be closed in Northwest Arkansas following the Simmons First acquisition of Metropolitan National Bank.

$240,000: Amount of money that Minneapolis-based General Mills doled out to help six Northwest Arkansas charities fund nutrition and wellness programs for 2014.

OUTSIDE THE WIRE
• Emergency room emergency
People seeking urgent medical could face longer wait times and other challenges as demand increases under Obamacare, U.S. emergency doctors said in a report on Thursday that gives the nation's emergency infrastructure a near failing grade. States with the best emergency care include Massachusetts, Maine, Nebraska and Colorado, while Kentucky, Montana, New Mexico and Arkansas rounded out the bottom, just above Wyoming.

• No love for Petrino
Not only has Petrino managed to land another big job, he’s going to be coaching at the school where he first built his reputation for selfishness, dishonesty and opportunism.

• Chicken laws and the commerce clause
The country is awash in legislative efforts to increase regulation of agriculture, but only California has had the chutzpah to impose the preferences of that state’s voters on the rest of the country.

WORD ON THE WIRE
"This skill set is in demand not just n the tech sector, but in banking, entertainment, medicine and virtually every area. Whether our children want to be farmers, doctors, teachers or entrepreneurs, they will all benefit from the creativity and problem-solving skills that are the essence of creating computer software."
– statement from GOP gubernatorial candidate Asa Hutchinson on his plan to promote computer science education

“It’s probably my last Coon Supper. I started here 32 years ago as their state senator, running for their state senator. And this is the place that really kicked off my campaign. Even though I was from Searcy, Gillett may have had more to do with starting my first political campaign than any place in Arkansas.”
– Arkansas Gov. Mike Beebe during a speech at the 71st annual Gillett Coon Supper

”This advanced facility will allow us to accelerate the development and commercialization of innovative products that people have only dreamed of before. Aggressive demand for our technology suggests the need for rapid scale-up production to meet government and private sector orders for our breakthrough products.”
– Dr. Ajay Malshe, NanoMech founder and chief technology officer, in announcing an expansion of NanoMech’s Springdale operation

A legal turn for same-sex marriage, Coon Supper politics, shuffling money for a sports complex and the push for a third high school in Fort Smith are part of the Jan. 17 Friday Wire for the Fort Smith region.

NOTES & ANALYSIS
• Gay-marriage ban
A ruling this by a Federal Judge in Oklahoma that overturned a voter-approved amendment banning same-sex marriage generated a lot of national attention. U.S. Senior District Judge Terence Kern, based in Tulsa, said the gay marriage ban approved by voters in 2004 violated the U.S. Constitution's 14th Amendment under the equal protection clause.

Don’t be surprised if Arkansas’ voter-approved ban on same-sex marriage experiences the same fate. This highly divisive issue will likely be a talking point at all ballot levels in the 2014 election cycle, even though the U.S. Supreme Court may have the final say on the issue.

• The Wright move
The folks at Crystal Bridges Museum of American Art have cranked out pleasant surprises on a regular basis from the day the museum was first announced. But deconstructing and moving a Frank Lloyd Wright-designed home almost 1,100 miles from New Jersey to the museum grounds in Bentonville will be hard to top.

The home, built in 1954 and known as the Bachman Wilson House, will be placed near the museum along its 3.5 miles of trails and 120 acres, with views overlooking the native woodlands and the Crystal Spring – the natural spring from which the museum takes its name. Plans are to begin site prep in the spring and have the house move completed by early 2015.

One of these days, the folks at Crystal Bridges are going to mess up and create a world-class museum that draws millions of visitors. Oh, wait ...

ICYMI
Following are a few stories posted this week on The City Wire that we hope you didn’t miss. But in case you missed it ...

• Sports complex money
The on again, off again River Valley Sports Complex project appears to be back on again following a study session of the Fort Smith Board of Directors on Tuesday (Jan. 14). But how the project will be constructed may change following disagreements during Tuesday's study session about the use of engineering firms for the project.

• An early primary fight
The region appears to have a major primary shaping up as Rep. Terry Rice, R-Waldron, announced Tuesday (Jan. 14) that he would challenge Sen. Bruce Holland, R-Greenwood, for the District 9 Senate seat.

• Political money haul
Former U.S. Rep. Mike Ross' campaign is starting to sound like a broken record after the presumptive Democratic nominee for governor announced fundraising figures for the fourth quarter of 2013 and a record-breaking 2013.

NUMBERS ON THE WIRE
$65 million: Estimated cost to construct a third high school in Fort Smith. According to Superintendent Dr. Benny Gooden, the need for a third high school is real as enrollment has continued to increase across the district.

$445,000: The amount of money raised by the Asa Hutchinson for Governor campaign during the last three months of 2013, the campaign's largest fundraising haul to date in a quarter typically marking some of the lowest giving during an election cycle.

120: Number of megawatts of power saved by customers of Oklahoma Gas & Electric who use smart meters.

OUTSIDE THE WIRE
• Emergency room emergency
People seeking urgent medical could face longer wait times and other challenges as demand increases under Obamacare, U.S. emergency doctors said in a report on Thursday that gives the nation's emergency infrastructure a near failing grade. States with the best emergency care include Massachusetts, Maine, Nebraska and Colorado, while Kentucky, Montana, New Mexico and Arkansas rounded out the bottom, just above Wyoming.

• No love for Petrino
Not only has Petrino managed to land another big job, he’s going to be coaching at the school where he first built his reputation for selfishness, dishonesty and opportunism.

• Chicken laws and the commerce clause
The country is awash in legislative efforts to increase regulation of agriculture, but only California has had the chutzpah to impose the preferences of that state’s voters on the rest of the country.

