A key measure of U.S. consumer prices declined in April by the most on record as travel and apparel spending collapsed during the coronavirus pandemic, reports Bloomberg.

The core consumer-price index fell 0.4% from the prior month after a 0.1% decrease in March.  That’s the biggest drop in data back to 1957. Compared with April of last year, the core CPI rose 1.4%, the smallest annual gain since 2011.

A key measure of U.S. consumer prices declined in April by the most on record as travel and apparel spending collapsed during the coronavirus crisis.

The core consumer-price index, which excludes volatile food and fuel costs, fell 0.4% from the prior month after a 0.1% decrease in March, Labor Department figures showed Tuesday. That’s the biggest drop in data back to 1957. Compared with April of last year, the core CPI rose 1.4%, the smallest annual gain since 2011.

The airlines that operate at the Billings Logan International Airport began requiring that all passengers wear a face mask from the check-in process until they deplane. The order comes from Delta, United, Frontier, Alaska and American. Director of Aviation and Transit, Kevin Ploehn, said, “  For the future, this will be the new normal, and frankly, if the airlines are going to entice folks back into the sky they need to do this so people can feel safe.”

May 8 at 8:59 pm

Chef’s log day eleventy four, day 5 post quarantine. Parking lot is full, guests are dining 6′ apart, social distancing is being adhered to, my dining room is full, and the take away meals keep on coming. 45 days of plating in styrofoam boxes and aluminum half pans has been my method of operation. I cannot adequately express the joy to plate a meal on actual plates! To my crew that has stuck with me from day one of this pandemic, my hats off to you all. You all are the reason the HH is what it is, and continues to be! I am normally very humble, but to hear the continuous compliments, read the positive reviews, help turn your meal from sustenance into a memory, sparks not only pride but creativity. I want to keep doing right by my customers every single dish. I want today’s meal to be better than yesterday’s, and even better tomorrow. There is no manual or cheat sheet for a chef to refer to amidst a pandemic. It’s learning every second of every day what works, and what doesn’t. Sure there are failures and missed opportunities, but we are learning as we go. I can honestly say I could cook the rest of my life and never deal with another quarantine, and be just fine. However, when the murder bees flock to Billings, or they release the Carole Baskins, I am ready to deal with it! Night ‘yall.

Andrew Glynn is Chef at the High Horse Saloon and Eatery in Billings.

Business.org compared median salaries to the cost-of-living in each state to find which states are the best (and worst) for affording housing costs. 

They found that: 

* In Montana, it takes 41.5 hours to afford the median one-bedroom rent at $700 per month. 

* Montana ranks #6 for having the best wages compared to cost of living in the US. 

* The median salary in Montana is $35,080. 

From Oil Patch Hotline

Two major Wall Street banks are projecting higher prices for crude oil later this year because of production cuts by OPEC and hundreds of wells shut down in leading oil producing states of Texas and North Dakota.

UBS sees Brent rising to $43 a barrel by the end of the years because of lower prices and rising to $55 a barrel by mid-2021.

Goldman Sachs upped its Brent forecast from $52.50 to $55.63 a barrel  and raised West Texas Intermediate crude from $48.50 to $51.38 a barrel for 2021.

“Oil production has started to decline quickly from a combination of scale back in activity, shut-ins and core-OPEC/Russia production cuts. Demand is also beginning to recover from a low base, led by a restarting Chinese economy and increasing transportation demand in developed market economies,” Goldman Sachs said.

“We still expect oil demand to contract strongly this quarter, though not as much as we did before; we now estimate minus 15 million barrels per day  year on year for the second quarter, versus minus 20 mbpd previously,” UBS said.

The bank expects global oil supply to contract by nearly 6 mbpd year on year in the second quarter, citing forced production shut-ins in North and South America as current low price environment fails to cover operating costs.

During early trading May 6 the New York Mercantile Exchange, WTI had risen to $23.62 a barrel and Brent was up to $29.81 a barrel.

The impact of the disruption of our economy with the business shutdowns across the nation, due to the COVID-19 crisis, is yet to be understood and will be full of surprises. But one thing is certain, impacting as it is two of Montana’s basic industries – travel/tourism and agriculture – Montanans are in for a lot of changes and probably a bumpy ride.

