Only In America do we burn our food in Cars

Americans should brace for higher food prices this year now that demand for corn has pushed U.S. supplies to their lowest point in 15 years.

Higher projected orders from the ethanol industry sent corn futures soaring Wednesday, as corn supplies became the latest commodity to plummet. Low levels of wheat, coffee, soybeans and other food staples have already sent prices surging on the global market.

As those reserves decline, U.S. food companies are warning of retail price increases. (Too late!)

The ethanol industry's projected corn orders this year have risen 8 percent, to 13 billion bushels, after record-high production in December and January, the Agriculture Department said Wednesday.

That means the United States will have a reserve of 675 million bushels left over in late August when this year's harvest begins. That's roughly 5 percent of all corn that will be consumed, the lowest surplus level since 1996. (if the harvest isn't hurt by weather conditions)

The price of corn affects most food products in supermarkets. It's used to feed the cattle, hogs and chickens that fill the meat aisle. It is the main ingredient in Cap'n Crunch and Doritos. Turned into corn syrup, it sweetens most soft drinks. (And we put it in gasoline to keep prices down....ha-ha-ha-ha)

The decline in reserves caused corn futures to surge, with prices rising 3 percent to settle at $6.98. Corn prices have already doubled in the last six months, rising from $3.50 a bushel to nearly $7 a bushel. Analysts expect the price increases to continue in coming months.

Major food makers and some restaurants have already said they'll be raising prices this year because they're paying more for corn, wheat, sugar, coffee and chocolate, all of which are at historically high prices. Weather, such as flooding in Australia and droughts elsewhere, has affected many crops this year.

A severe drought in China, the world's largest wheat grower, could force prices even higher. The U.N.'s food agency has warned that the drought is driving up the country's wheat prices, and now the focus is on whether China will buy more from the global market, where prices have already risen about 35 percent since mid-November.

Consumers will likely see price hikes as early as three months from now, though most of the impact won't be felt for another six months, said Scott Irwin an agriculture economics professor at the University of Illinois. Chicken prices are among the first to rise because the bird's life span is so short that higher feed costs get factored in quickly, he said. Price hikes for hogs take about a year and cattle two years, while packaged foods take six or seven months to start rising. (except that we don't factor in fuel or food into inflation, remember?)

Some food makers already began selectively raising prices within the past few quarters. (Really?!)

Those higher prices are filtering into stores. (As in present tense) Supermarkets have resisted price increases for some time, hoping to hold onto their cost-conscious customers in the tough economy. But chains such as Kroger now also say higher prices are coming.

Cereal maker Kellogg Co. said last week it plans to raise prices by 3 to 4 percentage points. Sara Lee Corp. said Tuesday that it will continue (as in past tense) its price increases as it copes with higher commodity costs. The company said the price it pays for coffee beans alone is up 60 percent compared with last year.

And J.M. Smucker Co. said Tuesday that it would raise prices again on Folgers and Dunkin Donuts coffee for the third time this year, by 10 percent on average. A large can of Folgers is already going for around $12 at many markets. (well that's probably a blessing in disguise for the fat-asses out there)

It's not just playing out in the grocery store. McDonald's Corp. said last month that it may raise prices this year as its own food tab rises. The company already raised prices in some markets, including the United Kingdom.

FDA Approves Cloned Meat for Consumption

Someone tell me, why do we need this?

Critics Worry About Secondary Effects of Genetically Modified Foods

Jan. 16, 2008 —

It could be years before meat from cloned animals hits store shelves now that the Food and Drug Administration has given producers permission to sell it, but the milk from cloned offspring could hit the markets sooner.

"The milk and meat for cattle, swine and goat clones are as safe to eat as the food we eat every day," said Randall Lutter of the FDA.

Currently, only a few hundred clones exist, and they'll likely be used for just breeding.

Some genetically modified food already is available in American groceries. In fact, the food industry says that if a product has corn or soybean in it, it probably has been genetically modified.

"We would not be using those ingredients unless the authorities had evaluated them and determined them to be, to be safe," said Mark Nelson of the Grocery Manufacturers' Association.

Other countries have moved more slowly and been more cautious in giving the green light to cloned food. In Europe, where a more activist consumer culture exists, recent reports said it "is very unlikely" there's any difference in the safety of cloned or genetically modified products and natural products.

But Europe remains divided about food that contains genetically modified plants and grains, while in the United States genetically modified food is so common most people don't even realize they're eating it.

In the United States, determining which foods have been genetically modified can be difficult because they don't have to be labeled as such. The FDA also doesn't plan to require the labels for cloned animal products.