WORD ON THE WIRE
"It is not in my nature to quit a job before it is completed. But given my medical problems and the toll that this job has taken over the past two years I owe this decision to my family."
– resignation statement from Del Gabbard, who resigned as Greenwood Mayor effective Jan. 13

"This skill set is in demand not just n the tech sector, but in banking, entertainment, medicine and virtually every area. Whether our children want to be farmers, doctors, teachers or entrepreneurs, they will all benefit from the creativity and problem-solving skills that are the essence of creating computer software."
– statement from GOP gubernatorial candidate Asa Hutchinson on his plan to promote computer science education

“It’s probably my last Coon Supper. I started here 32 years ago as their state senator, running for their state senator. And this is the place that really kicked off my campaign. Even though I was from Searcy, Gillett may have had more to do with starting my first political campaign than any place in Arkansas.”
– Arkansas Gov. Mike Beebe during a speech at the 71st annual Gillett Coon Supper

U.S. rail intermodal traffic declined 8.2% in the week ended Jan. 11 compared with the same week last year, the Association of American Railroads reported.

Railroads moved about 236,000 intermodal trailers and containers AAR said in its weekly reported.

Railroad carloads excluding intermodal declined 8.2% year-over-year to almost 257,000 units, AAR said in its weekly report.

Just two of 10 commodity groups showed increases — grain, which gained 10.1%, and petroleum products, up 5.5%.

Motor vehicles and parts had the biggest drop, posting a 22.5% decline.

Several local trucking company's like J.B. Hunt continue to expand their intermodal business units. Hunt is the first to report earnings on Jan. 23.

The preliminary index for consumer sentiment in dipped to 80.4 in January, from 82.5 in December, according to the Thomson/Reuters/University of Michigan report released Friday, Jan. 17. The final survey numbers will be updated on Jan. 31.

Preliminary sentiment fell short of economist expectations of 83.5, according to the Bloomberg survey. The month-over-month decline was linked to disappointing job growth in December.

Rich Yamerone, chief economist with Bloomberg L.P. , said there aren’t enough full-time jobs with benefits being creating to push the economy forward. He said employers large and small are stifled by the healthcare mandate, reducing positions and slashing hours as needed to dodge higher benefit costs.

He said there are many folks working two or more jobs to make ends meet. They are taking lower-wage retail and food service positions to subsidize the wages they could be losing in what used to be a 40-to 45-hour per-week job.

Michael Moran, chief economist at Daiwa Capital Markets America Inc., projected a reading of 81. He told Bloomberg that he expects to see some cooling off in spending in the first quarter.

Tyson Foods, in the midst of shifting some of its processed meat operations in Iowa, said it will lay off about 60 workers from its deli meat plant in Cherokee, Iowa, the company firmed in an email statement on Friday, Jan. 17. The staff reduction is effective immediately.


“As part of our ongoing effort to operate efficiently, we’ve shifted some of the production at Cherokee to other facilities... We don’t take this decision lightly and will be working with the affected employees to help them identify other job opportunities within our company – perhaps at Dakota City or Storm Lake,” according to Tyson spokesman Dan Fogelman.

Tyson said the affected workers could be recalled in business conditions improve or other positions open up through normal attrition.

Pork packer margins declined to $1.77 per head, down from $14.74 a month ago, according to the Sterling Pork Profit Tracker. Losses were wider from farrow to finish at an average $7.22 loss per head.

Tyson CEO Donnie Smith said Thursday, (Jan. 16) pork and beef prices are expected to rise higher in 2014, and that will likely mean consumers eat more chicken.

Tyson Foods will report quarterly earnings on Jan. 31.

Home builders and others employed in the local construction industry can easily sum up 2013 with just two words — steady work.

Bentonville, Fayetteville, Springdale and Rogers issued new commercial and new residential permits valued at around $523 million in 2013. While total permit values dipped 15% from the $605 million recorded in 2012, the number of new single family dwellings rose during the year-over-year period.

In 2012, the total permits were buoyed higher because of $133.9 million in multifamily construction projects in Fayetteville. This segment activity declined to $25.13 million in 2013.

BUILDING PERMIT TALLY
Bentonville
2013: $176.78 million
2012: $171.48 million
2011: $131.10 million

Fayetteville
2013: $157.85 million
2012: $286.13 million
2011: $106.98 million

Rogers
2013: $109.61 million
2012: $87.87 million
2011: $58.11 million

Springdale
2013: $78.81 million
2012: $60.16 million
2011: $51.64 million

HOMEBUILDING
The four largest cities in the region issued more than 1,460 permits for new houses or duplexes last year, valued at $395.212 million. Residential activity has rebounded during the past three years as the once-excess supply of new and unoccupied homes has largely been absorbed. New residential permit values rose 25% from 2012 and they doubled from 2011.

While inclement weather pushed December permits and housing starts lower, the total construction employment for this metro area has averaged 8,900 workers since June, adding back around 1,000 jobs from the 2012 annual average, according to the federal Bureau of Labor Statistics.

Brent Hanby, co-owner of Encore Flooring and Building Supplies in Springdale, said everyone he knows in construction-related businesses were busy throughout 2013.

“Builders, tradesmen like plumbers and roofers, movers, lenders and sales folks have all been making hay while the sun is shining because there has been steady demand for new houses, (with) money spent on homestead renovations and upgrades on rentals,” Hanby said.

He attributes the steady work to the stronger overall job numbers reported in Northwest Arkansas and said he feels an energy that has been rekindled after several years in deep recovery.

“Nearly every month we see landlord property owners replacing flooring and making other upgrades in their rentals. They tell me they are raising rents because of growing demand,” Hanby said.

He said his firm has expanded to 35 employees in the past two years, and posted a 30% annual compound growth rate in 2013.

Rausch Coleman, the only nationally ranked homebuilder in the region, reported total sales were up some 9% in 2013. CEO Fred Rausch said the firm saw steady demand for new homes in all of its markets with Northwest Arkansas continuing to pick up steam throughout 2013. The Fort Smith market showed positive gains as well, while Oklahoma City, Tulsa and Kansas City are also performing better year-over-year, according to Raucsh. He expects more of the same in 2014 with some 500 new units built and sold among all of its markets.

“We are not overly exuberant in any market but we are staying busy and growing at a sustainable rate,” Rausch said.

By mid 2014, he expects to have new homes going up in southeast Fayetteville on 75 lots the firm picked up from a bank.

