THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, October 9, 1995 TAG: 9510070167
SECTION: BUSINESS WEEKLY PAGE: 04 EDITION: FINAL
TYPE: Opinion
LENGTH: Long : 122 lines
While the Republican revolution would shake up old mainstays like welfare and Medicare, one group has fared well, quite well in fact, at the hands of the U.S. Senate: Southern farmers.
Not since legendary Democratic barons such as Mississippi's Jim Eastland ran the Senate has cotton had such clout.
While cutting $13.4 billion in crop subsidies, the new farm bill, thanks to the Republican's new political power, favors cotton planters with large production incentives.
On the Senate Agriculture Committee, Republican hands including John Warner of Virginia, Jesse Helms of North Carolina, Thad Cochran of Mississippi, and Paul Coverdell of Georgia ushered forth a farm bill provision that encourages more cotton, less soybeans, and, in another plus for Southern growers, would leave alone tobacco and sugar subsidies.
Under the measure, wheat and feed-grain producers, who primarily are in the Midwest, can switch some of their acreage to soybeans and still collect deficiency payments.
But rice and cotton farmers would be encouraged not to diversify. They risk losing their deficiency payments if they shift to soybeans. Cotton producers also can switch up to 25 percent of their traditional soybean acreage to rice and cotton.
However, Journal of Commerce reporter John Hall notes cotton's gain could be be the poultry industry's loss, at least on this side of the continent.
Planting more Southern farmland in cotton instead of soybeans means the region's poultry industry would buy more Midwest soybean meal. That could raise chicken feed prices, and send poultry farms packing to the Midwest, closer to the feed source.
Time window: Ever since Time put the computer on the cover as its Man of the Year - back in, what, '84? - we've been looking for evidence that assured us the magazine was correct in its assessment. Well, this might be it.
Richmond-based mega-retailer Circuit City Stores Inc., which sells everything from stereo speakers to washing machines, said sales revenue at its stores open more than a year rose only 8 percent in September, a click down from Sept. '94's 10-percent gain.
``Comparable-store sales growth was limited by an industrywide shortage of personal computers preloaded with the Windows 95 operating system,'' said Circuit City chairman Richard Sharp.
Air wars: ``Certainly, they see the handwriting on the wall, like everyone else, that low fares are going to be coming back to the East Coast.''
David P. Campbell, airline analyst at the Richmond brokerage house Scott & Stringfellow Inc., offered the view last week after USAir said it's shopping for a merger partner.
USAir never recovered the large volume of business passengers it carried in the mid '80s. Business passengers simply don't travel the Eastern seaboard in the numbers common a decade ago.
This means the airline will be in a bad position the next time a low-fare carrier makes a significant challenge in USAir's strongholds in Northeast and mid-Atlantic cities, including Tidewater.
USAir recently abandoned service at Newport News/Williamsburg International Airport after discount carrier ValueJet opened shop.
Tidewater bankruptcies: The pace of bankruptcies in Hampton Roads has exceeded the rate in '94 in every month but one this year. In July, about 850 cases were filed in federal bankruptcy courts in the region, up from about 650 a year earlier.
Nationwide, business failures declined 1 percent during the first half of this year to 36,546 - the lowest level in five years, Dun & Bradstreet Corp. reported.
Tenneco today: Tenneco Inc. chairman Dana Mead has his hands full these days. Newport News Shipbuilding, Tenneco's mammoth Peninsula yard, has reentered the commercial ship market.
Tenneco intends to buy Mobil's plastic division for $1.3 billion. Mead plans to relocate his Houston headquarters to swanky Connecticut. And along comes the Council of Institutional Investors, representing 100 major pension funds.
CII ranked Tenneco among the 20 companies whose returns to shareholders are the nation's worst. Tenneco's total shareholder return from July '90 to July '95 was minus 1.5 percent versus 12.9 percent for all conglomerates, CII said.
For the year ended in July, Tenneco's total shareholder return was 7.1 percent, compared with 34.9 percent for the industry.
Mead took pen in hand and retorted: ``Tenneco's major managerial, operational and financial transformation over the past 3 1/2 years, combined with the fact that we have outperformed the market during the same period, should lead you to conclude that Tenneco does not belong on your focus list.''
Mead calculated Tenneco averaged a 17.7-percent return to shareholders from year-end 1991 to July 31, 1995. New York energy analyst Ron Barone of PaineWebber offered this perspective: ``Management has dramatically improved the company, and the stock market hasn't given them credit for the significant actions they've taken.''
Rate cut: Virginia Power signed DuPont Co. to a five-year contract for lower electrical rates at DuPont's Spruance Fibers Plant in Chesterfield County. DuPont could shave its power bill several hundred thousand dollars a year.
Virginia Power's real-time pricing program allows DuPont to take advantage of lower rates - usually at night - and switch some production to cut electrical costs.
Managed care: Williamsburg Community Hospital teamed up with Riverside Regional Medical Center in Newport News to build a $3 million cancer treatment center. The building will contain a diagnostic and primary care center and doctor offices.
``We recognize the importance of having a medical staff that's strong and able to compete in a managed-care market,'' said Joseph Converse, the hospital's chief of staff.
Dining out: In the last year, Pizzeria Uno, Fuddruckers and Outback Steakhouse have arrived on the Peninsula. The chains have especially proliferated in York County and Williamsburg.
Last month, Paragon Steak House of San Diego closed its Carvers Creek steak house on Warwick Blvd. in Hampton. ``Our market has traditionally come out of the northern Peninsula areas like York County, and the traffic patterns have changed,'' Paragon's Bob Seeley said.
That's opened an opportunity for BOTH, the Virginia Beach-based franchisee in Hampton Roads for Golden Corral restaurants.
BOTH, which presently operates cafeteria-style restaurants in Virginia Beach, Chesapeake and Charlottesville, plans to open a restaurant in the old Carvers Creek.
BOTH President Hu Odom said BOTH plans to build five more area restaurants in the next three years. Odom said sites in Williamsburg and the Patrick Henry Mall area of Newport News are being examined. by CNB