Critics worry the cloned and genetically modified foods still may be unsafe for consumption.

"It is really a huge, uncontrolled experiment on the American people," said Andrew Kimbrell of the Center for Food Safety.

They also worry about secondary health effects of eating cloned meat, such as a circumstance in which clones develop health problems later on and need more antibiotics and drugs.

"We think there are consequent effects the FDA has not yet looked at that could impact human health," said Joseph Mendelson of the Center for Food Safety.

What the FDA may do in the future is allow producers of regular meats and milks to put a label on their products saying they are not from cloned animals.

Meanwhile, the government has asked food producers to honor a voluntary moratorium on selling cloned meat animal products while marketing plans are worked out.

Shoppers who want to avoid genetically modified food should search for labels that say "100 percent organic," because by law those cannot contain biotech ingredients.

Food prices soar in America

Higher food prices, led by milk, are hitting consumers where it hurts - in the stomach.

By Aaron Smith, CNNMoney.com staff writer

December 20 2007: 12:21 PM EST

NEW YORK (CNNMoney.com) -- John Norris' family is drinking a lot less milk these days. He said he considers the higher prices and has cut back on his kids' milk consumption. But between work and family obligations, he still drives almost as much as he used to.

"That's the reason I cut down on milk consumption - so I can drive my car," said Norris.

And Norris should know. He's the director of wealth management for Oakworth Capital Bank and a food price expert.

The Norrises aren't the only family getting pinched at the grocery store. Prices of food and non-alcoholic beverages rose 4.7 percent since the beginning of the year through November, outpacing the 4.3 percent increase in the overall cost-of-living, according to the federal government's Consumer Price Index.

Everyday foods like fruits and vegetables, beef, poultry and cereals are on the rise. The price of milk is the biggest culprit, with a staggering increase of 23.2 percent through November. And with basic foods like dairy and wheat driving up the cost of other groceries, almost everyone is feeling the squeeze.

Families with children, who typically go through a couple gallons of milk per week and spend hundreds of dollars on other groceries, are especially vulnerable.

"Kids need a lot more food than we do," said John Mulhern, a grandfather and one of several shoppers who spoke to CNNMoney.com outside a Key Food grocery in Brooklyn. "So your hearts go out to young families, especially [those who] have multiple children. They're the ones who are hurting the most with the rising prices."

Marie Thompson, a mother from Brooklyn with a couple of kids in tow at the grocery store, said she spends hundreds of dollars a week on groceries, including two gallons of milk.

"It seems to me that I spend more and more every week on food," said Thompson. "It's hard, because I have three children at home so there are five of us to feed. Beef is very expensive. The milk is very expensive. Even the butter has gone up."

Even with gasoline prices soaring, milk still tops gas prices. The nationwide average for a gallon of whole milk is $3.80, according to the U.S. Department of Agriculture. That dwarfs the nationwide average of $2.99 for a gallon of unleaded, according to AAA.

"A lot of basic foodstuffs seem to be going up and dairy products are going through the roof," said Norris of Oakworth Capital.

It's not just milk-drinking kids - coffee drinkers are taking a hit from higher dairy prices as well. Back in August, Starbucks Corp. (SBUX, Fortune 500) chief executive Jim Donald blamed "rising expenses, particularly higher dairy costs" for a 9-cent rise in the price of coffee drinks. For the first time in three years, Starbucks reported a 1 percent drop in customer visits to their stores, even as the value per transaction increased 5 percent.

Many retailers, including industry leaders like Wal-Mart (WMT, Fortune 500), absorb the initial cost increases for basic food items to stay competitive, said Charles Cerankosky, food marketing analyst for FTN Midwest Securities Corp.

"For things that are purchased day after day like milk, retailers take a more judicious view about passing it on," said Cerankosky. "You don't want to be looked at as the guy who started raising prices."

At first, retailers keep down prices for "high visibility" items like milk and make up for it by increasing the price of other items, like apples, said Cerankosky. But this is just a temporary measure, and eventually the price of milk will go up anyway, he said.

Of the Brooklyn shoppers interviewed for this story, none of them said that they were eating less, but a couple of them said there will be fewer Christmas presents under the tree this year. Santa's tightening his belt, so the kids don't have to.

But if price increases continue into 2008, families will have an even harder time stocking their pantries.

"I do expect food prices to keep going up," said Norris of Oakworth Capital Bank. "Let's just keep our fingers crossed that we're not going to have another year like this year."