“We also are trying to close on a partially developed subdivision in Centerton with 110 lots,” he said.

HIGHER PRICES, INVENTORIES
The median sales price of new construction homes increased in all of the major cities between 2012 and 2013. The median new home price across the two county-region was $225,000 last year. The median price rose 4.9% from 2012, according to Paul Bynum, economist with MountData.com.

Bynum reports 924 new homes sales were recorded in 2013 in the regional Multiple Listing Service. New home sales rose from 793 in the prior year. Nearly 75%, or 684, of those new home sales were in Benton County, compared to 552 recorded during 2012.
There were 240 new home sales recorded in Washington County in 2013, one less than recorded in the prior year.

Bynum reports 370 new homes listed for sale in the MLS at the end of 2013, up 28% from the year-ago period. The largest builders across the region list their new homes in the MLS, but these listings do not typically include custom-home builds.

COMMERCIAL PROJECTS
The commercial building sector continues to lag the residential recovery, but two of the region’s largest cities reported more commercial activity in 2013, compared to 2012.

Springdale posted the biggest year-over-year permit gains with $28.97 million in new projects breaking ground in 2013. This included the $15.43 million Wal-Mart Supercenter under construction in west Springdale.

Rogers also posted an increase in commercial building with permit values rising 8.43% from the 2012 year. Several new restaurants and other retail venues were approved by the city during 2013 and the construction also began on the multimillion dollar Arkansas Music Pavilion near Pinnacle Promenade.

COMMERCIAL PERMIT VALUES (2013 compared to 2012)
Springdale – $28.97 million, up $7.67 million
Rogers – $28.93 million, up from $26.68 million
Fayetteville – $45.42 million, down from $79.53 million
Bentonville – $26.874 million, down from 42.92 million

2014 COMMERCIAL OUTLOOK
“We expect growth to continue in Northwest Arkansas in 2014, as job expansion improves. The local commercial sector is lagging behind the recovery pace we have seen in residential construction over the past two years,” said Kathy Deck, director for the Center for Business and Economic Research at the University of Arkansas.

Deck said private investment and public infrastructure will likely continue to lead the way in commercial building projects in 2014.

McGraw Hill’s 2014 outlook, predicts that U.S. construction starts for 2014 will rise 9% to $555.3 billion.

“We see 2014 as another year of measured expansion for the construction industry,” said Robert Murray, McGraw Hill Construction’s vice president of Economic Affairs.  “Against the backdrop of elevated uncertainty and federal spending cutbacks, the construction industry should still benefit from several positive factors going into 2014.”

He said job growth, while sluggish, is still taking place. Interest rates remain very low by historical standards, and in the near term the Federal Reserve is likely to take the necessary steps to keep them low. Murray added that the improving fiscal posture of states and localities will help to offset some of the negative impact from decreased federal funding.

McGraw Hill estimates commercial building will increase 17%, a slightly faster pace than the 15% gain estimated for 2013.

Warehouses and hotels will continue to lead the way, while stores and office buildings pick up the pace. The positives for commercial building are improving market fundamentals and more bank lending for commercial development. Next year’s activity in dollar terms will still be 28% below the 2007 peak.

Institutional building is predicted to edge up 2%, turning the corner after five years of decline. For the educational building category, colleges are revisiting capital expansion plans, and passage of recent construction bond measures in several states should help K-12 construction projects. Healthcare construction is expected to remain flat, given continued emphasis on cost containment.

Public works construction is expected to drop 5% nationally. But locally, the widening of Interstate 540, the Don Tyson interchange and the Fayetteville Flyover are three large road projects underway in Benton and Washington counties.

“The 2014 picture bears some similarity to what’s taking place during 2013, with single family housing providing much of the upward push; multifamily housing showing a slower yet still healthy rate of growth after four years of expansion, and commercial building gradually ascending from low levels,” said Murray.

In a move to expand its prepared food sales, Tyson Foods Inc. recently acquired the assets of Bosco’s Pizza Co. of Warren, Mich., according to a press release issued Monday (Jan. 20) by the Springdale-based meat giant. Terms of the deal were not disclosed in the release.

“Bosco’s will be a good addition to our diversified portfolio of quality food offerings,” Donnie King, Tyson Foods’ president of prepared foods, customer and consumer solutions, said in the statement.

The pizza company employs about 150 workers. The Bosco Pizza brand will continue to operate as a unit under the Tyson’s Prepared Foods division. Craig Mulhinch, vice president of Bosco’s sales and marketing, and Paul Morgan, vice president of Bosco’s operations, will continue to manage the day-to-day operations.

Bosco’s Pizza, famous for “The Original Bosco Stick,” produces a variety of stuffed bread sticks and frozen pizzas for food service and retail customers throughout the Midwest and at some retailers nationwide.

“This is a great opportunity for the Bosco’s brand,” Mulhinch said. “We’ve put a lot of effort into creating high-quality products and Tyson Foods has recognized that. This deal will allow us to accelerate our growth while we continue to focus on the fundamentals of making excellent artisan bread products. We’re excited about joining the Tyson team.”

Entrepreneur Mark Artinian created Bosco’s as a carry-out pizzeria in 1988 before he began delivering frozen pizzas to area high schools. In 1995, the company started producing frozen stuffed crust pizza, which soon led to stuffed bread sticks, the company’s main product line today. Artinian will remain with the business in an advisory role.

Tyson Foods is the largest supplier of pepperoni and pizza toppings to the food service industry. Tyson Foods markets prepared foods products to retail grocers, food service distributors, restaurant operators and on-site food service establishments such as schools, universities, corporate cafeterias, hotel chains, healthcare facilities and the military.

In addition to “The Original Bosco Stick,” the Bosco’s Pizza plant produces partially baked frozen pizza made with traditional and whole grain crust, reduced-fat cheese Bosco Sticks, pepperoni Bosco Sticks and whole grain apple-filled Bosco Sticks in a variety of sizes and pack options. More information about Bosco’s Pizza is available at BoscosPizza.com.