One aspect of those changes is already making the headlines – the production and processing of beef. Although a long-standing problem that has frequently elicited complaints and controversy among livestock growers and the ag community, for the first time in his tenure, Governor Steve Bullock has addressed the issue with a letter to the USDA.

Attorney General Tim Fox, and gubernatorial candidate, has joined forces with other states demanding an investigation of price fixing charges. Other politicians, too, are now proclaiming that something must be done.

What’s prompted the sudden interest? Consumer awareness of the issue, says one local economics expert, Ed Ulledalen, Billings.

The whole issue comes down to what the consumer wants, says Ulledalen, and for the most part US consumers wanted low-priced products. They are usually not aware of how the market works and what risks might exist. The COVID-19 crisis has revealed the nation’s vulnerability in several regards, most especially in our food and medicine supplies.

As an independent financial consultant, Ulledalen deals “with all kinds of farmers and ranchers,” in Montana, and he has long understood that “this is an on- the- ground concern of a lot of farmers and ranchers.” Now, “with the meat shortage it has become a kitchen table concern.”

Shortages on grocery store shelves have captured consumer awareness. “The bell rang when you walked into Costco and the meat counter was empty,” said Ulledalen.

That awareness is going to bring about changes – changes that could mean the unraveling of the way the economy has been functioning. What all that will entail is uncertain, but it will most definitely mean changes for Montana.

The question becomes, why don’t we have meat? said Ulledalen. Answering that question requires going down “all the rabbit trails.”

“It is not something to reverse quickly. It will take years.” Ulledalen suggested that low-costs will go away and “our meat industry will be more like it is in Europe. They don’t have the same kind of structure.”

Consumers will direct the changes.

Consumer demand for cheaper products has driven the industrialization of all kinds of markets, and it has resulted in the “industrialization of the food chain,” explained Ulledalen.

What we are going to see is a reversal of “50 years of globalization,” he added.

Little realized is how much concentration there is of beef processing plants. And, that foreign countries operate two of the four companies that dominate the US market, including China that owns Smithfield Foods, based in Virginia and with a plant in South Dakota. To underscore the cultural as well as the economic status of the industry, Ulledalen pointed out that within the Smithfield plant, 40 different languages are spoken.

About the economy in general, Ulledalen says there is lots of uncertainty — “the bad economic news hasn’t even come out yet.”

“The Federal Reserve and the federal government have weighed in so hard that they have stopped us from going into a second recession,” said Ulledalen. It is still unclear, however, what the consequences are going to be over the next five or ten years, “because you screwed up the world economy, not just the US.”

“We are going to get some kind of surge as the restrictions are lifted. Some business will come back but …maybe 20 percent of the economy won’t come back.” Especially vulnerable, and of most important to Montana, are the travel industry and agriculture. And, “it’s not to be resolved in a matter of weeks.”

Said Ulledalen, “We have a biological contagion that has potential to morph into a financial contagion and an economic hard –stop. An “economic hard stop” is very unlike most descents into a recession, which usually happen in gradual and incremental weakening in various market segments.

Most beef processing in the US is done through four companies, Tyson Foods, JBS, Cargill, and National Beef. While there was a time when there were many meat processors scattered throughout most states, the industry has been concentrated for many decades, a situation that is sure to create problems – such as the ability to control prices.

Attorneys General from 11 states, including Montana’s Tim Fox, sent a letter to U.S. Attorney General William Barr, asking him to investigate possible price fixing among the country’s four largest beef processors, who control 80 percent of the industry.

President Trump threw his weight behind the request, sending his own request that the federal agency proceed with an investigation. He pointed out that supply and demand forces, within a competitive market environment, should prevent price gaps from playing out to the extent that they have in the U.S. meat-packing industry.

According to an Associated Press report,  a  disparity in the price of live cattle and the retail cost of boxed beef that is sold to consumers, “shows the market lacks fair competition.” According to the report, “Live cattle futures recently hit 18-year lows, while both the price of boxed beef and consumer demand remain healthy as consumers stockpile meat in response to the COVID-19 pandemic.”

The state attorneys general suggested that if, after an investigation, there is no appropriate enforcement action that can be pursued, regulatory strategies should be explored to promote competition. A suggestion that even Montana’s Governor seems to believe is worth considering.