Food and beverage stocks

Racket exposed by John Sugg CL

It would be the most ironic of ironies, but we'd probably be too dehydrated to laugh.

Should Atlanta plum run out of water – even though the state says we've prayed enough to avoid it – we'd most likely turn to the dolled-up, overpriced, bottled variety. And how rich it'll be when folks learn that often what swishes around in the plastic container is a slightly altered version of what we were watching dwindle away all along.

Like Dasani. The Coca-Cola brand is the second best-selling bottled water product in the United States, right behind Pepsi's Aquafina. And both are, essentially, glorified tap water. Dasani, for example, is the product of what the company calls "reverse osmosis." According to a dazzling animation on the product's website, water is taken from a municipal source – which usually means it's the same water the local community also uses. It is then filtered, purified, treated and tinged with trace minerals such as potassium chloride, salt and magnesium sulfate. Voila – Dasani.

And right up in Marietta, just before where U.S. 41 crosses Canton Road, the soda-pop giant has a plant where humdrum municipal water, pulled from Lake Allatoona and the Chattahoochee River, is morphed through the process, bottled and then shipped throughout the Southeast.

"If people in Atlanta knew that they need to go to the store to buy bottled water because they're asked to conserve, and find out they're buying [municipal water] that's bottled in a Marietta plant ..." says Gigi Kellett of Corporate Accountability International, a big-business watchdog group. "And then these corporations are turning around and selling it to these individuals when they're taking it directly from their source."

This summer, Kellett's group influenced Pepsi to agree to change its labels to more accurately reflect the water's origin. Coca-Cola has said it doesn't think Dasani consumers are confused about the source and continues simply to label the water as "purified."

According to Marietta Power and Water, the Marietta facility at 1091 Industrial Park Drive used nearly 8.4 million gallons of water in November. That's a huge improvement from the same month last year, when it gulped 9.8 million gallons, and a far cry from the Pepsi Gatorade plant in southwest Atlanta – the city's biggest water user – which gobbled up 70.8 million gallons in September alone. The only customer in the Marietta district to top Dasani's consumption was Tip-Top Poultry, a chicken plant three miles down the road. Wellstar-owned Kennestone Hospital followed.

Commercial water users in Marietta get a sweet deal by paying less the more water they use. There is a graduated grid of rates. The first 2,000 gallons a commercial user such as Coca-Cola uses cost a total of $10.61; once that usage reaches a million gallons or more a month, the company pays $2.02 per 1,000 gallons.

Use more, pay less. It's a pricing structure that stands to change later this month when Marietta Power and Water's board considers doing away with the different block systems and charging a flat rate to commercial customers. The Metropolitan North Georgia Water District has urged municipalities to adopt such conservation pricing, but most of them are just now getting around to doing so.

Bottled water is one of marketing's great success stories. According to the Pacific Institute, an Oregon-based environmental-policy center, the $15 billion industry is enjoying tremendous annual growth: 10 percent every year, far outpacing paltry gains for fruit drinks and soda. And water's a moneymaker, too; it doesn't cost much to buy and industry analysts have predicted that after advertising and production, bottled water makes double the profit of carbonated beverages. A 1.25-pint bottle of Dasani costs $1.19 at a local gas station. Compare that with the $2.02 Coca-Cola pays for 1,000 gallons of municipal water to bottle it.

"We have to ask ourselves," says Allen Hershkowitz, senior scientist at the Natural Resources Defense Council, "is it fair to subsidize a company with public water supplies that they then turn around and market, at a time when those public water supplies are at crisis levels?"

The drought has hit at a time when Coke already is embroiled in an international controversy over water rights and findings that global warming may be exacerbated by the plastic industry's energy-intensive business plan. That recently added to a backlash from water works in the United States that launched a massive PR campaign aimed at informing the public that tap water wasn't just safe to drink, but vitally important in terms of health, quality of life and economic development.

And while Gov. Sonny Perdue in late October ordered municipal water providers to cut back 10 percent compared with their average consumption prior to the drought restrictions – a goal that Atlanta and DeKalb County failed to meet – there's still neither a deadline for compliance nor a penalty for missing the cuts.

But records show Dasani cut back and did its part. Coca-Cola, as well as big water users, already are cutting cut back. The company says it's done so at the Dasani plant and across the board, claiming conservation programs since 2002 have cut its water use worldwide by 19 percent. Coke spokeswoman Michele McKillip says the Marietta facility – which also bottles Coca-Cola Classic, Sprite and other drinks – had already reduced water use by 8 percent from 2005 to 2006 and was continuing to cut back by using air-powered rinsers, fixing leaky pipes, ceasing truck washes, and using "dry lubes" on the conveyance line.