Tyson is also rumored to be evaluating a $2 billion purchase of Michael Foods, a large distributor of eggs and dairy products, according to a report from Reuters on Jan. 16. Tyson did not confirm or deny the rumor when asked by The City Wire on Friday, Jan. 17.

CEO Donnie Smith has said in recent months the firm would be evaluating certain small potential acquisitions should the opportunities arise. Tyson is flush with cash and has announced strategic plans to grow its value-added sales and expand the products offered in its diverse prepared foods segment.

The Bosco deal fits those parameters, the Michael’s bid would be substantially larger.

Wal-Mart will proceed with its independent operations in India under the name “Wal-Mart India Private Lt’d”, according to Kevin Gardner, spokesman for the retail giant.

“Post the announcement in October 2013 by Walmart and Bharti Enterprises about running independent ventures, Walmart initiated the process of renaming the company in India. This is a process in any demerger and we have not set up a new company,” Gardner noted in an email on Monday (Jan. 20.)

He said earlier media reports out of India had been misleading as they wrongly indicated Wal-Mart would be proceeding with a new partner in a retail venture there.

The number of homes sold in Arkansas’ four largest metro areas totaled 20,644 during 2013, the first time since 2007 that the tally topped 20,000 and the first the value of the homes sold in the four markets topped $3 billion.

Also, December home sales in the four markets totaled 1,535, the first time since the bullish days of 2006 that the December total was above 1,500. Home sales during 2007 in the four markets totaled 22,007, with the value reaching $3.563 billion.

The City Wire’s Arkansas Home Sales Report captures home sales data in the state’s 14 most populated counties within the state’s four largest metro areas — Central Arkansas, Fort Smith area, Jonesboro/Northeast Arkansas and Northwest Arkansas. The report, which records closed sales, accounts for between 70% and 75% of total Arkansas home sales. This report counts the number of sales closed between January and December.

During 2013 the number of homes sold in the four markets totaled 20,644, up 12.93% compared to the 2012 period and up 15.56% compared to 2011, according to The City Wire’s Arkansas Home Sales Report. The report is sponsored by Fort Smith-based Weather Barr.

The value of homes sold in the four markets during 2013 was $3.439 billion, up 15.13% compared to the same period in 2012 and up more than 28% compared to the same period in 2011.

The average price of homes sold during 2013 in the four markets was $166,598, up 1.95% compared to the same period in 2012 and up 10.84% compared to the same period in 2011.

The average days on market during 2013 is 86.89, better than the 95.85 in 2012 and the 103.51 in 2011.

During 2013, the number of homes sold in central Arkansas are up 10.44%, up 12.89% in the Jonesboro area, up 17.98% in Northwest Arkansas, and up 7.36% in the Fort Smith area.

Benton County was the top Arkansas county for home sales during the year. The county, with a population of around 230,000, had 4,571 home sales in 2013. Pulaski County, the state’s largest with a population of around 390,000, posted 4,499 home sales during the year.

DECEMBER ACTIVITY
Combined home sales activity was up in all four markets during December, but the combined average price was down in all four markets. The average price per home in the four markets was $164,600, down 2.32% compared to December 2012. The average price was up 3.95% compared to December 2011.

There were 739 homes sold in central Arkansas, up 25.47% compared to December 2012, and up 13.87% compared to December 2011.

December home sales totaled 537 in Northwest Arkansas, up 20.13% compared to December 2012, and up 28.16% compared to December 2011.

Jonesboro area home sales totaled 121, up 2.54% compared to December 2012 and down 3.97% compared to December 2011.

In the Fort Smith area, home sales totaled 138, up 12.2% compared to December 2012, and up 8.66% compared to December 2011.

The value of the sales during December were up 17.4% in central Arkansas, up 22.5% in Northwest Arkansas, up 0.11% in the Jonesboro area, and up 9.77% in the Fort Smith region.

THE REGIONAL PICTURE: 2013
Central Arkansas — Home sales
2013: 9,709
2012: 8,791
2011: 8,553

Fort Smith area — Home sales
2013: 1,735
2012: 1,616
2011: 1,700

Jonesboro area — Home sales
2013: 1,970
2012: 1,745
2011: 1,755

Northwest Arkansas — Home sales
2013: 7,230
2012: 6,128
2011: 5,856

The top five counties in terms of 2013 home sales:
Benton — 4,571, up compared to 3,853 in 2012
Pulaski — 4,499, up compared to 4,151 in 2012
Washington — 2,659, up compared to 2,275 in 2012
Saline — 1,570, up compared to 1,384 in 2012
Craighead — 1,561, up compared to 1,355 in 2012

Link here for a PDF document of the December 2013 data.

MARKET IMPACTS
Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas, said 2013 is further evidence that real estate markets are continuing to recover.

“I think it's clear. If we look at the whole year, 2013's average sales price was as high as it has been in the state,” she said.

Deck said the number of homes sold in 2013 might not equal the peak years of 2005 through 2007, but the areas covered in The Arkansas Home Sales Report have returned to pre-recession levels. When higher sales numbers are combined with the highest average sales price in Arkansas, “it's hard to come up with a word other than recovery,” Deck said.

Deck said she expects sales to improve in 2014 – further evidence that the overall economy is improving. She said the nation is still slogging through a long recovery that has been fueled with a change in attitudes as much as anything else.

“Businesses and consumers have learned to deal with conditions as they are,” she said. “Some consumers – some businesses – are thriving even in economic times that aren't ideal.”

In that context, then, it's difficult to view real estate markets in Arkansas or the nation as one unit. Deck said real estate markets are tied to local areas, meaning sales are strong in some areas and not others. Deck said the economy in Jonesboro, for example, continued to expand even through the recession and the result has been a consistently solid real estate market at times when other parts of the state and nation were watching both sales and home values drop at alarming rates.

Arkansas Realtors Association President Bill Ladd, an agent with Moore & Co. Realtors in Russellville (tmoorerealtors.com), agreed with Deck that the old adage is true – real estate is local. He said the largest markets in Arkansas – primarily those covered in The Arkansas Home Sales Report – fared very well in 2013. In more rural areas of Arkansas, however, growth has come more slowly to markets.

