Saturday, 15 October 2011

Peanut Butter Price Wars?

Nuts to all, I'll Take the Rice!

Being a fan of frugal living, fast news, price checking and social media, I easily spotted a 'tweet' that said,

"If you love peanut butter, stock up now before peanut prices soar. It’ll drive you nuts if you don’t!"

I was compelled to respond, as their attached link led to an article stating The Wall Street Journal had reported a potential 40% price rise in peanut butter. It was like screaming in blind panic, BUY, BUY, BUY... BUY PEANUT BUTTER NOW!

Nobody can deny that, at this time, Wall Street may well be filled with nuts, but this, to me, is getting ridiculous. The above piece of sensationalised, so-called 'news' is very old hat and I'm not afraid to back up my strong words of condemnation of such scaremongering, be it nuts, bolts or milk prices.

In 1990, I happened to be working in the livestock industry. (Surprise, not!) We traded in bulk feeds - straights, mixes and, you got it, GROUNDNUTS!

As many may know, groundnuts are what most people call 'peanuts'. They grow under ground, hence their name, and they are not, for all we are led to believe, a tasty snack naturally devoured by our native badgers, squirrels, wild birds, cage birds nor, for that matter, parrots. But I digress.

At the start of 1990, 'peanuts' were costing around 86p per kilo, but by the end of that year they were about £1.75 per kilo, pushing retail prices within the pet trade to over £2 per kilo (£1 per lb, I think we charged.) We were buying and shipping by the tonne, so the price fluctuations were felt, I can assure you of that.

By January 1991, the price had slipped by around 25% then, after a brief spike, prices really began crashing. However, the all time high retail prices remained unchanged!

By mid 1992, peanuts were less than 70p per kilo ($778/tonne on the International commodities market), but price fluctuations were as regular as clockwork, bouncing around all over the place, sometimes dropping below 60p per kilo, other times, like January 2008, spiking to highs of £1.70

Now explain to me... why should we be showing any real concern in stockpiling peanut butter simply because the current price of groundnuts is trading within 2p of the prices we were trading in 1990?

Get a grip! The manufacturers and retailers do not fluctuate their prices to reflect current market trends - they simply bump up the prices when their own profit margins are being adversely affected. Compared to other commodities, the groundnut prices have looked relatively stable and I'd be more likely to stack my cupboards full of rice than peanut butter.

In fact, I already have! Rice, in all its forms, is the way to go in the land of Frugaldom.

NB: My prices are approximate, based on UK metric tonnes between wholesalers and retailers within the pet trade. We also need to remember that the US$ to GB£ exchange rate has fluctuated immensely, which also reflects in the current prices, as does transportation. Let's face it, anything travelling here from South America is going to be increasing in price, we just need to look at the escalation in prices of tinned corned beef from places such as Brazil and Argentina to see how this all pans out for the consumer.

The old saying that things cost 'peanuts' is no more!

NYK Media
www.scottishmultimedia.co.uk

4 comments:

  1. Very interesting post. Thanks Nyk.

    Why rice? sorry for being stupid?

    Sft x

    ReplyDelete
  2. Not a stupid question in the least, SFT. Such a GOOD question, that I've posted a second blog to explain my way of thinking.

    Apologies for the lengthy response, but the way in which we are 'actively encouraged' by various media sources to shop (and eat) interests me. :)

    ReplyDelete
  3. The peanut crops in the US supposedly were damaged due to the drought this year so there may actually be a reason to buy up peanut butter while you still can afford it. Beef prices are going through the roof now too.

    ReplyDelete
  4. As expected, offers are beginning to appear on rice, so I hope everyone will take up those offers.

    Having never worked in the wholesale 'raw ingredients' food sector, I haven't a clue how long or what quantity of each crop gets stored - moutains, I'd expect. There may well be a few offers appearing shortly for peanut products, as they replenish any Government stock piles. Like honey, peanut butter normally carries only a 'best before' date, so it has a long shelf life.

    Stockpiling anything with a long shelf life and a price that can fluctuate purely as a result of Mother Nature has to be a good thing, in my opinion. Does anyone know which year's crops we will actually be eating at the moment?

    ReplyDelete

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