"Coca-Cola takes the drought very seriously," McKillip says. "And we share the state and community's concerns. The issue of water is something we've been looking at for a long, long time."

Late Thursday night last week, visible through a plate-glass window to motorists driving by, the bottling operation was humming along. The bottles were in motion. And in the parking lot sat another idling tractor trailer, ready to roll out more of that purified water.

the fraud that is ethanol

The price of corn per bushel has doubled in the past year, which is great for grain farmers – but not-so-good for livestock producers that count on cheap, corn-based feed for their cattle, hogs and poultry.

AFP reports that “registered Angus breeder Jim Skinner said soaring grain and fuel prices have led to a 40 percent rise in expenses.”

And we all know the main cause of the inflated price of corn – everyone say it together now – ethanol. That’s right.

“Ranching consultant Bob Loucks has added his voice to the chorus of critics claiming the government is unfairly underwriting ethanol at the expense of animal producers, in essence pitting one agricultural sector against another,” the AFP continues.

“Ethanol sucks,” Kevin Kerr put bluntly. “Corn is overbought on the weekly and daily price charts and there is a decent size gap below the market, close to the 50% correction level.”

Many factors are working together that could dampen the over-enthusiasm that traders have been showing corn, including a lower crude price, an oversold U.S. dollar, and harvest pressure.

And the AP reports that ethanol stocks fell yesterday across the board, with several reaching 52-week lows. “A glut of product, limited blending capability and high corn prices continue to overshadow recent enthusiasm about the industry.”

Clearly, some people are catching on to the fraud that is ethanol...but that’s not going to stop the government for dumping money into the industry. They’ve already thrown billions of dollars of taxpayer money at ethanol – so even if you’ve known all along what a fraud ethanol is, you’re still ‘invested’ in it.

Keep reading to learn about 4 rock solid safeguards against the hailstorm of hype ahead:

Milk higher

As high as gas prices are, milk is more expensive. And the high prices for both can be traced to the high cost of another commodity: corn.

Just a year ago, quite a few dairy farmers were calling it quits. The fuel and grain needed to run a dairy were getting more expensive, and farmers were getting such low prices for their milk that it was hard to make ends meet. So some cut back their herd sizes or sold off their cows and got out of the business altogether.

What a difference a year makes. Feeding cows still isn't cheap, but this year, milk prices are rising to near-record levels and farmers are hoping to see more income.

Higher milk prices mean customers are paying more at Amy Green's ice cream shop in downtown Lincoln, Neb. A small cone will set you back $3.50 before tax – up from $2.95 just a few months ago.

Green said she's now paying an extra $150 a week for the rich butterfat she uses to make old-fashioned, slow-churned ice cream.

"I've been serving ice cream for 23 years, and it's really hard for me to say that it will be $16 to a family of four for, you know, four cones. It just feels wrong. But I have no choice," Green said.

The retail price for a gallon of whole milk tops $3, and experts predict it will soon set a new record.

Several factors are creating a sort of "perfect storm" for milk prices this summer. Americans are drinking more milk. Add to that, droughts in major milk-producing countries like Australia.

But another key factor is the demand for ethanol, according to Chris Galen, a spokesman for the National Milk Producers Federation. Ethanol is increasingly being used as an alternative fuel for gasoline.

"Everyone is paying more for feed; and it's not just corn," he said, noting that the increase in corn plantings means there's less acreage available for soybeans and for alfalfa. "So the products that go into cows that make milk are much higher than they've typically been in the past."

One year ago, it cost about $2 for a bushel of corn. Now that price has nearly doubled.

Galen says when you pile that on top of high fuel prices and last year's low milk prices, it has been hard for the dairy industry to respond to the growing demand.

It's a warm summer afternoon on Lowell Mueller's dairy farm about 70 miles north of Lincoln. Wearing a red and white baseball cap and a short-sleeved plaid shirt, Mueller and a farmhand usher a new group of cows — eight at a time — into the small barn that holds his milking machines.

He considers himself one of the lucky ones because he grows his own corn, soybeans and alfalfa. But even he struggled last year to make back what he was spending to produce milk. Mueller says he's hoping things will improve this year.

"Milk prices are a little higher, but unfortunately our costs have gotten a little higher too. So it's always tough to keep up with all the escalating costs," he said.