REAL ESTATE HEADWINDS
Still, Ladd expects markets to improve throughout the state in 2014. He predicts the first quarter will be “soft and sluggish” due in large part to the Patient Protection and Affordable Care Act (Obamacare). Ladd said Realtors will watch the full impact of the Affordable Care Act. If early reports of increasing premiums prove to be common, that could have a negative impact on a housing market recovery as fewer people may qualify to purchase homes. By the time the spring rolls around, Ladd predicts markets will continue to expand as they grow accustomed to the Affordable Care Act and conditions should expand throughout the rest of the year.

Ladd and Deck agree that 2014 should be another year of moderate improvement in housing markets around the state. Deck said there are some headwinds facing the market such as increasing mortgage rates, but markets should come out ahead in spite of those.

Ladd believes what will improve the overall economy – and housing markets on the whole – is a falling unemployment rate. Real estate markets are sensitive to job growth and it remains to be seen if a substantial number of jobs are created in the Natural State this year.

Arkansas began the year with 1.247 million employed in January, with the number falling 1.74% to 1.226 million by November, according to the U.S. Bureau of Labor Statistics. The employment level in November was down more than 5.6% compared to a high of 1.299 million in March 2008.

A new events company in Fort Smith is already making a name for itself, landing one of the region's biggest corporate events after officially being open for business for a little over a month.

RSVP Event Rentals, a wholly owned subsidiary of Fort Smith-based FSM Redevelopment Partners, is the brain child of owner Lance Beaty. Beaty was the developer behind the former Phoenix Expo Center, which has since become the new Health Management Associates (HMA) regional service center.

Instead of simply shutting the doors to the Phoenix Expo Center following the lease to HMA, which Beaty said had been successful since its opening in 2009, he decided to take the facility's existing inventory of linens, furniture and dishes to create a new events rental business in the Fort Smith market. After adding "several hundreds of thousands of dollars of new (inventory)," Beaty opened a showroom and 40,000-square-foot storage facility on the north side of the former Phoenix Village Mall property that his company already owned. The business concept, he said, is essentially what he and his staff were already doing at the Phoenix Expo Center, just minus one component.

"We just looked to redeploy assets," Beaty said. "It's a reformatting of what we were doing with the real estate taken out."

Beaty said the business, with more than $1 million in inventory, is completely debt free and already had established relationships in the Fort Smith area that Manager Melissa Smith took with her from the Expo Center to RSVP Event Rentals.

"I had had contacts already, just from (customers) hearing that it was an idea that we were going to have," Smith said.

Of the four established event planning firms in the Fort Smith region, Smith said RSVP would be classified as among the larger firms simply based on the company's inventory and experience with Phoenix Expo Center.

Already, the company has contracted to manage Baldor's annual sales meeting in Fort Smith beginning Monday (Jan. 20). The event brings in more than 600 people from across the nation, requiring RSVP to serve up more than 1,800 meals per day for attendees.

"We're the only one who could do Baldor (at) three meals a day," Beaty said, adding that the Phoenix Expo Center's inventory coupled with the additional furniture and dinnerware made it possible for RSVP to get a jump in the Fort Smith events market.

Smith said a little more than a month into being fully operational, RSVP was doing about three or four events each week at an average price of $2,000 each. The events, she said, are a mixture of personal events and business events.

She said even with the economy still in the midst of recovery from a prolonged recession, clients have not held back when it comes to big events such as weddings, sweet 16 parties, quinceañeras and corporate functions. According to Smith, locals are ready to invest in moments to remember.

"We are (finding people wanting to invest in big events), so far. A lot of them are (investing), especially with weddings. 'It's my daughter's...it's her only wedding.' So they're still ready to put that money out there. It's a one-time event."

To serve a growing clientele that may just now be hearing about RSVP Event Rentals through radio advertising or on Wedding Wire, the company has a fully outfitted show room that highlights various dining and event options. Smith said once a decision is made by a client to go with RSVP, all that is required to reserve the company's services is a 25% deposit.

And as for getting the company's services reserved before someone else does, Beaty said that would likely not be a problem.

"We have enough (inventory) to do five separate events, serving 2,200 people at once," he said.

As for what the future holds for RSVP, Smith would like to see the company's bookings more than double from three to four events each week to 10 events per week, something she and Beaty expect to happen as they reach not only past clients from Phoenix Expo Center but also new clients hearing about the events rental company for the first time.

Beaty, whose company is also considering an investment to acquire and renovate Fianna Hills Country Club, said once RSVP completes its first year in business, he's expecting about $1.3 million in sales.

And for anyone who may doubt those sales expectations or his future success, all one has to do it look at the doubters who did not think his idea for an events center inside the former Phoenix Village Mall would be the success it became, leading to RSVP's debt-free venture.

"I guess that just comes with a little bit of foresight and a little bit of luck and being able to identify holes in the market. It was clearly an area that was underserved. We feel like that this continued market is underserved and the event rental business in this market, as well as we feel like the redevelopment of that Fianna Hills Country Club, is another opportunity."

Health and wellness is big business for Wal-Mart’s Stores Inc. garnering roughly $2.495 billion in sales — roughly 11% of the retailer’s total U.S. sales in fiscal 2013. Sales grew 3.9% from the prior year but the retailer is barely scratching the surface of opportunities as there are major shifts underway in this segment.

Dr. John Agwunobi, president of health and wellness for Wal-Mart Stores, said there are ample opportunities to grow market share. He outlined a few areas where Wal-Mart was focusing on health and wellness growth: healthcare services such as immunizations provided by pharmacists in-store; product innovation, branded and private label, and key focus on the boomer demographic.

HEALTHCARE SERVICES
“We have 100,000 pharmacists scattered about this country and a vast supply chain network that we must fully leverage. Right now in 1,400 of our stores, we have pharmacists giving immunizations and other inoculations, but we will make these services available in all of our stores with pharmacies sometime this year,” he said.