Nuances of regulations in the industry has left tons of beef sitting in lockers during the COVID-19 crisis with no place to go. The distribution system for grocery stores is different than that which serves institutions like schools and hospitals. School closures have left them with unused supplies but because it has a different “stamp” on it, and has gone through a different inspection process than those that serve retail markets, regulations prohibit the product from being sold elsewhere or even given away.

Requests to the USDA to allow the Montana Department of Livestock to consider modified protocols have been denied.

Governor Bullock’s letter to U.S. Department of Agriculture Secretary Sonny Perdue asked that regulations be temporarily set aside to prevent the food from going to waste, at a time when it is needed in other areas. He also asked that the regulatory agency set aside some rules to allow some local processing in order to avoid food waste.

Perhaps even more significantly, Bullock suggested that the USDA encourage new ideas to reduce barriers for Montana meat processing capacity and improve markets for rural producers in Montana over the long term.

His suggestion is nothing new. For decades everyone from beef producers, to would-be local butchers, to restaurants and other consumers, have had a wide range of complaints about an industry that cannot adjust to demands. Could this be the impetus for long awaited change?

Yellowstone County’s Disaster & Emergency Services Coordinator K. C. Williams has received a letter from the Department of Military Affairs for Montana announcing that his application for a grant to improve cyber security for Yellowstone County has been approved.

Official notification will probably not come until about September, said Williams, but at least tentatively the Senior Advisory Committee and the Homeland Security Advisor has selected Yellowstone County’s Cyber Security project for inclusion in Montana’s application to the Department of Homeland Security and FEMA for fiscal 2020. (Emergency services in Montana operate under the auspices of the Department of Military Affairs.)

The $75,000 grant will allow the county to make the needed improvements in a more complete, holistic approach than the phases that the county would otherwise have had to pursue. The end results will be much better, said Williams, and it won’t have to be funded by Yellowstone County taxpayers.

A few months ago, Jeff Slavick, Director of Information Technology in Yellowstone County, submitted a proposal to County Commissioners to begin the process of updating the county’s cyber security which he said was woefully inadequate. Upon learning this, Williams pointed out that improving cyber security of government agencies was a high priority of Homeland Security and they were making grants available.

Williams submitted an application for Slavick’s proposal. Some security the county has to provide by law, but much of it is just matter of good stewardship.

“It is just a better idea to be more secure” with all of the county’s electronic documents and data storage, said Williams, explaining that the county interacts with a lot of government agencies, as well as the civilian population, all of which are subject to potential cyber threats.

The grant will probably have an effective date of October 1. Williams said that he expects that the federal government will require that the project be completed within a year from the effective date.

Could it be that a new technology that utilizes a waste material of Colstrip power plants — coal ash— can build the foundation (perhaps quite literally) of a new economy for Colstrip?

David White, CEO and co-founder of RamRock Building Systems, LLC, of Chattanooga, Tennessee, believes so and he has come to Montana to try to persuade Talen Energy, Montana regulators, and the public to take his company’s proposal seriously.

The product can be a low-cost strengthening additive to Portland cement, as well a high-quality, low-cost alternative to conventional concrete. Because the product locks up toxins in the ash at the molecular level, it becomes environmentally benign. It’s a win, win on every front.

“It effectively turns waste into wealth to the lasting economic and environmental benefit of the people of Montana and beyond,” said White. “This is a break through. It is break through chemistry…something that did not exist before…. we are doing something no one else is doing…. we can revolutionize the nation’s electric utility industry.”

RamRock first tested similar material in the US two and a half years ago, having initially been developed and commercialized by RamRock’s overseas technology partner ARC Innovations in South Africa.

White’s biggest problem seems to be that it sounds too good to be true, but since RamRock is simply importing proven technology for domestic commercialization, all they really need to do is to demonstrate how it can benefit a trillion-dollar disposal problem in the US.

White has presented his proposal to Talen Energy, a partial owner, and the operator of Colstrip generators 3 and 4, which may otherwise close within the next five years. Talen Energy is responsible for determining how they will mitigate the environmental threat of the residual coal ash of which there are, according to DEQ, some 15 million tons, not counting perhaps 20 million more tons from the older, now-defunct units, Colstrip generators 1 and 2.