Industry leaders predict milk prices could top out this summer at about $4.60 a gallon, which just might make a gallon of gasoline look like a bargain.

'Food vs. fuel' debate roils popcorn country

By Amy Lorentzen
Associated Press
Published on: 08/03/07

Johnston, Iowa —- Ethanol producers are clamoring over food industry claims that prices on everything from popcorn to soda are skyrocketing because of the rising demand for corn to make the renewable fuel.

Ethanol backers in Iowa focused their ire on the industry, particularly popcorn, during a news conference Wednesday.

"We're here today to pop the popcorn propaganda bubble," said Monte Shaw, executive director of the Iowa Renewable Fuels Association.

Standing in front of 11 large plastic bags containing 38.5 pounds of popcorn, Shaw claimed a person could buy that amount directly from a farmer for $5. He pointed to a bag of movie theater popcorn on a nearby table and said it costs the consumer just as much, if not more.

Some food companies argue that escalating corn prices, sparked by the increasing demand for ethanol, have forced them to raise prices for items containing corn, including meat and dairy products from animals that are fed the grain. It's been dubbed the "food vs. fuel" debate.

When it comes to popcorn, Shaw said, recent claims that moviegoers will pay 25 cents more per bag of popcorn because of the ethanol demand is ridiculous.

The $5 bucket of movie popcorn, he said, contains just 0.15 of a pound of corn before popping. Based on the 9-cents-per-pound rate that farmers made on the corn last year, that bucket contained slightly more than a penny's worth of popcorn, he said. Higher corn prices mean the moviegoer is getting about 2 cents worth of popcorn per bucket, he said.

"It just shows that there's no way that small increase in the price of popcorn that the farmer gets justifies the large increases that they're talking about at the movie theater," Shaw said. "And this is true for so many other things."

For example, a six-pack of soda contains just 6 cents worth of corn sweetener —- or about a penny a can, said Craig Floss, chief executive of the Iowa Corn Promotion Board and the Iowa Corn Growers Association.

"So if your six-pack of soda is going up any more than about six cents in this food-vs.-fuel debate, then somebody else is profiting, and it certainly isn't the huge profits going to the Iowa corn grower," he said.

Tracy Boever, a spokeswoman for American Pop Corn Co. in Sioux City, Iowa, which makes the Jolly Time brand, said the company hasn't been blaming anyone for higher prices, but "the fact remains that there are only so many acres of land and the popcorn industry, along with others, are competing for those acres."

The company's president, Garrett Smith, recently told the Des Moines Register that the demand for corn has led to a 65 percent increase in contract costs to get farmers to plant his product —- the highest increase he has seen in 30 years.

"The reality is that we have not raised our prices, nor do we set movie theater concession prices," Boever said.

Shaw said consumers should instead look at transportation costs when it comes to rising food prices.

"So with the price of gasoline going up, and the price of diesel fuel going up, that probably has a bigger impact on the price at the grocery store and the movie theater than what the farmer is getting," he said.

Not Made in China

Amid growing awareness of food perils, companies that spotlight where ingredients originate are enjoying new demand

Earlier this year, Swiss ingredient maker DSM Nutritional Products launched a "premium" Vitamin C. The marketing gambit: It comes from tidy Scotland instead of sprawling China, which provides 80% of the world's supply. But it was a tough sell. "We were struggling to get the price we thought was justified by the quality," says communications chief Alex Filz.

No more. Not after contaminated products from China ended up on supermarket shelves. Suddenly, "Not Made in China" has become a major selling point. DSM's Quali-C brand is flying out of its Scottish factory at more than double the price for bulk Vitamin C. "It's a tremendous business opportunity for us," says Filz (see BusinessWeek.com, 7/13/07, "China: Due for a Reality Check?").


In the midst of the imported food crisis, companies are finding clever ways to cash in. Some, like DSM, are playing the "not from China" card. Upscale New York grocery Fairway reassures consumers that none of its seafood is Chinese. Others see a growing business in making this global supply chain safer. One big player: IBM, which is pushing systems to trace the food supply from source to market. "Whenever there's a crisis, there will always be a silver lining for someone who can help alleviate whatever pain is out there," says crisis consultant Gene Grabowski, senior vice-president of Levick Strategic Communications.

Secaucus (N.J.) specialty dog food producer Freshpet found that silver lining. At the end of last year, it was selling its premium all-natural blend of meat and vegetables in a mere 200 stores. Most retailers said the idea was "interesting" but didn't bite, recalls co-founder Scott Morris.