Agwunobi spoke to roughly 800 business professionals in Rogers on Tuesday morning (Jan. 21), as the keynote speaker for the WalStreet Breakfast, a program offered by the Bentonville Chamber of Commerce.

He admitted that Wal-Mart has taken a back seat to other drug store chains when it comes to in-store clinics.

“We have 140 or so in-store clinics at this time and hope to add more in the future. We continue to test and study this option, but we haven’t found the answer yet,” Agwunobi said.

He added that while a couple of drug store chains — Walgreen and CVS Caremark — have actively opened in-store clinics in the past two years, he isn’t sure the ventures are profitable.

According to the Convenient Care Association, there are more than 1,400 health clinics inside retail chain stores – twice the number that there were in 2007. CVS Caremark leads the pack with 650 MinuteClinics in 25 states and Washington, D.C. Although Walgreen is second to CVS in clinic numbers, with Take Care clinics in 372 stores, it anticipates major growth in the next two years with a growth strategy that includes forming accountable care organizations (ACOs) and providing diagnosis and treatment services.

Walgreen partnered in 2013 with Florida-based Diagnostic Clinic, New Jersey-based Advocare, and Texas-based Scott & White Healthcare to form ACOs in which the retailer will benefit from gain sharing when the ACOs succeed in keeping patient healthy at a low cost.

Agwunobi said there continues to be massive consolidation in the drug store channel as the larger players seek to expand their footprints, aligning with insurers and other partners.

“This is a fundamental vertical shift in this channel. The worst thing we can do is sit by and watch. No one knows exactly how this end up but it’s important that we are part of the dialog as we keep our eye on the beacon — for Wal-Mart, that is the customer,” Agwunobi said.

While the Affordable Care Act intent was good, Agwunobi fears it will end up costing suppliers and consumers more money once the mandates kick in. He said those are two areas that squeeze the retailer from both ends.

“As consumers have higher costs associated with health care, that is less money they can spend on other things,” he added.

BOOMER IMPACT
One area Agwunobi said there is enormous potential is in over-the-counter (OTC) wellness and nutrition innovation. 

“Boomers are here. Their consumption is dramatically impacting our business in the areas of eye ware, gastric meds and Medicare Part B participation,” he said.

At one end of the boomer spectrum, Agwunobi described millions of older consumers living active lifestyles, engaged in fitness, yoga, consuming vitamins and other healthy nutrition products. One area where the retailer has seen big gains is in the private label eye wear, such as the Equate contact lenses. Agwunobi said it comes down to price and quality, the two areas that Wal-Mart won’t compromise.

“There is room for product innovation across multiple categories in both private label and branded, from fitness apparel and gear to food supplements,” he said.

On the spectrum’s other end he said the retailer is seeing older seniors and demand growth in diabetes and incontinence products as well as durable equipment sales. He said Wal-Mart seeks keep the cost of living down for seniors requiring more health care services and will rely heavily on its suppliers to bring ideas and solutions to the table.

Arvest Bank announced Susana Perez has been promoted to personal banker in Springdale. She is relocating from 415 Emma Avenue to the branch located at the corner of East Robinson Avenue and Butterfield Coach Road and reports to Christy Queary, consumer loan manager in Springdale.

Perez has worked for Arvest for more than eight years; she started as a teller in 2005. During her career at Arvest she has worked as a consumer loan assistant, mortgage loan assistant and most recently as a financial service representative in downtown Springdale.  

 “Susana is a highly capable and intelligent member of our team at Arvest,” said Queary. “Her conscientious approach to her work and the rapport she develops with her customers demonstrate the qualities that we always strive to provide in our bank.”
 
A native of Watonga, Okla., Perez’s family moved to Rogers in 1995 and she graduated from Rogers High School in 2003. She and her husband, Jose Atilano, have a daughter, Janell.

Retailers like Wal-Mart Stores, Dollar General and Best Buy ordered a lot of products ahead of the holiday season, but reports of soft post-holiday sales and excess discounted inventory could result in suppliers to the big retailers facing more chargebacks and deductions in 2014.

Boyd Evert, CEO of Harvest Revenue Group in Bentonville, said post-payment audit claims tend to increase when items are marked down for quick sale. He said suppliers have to be vigilant in tracking post holiday mark downs at the store levels, documenting what the product supplier will and will not agree to.

“The documentation is important because a year from now, a third-party auditor will likely be scrutinizing payment invoices that will come in short, after the discounts have been applied at the store level. A chargeback or post-payment deduction could occur and at that point the supplier will have to prove it didn’t authorize the lower price to be able to refute the chargeback,” Evert said.

Jami Dennis, a supplier consultant, said by sheer volume, suppliers are more at risk when shipping modular sets – i.e., large amount of product in a display area – at peak seasons as there are more cases and more room for error.
 
A replenishment specialist who works in the region, agreed that modular sets (the physical space inside a Walmart Store) involving price markdowns can trigger chargebacks, and require extensive due diligence from the supplier to ensure they aren’t shortchanged. He said it is important to understand what items are being deleted from a modular a few months prior to the new set date.

“If you can manage your weeks of supply at an efficient level (1.5 to 2 weeks products on hand at distribution center or store) you will reduce your markdown liability. Wal-Mart will start marking this product down two weeks prior to modular set in order to move through it,” said the replenishment specialist who asked to remain anonymous.

SHIPPING AND RETURNS
Dennis and the other experts said suppliers also see thousands of dollars in returns because of shipping damages. They recommend suppliers pay close attention to their products and make sure the items are double stackable. If not, the weight riding on top of the product will crush the product below.

Sometimes this is not noticeable until the product arrives at store. And this common is seen most often with promotional shippers. The replenishment experts recommend that suppliers should be checking their freight in the back room of the stores and looking for these "crush factor" signs.

Dennis said direct-to-store suppliers are at a higher risk because store associates may not properly check-in the products. She said shipments that go through the distribution center must pass several checks and balances that are not necessarily there in the direct to store arrangement.

SHARED EXPERTISE
Dennis said most small suppliers do not have a designated Wal-Mart team to closely monitor their business on retail link, and the bulk of those duties can fall on one person.

