We have seen the "news". If it is still news that the stock market is tanking, that people have no confidence in the economy, that the housing lending market is a disaster. Global crash. Not to make too light a thing of it, but the next thing you know, the Grinch will be stealing Christmas. Again!
At least gas (petrol) prices are dropping.
Seriously, I am trying to predict how all this will affect the potato industry. What will processors' business look like in 6-12 months? What about their customers and suppliers?
I have heard that there has been a small drop in processed potato product consumption, but no big deal. Makes sense. People need to eat, and that will not stop, recession or no! And, really, potato products are a super value for the calorie, plus a real "comfort" food, they taste great! It seems that the market for potato products will not drop much, maybe even increase a bit, no?
Plus, with the drop in fuel prices and the drop in corn and veggie prices, prices for raw product will also settle back down a bit, yes? And that may ease the squeeze, so to speak...
Who knows, maybe profits could actually go up...
So I, for one, will go on record as predicting that the current economic situation will not be disastrous for the processed potato market.
NOW: I need some commenters who have other opinions. Speak UP!
Tim
Friday, October 24, 2008
Potatoes vs. The Economy
Subscribe to:
Post Comments (Atom)
1 Comments (Click Here to View or Comment):
If I could paste in a comment from David Brenchley of Potato Processing International (Crier Media), who sent me the following via email:
"I do not think we will see a slowdown in this industry, generally speaking. As an average the global crop was good both in volume and quality and in a downturn, this sector will probably benefit.
The first aspect that I find of concern is that we can expect retail price wars in most of the world. Certainly this has been a feature recently and I would guess that will intensify.
I would expect a lot more price cuts and ‘bogof’ deals by supermarket groups and I am always irritated when such groups bray on TV “Are we doing a deal or are we doing a deal”. We all know who really pays for those deals – the suppliers.
Many are strong enough in our sector to resist such demands or even make them work to their advantage and I hope that will be true across the whole industry.
Then there are the QSR chains. Perhaps they will follow similar paths.
The second aspect continues that train of thought. We have seen in many sectors of industry, some of the bigger players using price to drive out weaker competitors. That could be a more prevalent factor perhaps and in the present climate can be ‘quantified’ by those embarking on such a course as chain pressure.
I do hope not as there are many potential advantages for the industry as a whole."
Cheers, David, and thanks for contributing.
Tim
Post a Comment