Then pets began dying and, beginning in March, dozens of products were recalled because they might contain melamine from China, an industrial chemical. Freshpet threw out its only overseas ingredient, a protein component from Europe, and quickly ramped up its marketing. It printed big stickers for retailers to put on the refrigerator cases where its products are stocked, highlighting that the food was made daily with fresh, local ingredients. All of a sudden, the retailers who had given Freshpet the cold shoulder "started calling," says Morris. Now, roughly 1,000 stores offer its dog food, with another 1,000 coming by yearend. Projected 2007 sales have more than tripled to nearly $50 million. "Sometimes you're good--and you get lucky," he adds.

With today's global food supply, however, eliminating every particle from China is impossible for most major food companies. Even a simple product like a cereal bar contains ingredients from India, the Philippines--and China, which now supplies the bulk of the world's vitamins, apple juice, and other goods. "I think most people are surprised by the diversity of the sources," says ingredient consultant Peter Kovacs.

Instead, the latest woes have many food giants scrambling to ratchet up efforts to ensure the safety of imported ingredients. That's providing a big boost to a host of companies aiming to help with the task. While Kellogg's has long had systems in place to monitor its global food chain, for example, it has arranged additional third-party audits of its suppliers. Many companies are also broadening the list of things they're analyzing. "One of the reasons melamine slipped through is that no one knew to test for it," says Grabowski.

This increased scrutiny is good news to Gene Rider, North American consumer goods vice-president of Intertek Group PLC. Operating in 110 countries, with headquarters in London, the company offers a complete quality system for clients ranging from Kraft Food Inc. and Unilever to Nike and Microsoft Corp. Intertek will evaluate and train suppliers, test products, and provide other services. Since the latest bans and recalls, inquiries have more than doubled, says Rider. "Companies are increasingly asking to outsource their quality programs," he says. "It's tremendous for us."

IBM also sees a big opportunity in this market. One of the key steps to putting safe food on the dinner table is tracing the entire path of ingredients and products from fields and factories to grocery store shelves. Such a system sounds like a no-brainer, but in practice it's difficult, requiring sophisticated markers and software. "It's a global-information management problem," says Guy A. Blissett, head of consumer products at the IBM Institute for Business Value. The tech giant is trying to capitalize on that demand by providing the tracking tags and sensors to monitor shipments or processes, as well as the computers and software to make sense of it all.

Not only does such a system help boost safety and quality, says Blissett, it enables a company to offer up premium products. It's possible to document, for instance, that beef was grown without hormones, or that yogurt contains the advertised bacteria--and thus be able to charge a higher price.

Already, retailers overseas have found big profits by giving consumers just that kind of information. After outbreaks of Listeria bacteria and other tainted food in Europe, French hypermarket chain Carrefour created Quality Line products, which come from local farmers who have agreed to tough quality standards. The products are now offered in 15 countries and are increasingly popular. In Belgium, where feed contaminated by dioxin was fed to livestock, 98% of beef and 56% of pork carry the Quality Line stamp. Shoppers appreciate the extra assurance. "Whenever there is a crisis, our performance ends up being much better than that of competitors," says Roland Vaxelaire, director for quality, responsibility, and risk management at Carrefour in Paris.

For now, big U.S. chains are just beginning to move in that direction, with certified organic foods and produce labeled with the country of origin. But Blissett says a high level of interest is fueling his business. "Consumer product companies are realizing that, to be competitive, they need to have a robust traceability system." And IBM isn't just waiting for the market to develop. Recently it has tried aggressively to drum up customers with the help of a survey showing that nearly 40% of consumers are already changing what food they buy because of safety concerns.

In recent years, food producers have been under relentless pressure to buy ingredients at the lowest price. That, inevitably, led them to China. Now, says DSM's Filz, they increasingly are "moving away from decisions made just on price to something like a stamp or seal." No surprise then that DSM is creating such a seal, which would guarantee the quality, reliability, and traceability of its products. That's good for safety--and for DSM's business.

Popcorn prices popping thanks to ethanol boom

Tue Jul 10, 2007 2:27PM EDT

By Christopher Doering

WASHINGTON (Reuters) - A trip to the local Cineplex may become even pricier soon thanks to surging popcorn costs.

U.S. popcorn prices have risen more than 40 percent since 2006 as soaring demand for feed corn to fuel the ethanol boom has spilled over into the favorite snack of American movie-goers.

Companies that purchase popcorn each year, as opposed to larger crops such as corn and soybeans, are confined to choosing among a relatively small number of suppliers. This makes it important for popcorn companies to offer competitive prices and forge good relationships with farmers.