She and two other replenishment and logistics experts who asked for anonymity, said there are tactics small suppliers can use to fend off chargebacks and deductions related to shipping and receiving errors.

• Don’t Backorder
When a supplier breaks a single purchase order into multiple invoices and multiple shipments for that purchase order, it results in multiple receiving’s at the warehouse. Because of timelines involved in the invoice payment process, this will increase deductions being filed. Dennis said suppliers should bill and ship one invoice per purchase order. This is referred to this as ‘Fill and Kill’ the PO.

• Don’t Ship Partial Orders
If a supplier can’t fill the full order, it is not wise to ship a part of it because often a deduction or chargeback will occur when the invoice, purchase order and receiving ticket do not match.The supplier will take hit on the fill rate and run the risk of not getting paid on partial orders. The experts suggest contacting the replenishment manager at the retailer and canceling the purchase order.

• Labeling/Packing Mistakes
To avoid unnecessary adjustments, a supplier needs to ensure that the label description and count match the contents within. The experts recommend that the load be completed by layer before starting the next item. Consider marking cartons with different color inks when shipping multiple items in similar sized cartons (Consider different size fonts to help identify similar vendor stock numbers.) so packers and unloaders can avoid mistaken identity.

Suppliers should also consider slipsheets to help distinguish a change in items when layering out a pallet. Some companies hire auditors to double/triple check shipment accuracy before they release to carrier. It is also important to shrink wrap the top of the pallet in addition to the sides to reduce “pallet shopping”, along the supply chain. Require a photocopy of driver badge for every driver before they leave with load. Using the terms “non-negotiable” on the packing slip will help when investigating any carrier issues. Be proactive and run “Retail Link” reports to identify trends in over/under shipments and perhaps carrier/warehouse specific issues.

• Don’t Make Substitutions
Dennis said a three-way matching process at Wal-Mart collates the invoice, purchase order and receiving ticket and when a product substitution is made that system won’t line up and will trigger a deduction for item shortages. Some suppliers think substitutions will resolve their issues with certain product shortages, but it will likely cost them three-fold. This is a charge for shortages/overages, a substitution charge, and rarely do they get the incorrect product returned or any credit for it. Product substitutions do not pay, Dennis said.

• Lead Time Audits
Another area where fines can be levied against suppliers by the retailer is when deliveries are late. The experts suggest suppliers complete a lead time audit at least once a year to make sure they are giving themselves enough time to deliver. They also caution that less-than-truckload carriers do not typically deliver on or ship on the weekends, which can cause orders to arrive late. The experts agree suppliers have to micromanage their shipments from their own warehouses until they arrive and are fully accounted for at the distribution center or store.

“Wal-Mart gives suppliers an immense amount of information within Retail Link that can be used to track the products through the point of sale. Other retailers don’t come anywhere near this level of visibility. But no one is babysitting the supplier. It’s up to them to jump in there and figure it out,” Evert said.

The experts agreed that it’s a “he said, she said” game when combating the deductions and chargebacks. Suppliers who have the most documentation and have been the most diligent in monitoring their shipments will be the ones who get paid.

Agriculture is still king in Arkansas despite being the home of the world’s largest retailer, a robust trucking industry and a quickly evolving start-up sector.

Farming is an $8 billion industry in the Natural State, according to Travis Justice, senior economist with the Arkansas Farm Bureau. But while the total receipts continue to rise, farmers report having only a fair year at best in 2013. But, as is the nature of farmers, they hold out hope for a better 2014.

CHICKEN TALES
Poultry comprises a lion’s share of the state’s net receipts from agriculture behind the production of Arkansas-based companies like Tyson Foods, Simmons Foods, George’s and O.K. Foods. Another half dozen poultry firms have processing facilities in state.

The production of poultry is valued in excess of $2.4 billion annually, with 1.2 million broilers and roughly 24 million turkeys grown and processed in Arkansas. Poultry integrators have reported a solid year in terms of profits, helped by lower grain costs, higher retail prices amid steady consumer demand.

In fiscal 2013, Tyson Foods’ chicken division generated operating income of $646 million, up from $484 million in fiscal 2012. Tyson achieved these results in spite of incremental feed expenditures of $30 million and $470 million, in the quarter and year, respectively. Donnie Smith, CEO of Springdale-based Tyson Foods, said lower grain costs with the recent bountiful harvest and lower market pricing won’t show up in production results until early second quarter of 2014.

Total chicken sales for fiscal 2013 totaled $12.296 billion, helped by a 1.9% increase in volume and a 6.1% hike in prices. Smith said Tyson captured share as the No. 1 chicken brand in the U.S. during the quarter, according to Nielsen. He said the company will continue its “buy versus grow” policy through 2014, as it works to keep excess supplies out of the freezer.

“We will continue to buy breast meat in the open market that goes into valued-added products, in order to keep dark meat surpluses from occurring. We will also work toward more product innovation with dark meat products,” Smith said during the earnings call with analysts.

FARMER TALES
Poultry growers from Berryville to Springdale said corporate strategies to buy chicken in lieu of growing it has come at their cost.

“This has been the worst year I have seen in the 12 years I have been growing. I invested $170,000 retrofitting three of my seven houses and had my flocks per year reduced to four instead of five. Cash was so tight I had to take a part-time job to keep food on the table,” said Casey Wilson, a Tyson Foods grower near Huntsville.

He said chick quality has also been more inconsistent this year which has created some volatility in the payout structure based on the tournament system used throughout the industry.

“My farm goes from the top to the bottom from one flock to next and my operations are consistent in these houses year-in and year-out. It’s a complete puzzle to me how these results can vary so widely,” Wilson said.

Randy Robinson has been farming for 30 years and operates 10 broiler houses for Tyson Foods. He gives 2013 a “C-” rating citing the longer layout times between flocks, which have cut his farm’s total production. He also raises cattle near Springdale.

Gene Pharr, a grower for George’s Inc. near Lincoln, said 2013 has been on par with his expectations, but he also cites a slight reduction in layout time between flocks and recent concerns over diseased birds.