Disposing of those wastes onsite will cost between $400 million and $700 million for units 3 and 4 alone, and several times that if it is determined that that waste and the waste from units 1 and 2, must be removed for burial in lined landfills.

The closed J. E. Corette Power Plant in Billings is also a likely beneficiary of White’s new technology. The plant was where two local political candidates made a public announcement a couple weeks ago, heralding the product’s potential benefits.

Public Service Commissioner Tony O’Donnell and state Rep. Rodney Garcia, both of whom are in re-election campaigns, held a press conference trying to gin up public support for the idea and for their campaigns.

O’Donnell said it is not only an opportunity to clean up a toxic waste site but a public relations coup for Talen Energy in being able to claim credit and help generate sorely needed jobs for the Colstrip area.

For RamRock the press conference was an opportunity to generate public support.

White first contacted Rep. Garcia during the state legislative session when Garcia was trying to convince legislators that the state should buy the Colstrip Power Plant. Press coverage made White aware of Garcia and of the problems confronting Montana in the possibility of losing jobs and the economic base that comes from energy generation at Colstrip.

DEQ must approve the idea for Talen Energy to act upon it, since DEQ has oversight on how the ash is disposed of.

White has been in conversations with DEQ officials since a visit to Montana with ARC Innovations last July. His company is presently preparing the documentation for a Beneficial Use Determination (BUD) by DEQ before the month is out.  Meanwhile, RamRock remains in discussions with Talen Energy regarding a demonstration project that White hopes will “carry the day” for his company’s “cutting-edge, economic development initiative.”

White makes clear that the product needs no research and development funding, as the proposed demonstration is just that — preliminary testing on Colstrip ash to demonstrate that it has compression strength in excess of 6,200 PSI in a mere 7 days.

At that strength the product is well beyond that needed for conventional concrete, said White. And, it is perfect for the all-concrete home and related construction that RamRock is pioneering in association with ARC Innovations.

A demonstration video shows the product being made simply and quickly using nothing more than a bowl and a stick —- mixing the coal ash with a couple of proprietary liquids and pouring the fluid into a plastic container. In about 29 minutes, sitting at room temperature, the fluid is no longer fluid and in an hour and a half it can be removed from its mold and is “as hard as a rock” – and maybe more so.

RamRock’s Colstrip initiative is based on a preliminary proposal submitted to the US Department of Energy last year for a “Zero emissions approach to all solids, liquids, and gases, including CO2” and its use, among other things, in feeding an onsite indoor farming complex which would provide “year-round, 24/7, fresh, organic, fruits and vegetable.”

“We have the technology,” says White, “and repurposing the money that will otherwise be spent to either cover Colstrip’s coal ash problem up or move it elsewhere is all that really stands between embracing the future and turning our back on it.”

U.S. Secretary of Transportation Elaine L. Chao announced that the Department of Transportation’s Federal Aviation Administration (FAA) will award $1.187 billion in airport safety and infrastructure grants. The total includes $731 million in Airport Improvement Program (AIP) grants and an additional $455 million in Supplemental Discretionary grants. The money will be available for 100 percent of the eligible costs under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

“This Federal investment of over $1 billion represents the Department’s continued commitment to the safety and efficiency of our nation’s airports for the traveling public,” said U.S. Transportation Secretary Elaine L. Chao.

 A complete listing of grants (PDF) and an interactive map of airports receiving funding is available on the FAA website. Montana has received about $15 million and in this award will receive a total of $7.7 million.   Billings Logan International Airport will receive $255,410  to reconfigure the runway;  $ 2,117,366  to expand the terminal and $663,063                            to acquire land for approaches.

 “The 439 grants will ensure that airport sponsors can make the necessary improvements so their airports can operate in a safe and efficient manner for years to come,” said FAA Administrator Stephen M. Dickson

KLJ Engineering welcomed Brenna Moloney to their Billings office.

Brenna Moloney

Moloney joins KLJ as an archaeologist. She earned a master’s in archaeology from Wayne State University, as well as a master’s in geography from Eastern Michigan University. She has ten years of experience in cultural resources.