"I think (ethanol is) going to have a uniform effect on all geographical areas that produce popcorn," said Dennis Kunnemann, president of AK Acres Popcorn, which buys, processes and then sells popcorn to distributors, packagers and snack-food retailers.

"This year, we've paid the highest price ever that I've contracted for, 13 cents a pound," compared with 9 cents per lb last year, Kunnemann added.

The family-owned company in Imperial, Nebraska, has passed its increased cost on to customers by signing new contracts for between 18 and 20 cents a lb, up about 40 percent from 2006.

AK Acres also has helped in the ethanol boom by selling land next to its facility for the construction of an ethanol plant slated to begin later this year.

Americans consume 4 billion gallons of popcorn annually, totaling 13.5 gallons per person, according to the Popcorn Board, which promotes the industry. An estimated 70 percent of the snack food is consumed in homes, with the remaining 30 percent eaten at theaters, stadiums and schools.

Since most of the world's popcorn is grown in the United States, it seems fitting that American movie-goers and retail shoppers consume more of the snack than their counterparts in any other country.

U.S. ETHANOL OUTPUT ON TRACK TO DOUBLE

At American Pop Corn, which makes Jolly Time Pop Corn, the 90-year-old company has increased the price tag for bulk items 20 percent from a year ago, and smaller bags between 1 and 4 lbs were increased 10 percent in June. The increase has helped buffer a 63 percent jump in the price it now pays for seed.

Greg Hoffman, vice president of production at the company, said the industry is holding off price hikes on microwaveable bags "in anticipation of what this final impact on ethanol will really be."

U.S. corn prices have risen to $3.38 per bushel from around $2.40 per bushel at the same time in 2006. This year alone, ethanol is forecast to consume 27 percent of the 12.5 billion-bushel U.S. corn crop, the U.S. Agriculture Department has estimated. That compares with 21 percent of last year's 10.5 billion-bushel corn crop going to ethanol.

U.S. ethanol output is on track to double to more than 12 billion gallons a year by the end of this decade. There are 117 distilleries in operation now in the United States with annual capacity of 6 billion gallons. Projects with 6.5 billion gallons of capacity should be completed within two years.

The surge in corn prices has lead several popcorn growers to shift some of their acres into corn. Don Villwock, an Indiana grain farmer, planted white corn this year on 200 acres of land he used for popcorn in 2006.

"The price run-up in corn made the decision for us," said Villwock, who also is president of the Indiana Farm Bureau. "There was a period in January where we did not think we were going to plant any popcorn, but the (buyers) responded with a price increase, and I'm glad they did," he added.

Kevin Poen, an Iowa farmer who sells between 200 and 300 acres of popcorn to packaged-foods maker ConAgra Foods Inc. (CAG.N: Quote, Profile, Research), said he is closely watching corn prices to gauge how much he will receive for his popcorn, which usually moves lock-step with corn, in the future.

"If prices go up, I'm sure they're going to offer me more for my popcorn next year," said Poen. "They all got to compete for acres."

Milk builds bones, breaks wallets

Prices surge toward record highs set in June 2004

By ELIZABETH LEE
The Atlanta-Journal Constitution
Published on: 06/20/07

Sticker shock at the gas pump is almost routine. But at the dairy case?

Get ready. Milk prices are nearing record highs set in June 2004, and there's no sign yet of leveling off.

At metro Atlanta's three largest grocery chains on Tuesday, the cost of a gallon of store brand whole milk ranged from $3.69 to $3.79. Retail prices have been edging up for weeks, following soaring prices paid to farmers.

Karel Burns, shopping with her three children recently at a Kroger near Marietta, has noticed the run-up.

"I'll go wherever it's on sale," says Burns, who buys up to four gallons each week.

Food prices are rising across the board, spurred by higher demand for corn, used to produce ethanol as well as livestock feed and many processed foods.

Milk costs are increasing even faster, for reasons that include a drought in Australia, tighter supplies from the European Union and higher demand for milk products, such as whey for food processing. Americans are drinking more milk, too, with the first consecutive years of increases since 1990.

Dean Foods Co., the largest milk processor in the United States and owner of the Mayfield Dairy Farms brand, recently scaled back its earnings estimates for 2007 because of high raw milk prices. The company told analysts this month that it expects those prices will reach record highs by the fall before moderating.

The federally set minimum price that processors must pay to U.S. farmers has increased 66 percent in the past year, according to the International Dairy Foods Association, a trade group for dairy processors.