A few years ago, Pharr invested in LED lighting in his poultry houses and that has reduced his energy costs by more than 60%. Pharr said that investment in the lights is paying off and helping the farm’s total bottom line. There are five houses on his farm and his biggest concern is the supply of birds he may or may not get, depending on production goals.

The average cost of operating a poultry house ranges from $100 to $250 per flock depending on barn size and age of the flock when it goes to market, according to Susan Watkins, professor and extension poultry specialist at the University of Arkansas in Fayetteville.

Jim Yell of Lincoln said he sold his four broiler houses and 20 acres of land nearly two years ago. Yell said that despite tedious management, the business was a losing proposition and it didn’t matter with which company they contracted. Yell has grown poultry for Tyson Foods, Peterson Farms and Simmons Foods throughout the past decade. Yell held on to his Angus beef cattle operation.

BETTER BEEF
Justice said that broiler farms often work in tandem with beef cattle operations in Arkansas to help boost overall farm profits. He said cattle production across the state is valued at $500 million, with some 1.7 million head. Roughly 95% of that herd is configured in cow-calf operations with an average herd size of 100 to 150 head.

“Coming off a two-year drought that forced some herd liquidation, cattle farmers got a little relief in 2013. We have had adequate moisture, sufficient grazing conditions and ample hay supplies all while calf prices have escalated on the shorter supply numbers,” Justice said.

Cattle markets are heading into the final holiday period of 2013 at record or near record price levels across the board, according to Darrell Peel, extension livestock marketing specialist with Oklahoma State University.

Justice said Arkansas cattle farmers will likely hold their herds steady into 2014.

“On the bright side, the immediate liquidation has been stemmed given the good forage supplies, but the cost to add cattle right now is very high and many farmers are standing down,” Justice said.

JERSEY AND ANGUS
Robinson, the cattle farmer near Springdale, said his cattle herd numbers about 140 and he sold off all of his calves this past summer when prices reached high levels. The summer rally in calf and feeder cattle prices added $20 to $25 per hundredweight to steer calves and feeder cattle since late May. That is equal to $100 to $200 additional per head, and much of that gain is attributable to improved growing conditions for corn and forage this year.

Yell said he bought a Jersey milk cow so his wife Connie could make butter, cream and canned milk for baking, but within two months they had a two year’s supply so he put one of his beef calves on her.

“This one Jersey has raised three calves for me this year which I sold at roughly 350 pounds. The going price at $700 or better was a nice boost to the farm income. We still run a herd of roughly 160 Angus cattle and plan to keep that number steady in 2014,” Yell explained.

Yell markets his Angus beef on half or quarter side and said consumer demand has been somewhat tepid given the higher prices for the grass-fed cattle. Beef prices overall have been high this year, but that has not kept export demand down.

ROBUST BEEF EXPORTS
Justice said the exciting story in 2013 for the beef industry has been robust export demand from Japan and the Pacific Rim region. Japan has regained its No. 1 position as the biggest importer of U.S. beef. The U.S. Meat Export Federation reported through October gross metric tons of beef sold to Japan increased 48% from a year ago to 178.68 metric tons valued at $1.017 billion.

Justice said because Arkansas cattle producers provide calves that eventually make their way into feed yards which are sold for slaughter, there is a trickle down impact to local farmers when exports are strong. One big factor to watch in 2014 is consumer push back from higher prices that could temper domestic demand.

Peel said cattle slaughter and beef production are falling as the market transitions into a much tighter supply situation in 2014. With that, cattle and beef prices are expected to push to even higher record levels in 2014. Justice said domestic consumers will still want hamburgers and steak, but they may not be ordering them at higher-end restaurants.

Market research firm the NPD Group said the restaurant industry expected price increases for beef will create a headache for restaurant-goers, but it’s likely to hit consumers even harder. NPD Group vice president Harry Balzer said that while only about 30% of what we pay at restaurants reflects the costs of food, around 80% of our grocery bill is food costs.

Retail all-beef prices averaged $5.35 per pound in October, up 7% from a year ago, according to the last record available by the U.S. Department of Agriculture. Wholesale prices rose 4.5% to $3.09 per pound. The net farm value totaled $2.74 per pound, up 2.8% from a year ago.

Experts predict those prices will escalate further into 2014 given tight feeder cattle and the smallest calf crop since 1940. Justice said the cattle industry has not yet turned the corner because it will take several more years to rebuild the herd from the sell off of the last couple of years. On a bright note, he said in 2013 beef exports finally surpassed the levels from the pre-2003 export bans related to Bovine Spongiform Encephalopathy, commonly known as “Mad Cow Disease.”

“It took the industry a decade to recover that export volume lost in December 2003. The sustained drought and record grain prices of the past couple years also weighed heavy on the beef industry, but barring some weather catastrophe or disease outbreak, 2014 should be better for many Arkansas farmers,” Justice said.

Yihaodian.com, a subsidiary of Walmart China, reported annual sales of $1.89 billion in U.S. dollars, up 77% from a year ago. Walmart owns a 51% stake in the online food business that nearly doubled its number of registered users to 57 million last year, according to the earnings statement.

Known for its imported gourmet portfolio, Yihaodian sold 250 million units of imported food. Almost 40% of imported diary products in China were sold from the Yihaodian channel, according to media reports out of China.

Yiihaodian initiated its delivery of fresh food, such as fruits and vegetables, to Beijing, Shanghai and Shenzhen to further tap the online grocery market. Such service will be extended to Chengdu and Wuhan next year.

Twin Peaks has scoped out a location for its second restaurant in the Natural State. The planning commission in Rogers has approved the new eatery to be located at 2400 Promenade Blvd. near Cabella’s Outdoors.

The new restaurant in Rogers is one of nine by the Dallas-based chain slated as “coming soon” on its corporate website.

Twin Peaks has one location in west Little Rock and has a similar atmosphere as Hooters. The only Hooters location in the region (Fayetteville) closed in August of last year citing a lease problem.