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
Tuesday, October 21, 2008
More on Acrylamides
Check out the article: http://www.foodqualitynews.com/Publications/Food-Beverage-Nutrition/FoodNavigator/Science-Nutrition/Acrylamide-not-linked-to-GI-cancer-risk-Study/?c=%2BlZ8zGql8mrmAmsDCii%2FSA%3D%3D
Now, I know we are in uncharted territory here, and that prudence is highly advised. After all, cancer is nothing to trifle with, so anything we do to avoid it seems reasonable, no? Food is to preserve life, not risk it!
But.... if there is actually no evidence that normally ingested food products increase the cancer rate in actual humans (and I am NOT talking about humans who eat 20 kg of potato chips in a day), what is the real risk? If it is down in the realm of getting hit by an asteroid, it seems that overreaction has taken hold here. Note that most of us do not regularly carry asteroid umbrellas, we take the risk for what it is. Even if the small chance of being wrong has quite severe consequences.
Now, the recent California litigation (see below) is government-driven, so I don't expect them to be constrained by any real facts. Rather, I expect that situation to continue for some time. But for the rest of us non-Californians, we had better be asking the tough questions and doing our homework regarding acrylamide and food safety. Because the risk either way seems significant in terms of both food safety issues as well as the sustainability of the processed potato market.
Tim
Wednesday, October 1, 2008
The Golden Potato!
Potato prices are going through the roof!
Some articles to reference (I picked them from potatopro.com):http://www.capitalpress.info/main.asp?SectionID=67&SubSectionID=618&ArticleID=44834&TM=51257.21 and http://www.potatopro.com/Lists/News/DispForm.aspx?ID=1862&Source=http%3A%2F%2Fwww%2Epotatopro%2Ecom%2FNews%2Easpx
Now, I have to say I have had my fill of high grocery prices as a result of the US ethanol debacle. I am all for "green", but when you use more energy to produce a renewable source than is produced, you are going the wrong direction. And then to have consumers (and taxpayers) ultimately foot the bill for this kind of shell game, you start to get me riled.
Now the problem is spreading to potatoes. Exacerbated certainly by the weak US dollar and the skyrocketing price of petroleum. It is a brave new world, folks, and we need to see how things readjust to fit.
It seems certain that raw potato prices will drive finished goods prices up, or processors will lose interest in their work (reducing supply, which will then certainly drive prices up, uncontrollably). So how do processors respond?
1) Raise prices of their products.
2) Work even harder on projects that improve yield. The higher raw prices get, the better the payback for yield.
3) Move away from potato processing into other, more profitable ventures. Pressure will drive the weaker players from the field.
We need to look closely at how plants are run, investigating every opportunity for efficiency gains. Gone are the days of casually letting product pile up on the floor at spill points, or responding sluggishly to equipment downtime. Those who learn to address these kinds of issues aggressively may be making the difference between profitability, survival or otherwise...