According to the National Restaurant Association, RPI is “a monthly composite index that tracks the health and outlook of the US restaurant industry.”

This is not to be confused with other restaurant metrics, dollar sales for instance, which track overall revenue trends and thus can be impacted by general inflation or operational changes.

The latest RPI index stood at 100.6 in January, up 0.9 points from the previous month but still about 2.1 points lower than a year ago. Readings above 100 indicate expansion.

General restaurant industry business conditions deteriorated for much of 2015 (see top chart) and some of the internal index measures point to sustained weakness.

The fact that restaurant industry performance is not great even with a mild winter and higher disposable incomes should be a significant worry for the US meat industry as we prepare for spring.

There are two negatives that particularly stand out. First, the sub index that tracks current conditions in the industry was pegged at 99.7, the second month that it was in contraction territory.

The expectation part of the index showed notable improvement, however, hence the increase in the overall index.

In other words, restaurant operators are saying things are not in great shape but they are now more optimistic about the future than they were in December. Time will tell whether that optimism becomes reality.

An even bigger issue, in our view, is what is happening with customer counts. The index tracking customer traffic now stands at 98.3, 0.5 points lower than in December and at the lowest point since February 2013.

It seems somewhat odd that government data continues to show higher dollar sales at foodservice and yet the NRA survey of operators tells us that they are seeing lower customer counts. Is this really contradictory information? Or are we looking at two different aspects of the industry.

According to the Census Bureau, dollar sales at food services and drinking places in January were $53.528 billion, 6.1 per cent higher than in January 2016.

For the last 12 months, dollar sales at foodservice have increased 7.8 per cent compared to the same period a year ago.

Menu price inflation accelerated last year and restaurant operators had to contend with higher raw material prices, especially once many of their hedges expired.

We think that the reason you are seeing higher dollar sales is because restaurants have printed more expensive menus. The higher prices also have taken their toll on customer counts.

There is also a lot of talk in the industry about millennials and how they are shaping current trends in the industry. Some of the studies point out that they are willing to pay more (hence higher checks) but not necessarily consume more.

The focus now being on product characteristics rather than the volume/value relationship. Meat supplies are expanding.

Sticky high prices at foodservice and the lower customer counts should be a cause for concern, and could present headwinds, especially for ground beef, which is over-represented at foodservice.