Retail prices typically don't rise as steeply. Manufacturers and supermarkets may not pass along all of their increased costs, especially grocery stores that use low milk prices as a way to bring in shoppers, says Ephraim Leibtag, an economist for the U.S. Department of Agriculture.

Estimates vary on how much more consumers will pay by the end of the year. Leibtag predicts 15 cents to 30 cents more, but says that could increase if farm prices pass record levels.

Prices are also higher in the Southeast, with fewer dairies and thus greater transportation expenses for milk. Southerners paid an average of $3.69 a gallon in May, 43 cents higher than the national average.

To keep costs in line, Carrie Price of East Cobb switched the type of milk she buys. She plans to supplement with cheese to make sure her three daughters get enough calcium.

But the price of foods that contain milk, such as butter, ice cream, yogurt and cheese, also is going up. At $3.79, a gallon of milk costs 40 cents more at Publix than it did six weeks ago. Suppliers' prices have risen for each of the past three months, and Publix expects another increase in July, says spokeswoman Brenda Reid.

In early May, Publix switched to milk free of synthetic growth hormones, a type of milk that often costs more. The higher prices for milk aren't connected to the switch, Reid says. At Kroger, which stocks conventional milk, a gallon of store brand whole milk also costs $3.79.

Whole Foods Market, which also owns Harry's Farmers Market, is holding the line for now at $2.99 a gallon for milk, says spokeswoman Darrah Horgan.

Leibtag, the economist, says prices may vary significantly depending on where you shop.

"Some companies will continue to use milk as a loss leader," he says.

Burns is willing to change where she shops to get a better price, but doesn't intend on altering her family's diet.

"I'll still buy milk," she says. "It's a necessity."

The benefits of global warming

If there is one thing I have learned over the past twenty years or so its that any time the government declares an emergency you’d better hang on to your wallet. So let me be the first to say, “hold on to your wallet” now that the current crop of legislators have taken up the mantel of global warming.

In the future, global warming and all the accoutrements that go along with it, is going to be the biggest cash cow in many a generation.

When the government starts doling out all of its subsidies and favored status to the myriad hucksters and schemers that are beginning to crop up like mushrooms, rest assured you as the tax payer and consumer will be the one who inevitably feels the pain.

As the national hysteria gains in volume the level of handouts will increase exponentially. Every quack concept or invention supposedly designed to decrease our level of energy dependence will be met with ringing endorsement by some Senator or congressman, with most of these boondoggles never showing any benefit or proof they actually perform the function they were sold to do.

Fortunes will be made in the alternative energy business and long after many of these harebrained schemes are uncovered as fraudulent the perpetrators will be sipping margaritas on a beach somewhere in the Bahamas.

A new boom will surely follow just like the tech boom which preceded it, this time instead of dot com it will be any stock with the word “alternative” in it that goes through the roof. Millionaires and billionaires will be created overnight who will then wind up in the poor house in the inevitable bust.

The ones for whom a few million in stock options aren’t enough will ride the wave all the way up until the point they end up doing the perp walk ala Bernie Ebbers and Ken Lay for bilking their companies retirement funds and assorted other larcenies. There will be a few of those for sure.

But the people who will suffer the most, as is always the case, will be the ones who can least afford it. Even now, because of the fraud that ethanol can lower the cost of gasoline; any product containing corn will be higher this year at the grocery store. Not only will products containing corn be higher (practically all soda contains corn syrup), but so will dairy products. The demand for corn has dramatically increased, since now it is seen as an alternative fuel and the increased pressure has in turn doubled the cost of feed for livestock. Increased feed costs equal increased production costs for milk, cheese and any other dairy product that ends up in the grocery store. This has already begun to happen.

With the demand for corn sure to escalate, more farmers will plant corn which means that less grain will be farmed, that will in turn send up the cost for bread and any other grain dependent products. The trivial amount of ethanol production will have little or no impact on the price of gasoline, but the impact of higher demand for corn will have a substantial impact on prices at grocery stores nationwide.

Ethanol is just the first of many usufructs that will be foisted onto the citizenry as the United States engages in it’s charade of weaning itself from oil and reducing CO2 emissions. None of these measures will be successful or even very serious until Americans are forced to change due to oil being altogether unavailable. But the issue as always will be dolled up in flowery language and will most assuredly be for the benefit of the children and big business will jog for position at the trough of government contracts and handouts while the taxpayer will take it in the wallet.

http://thedailyobfuscation.blogspot.com/2007/07/popcorn-prices-popping-thanks-to.html