Smucker Hikes Coffee Prices For 4th Time In A Year
It may be time for the CME to hike some coffee margins as prices for the legal drug are starting to get out of control. According to Dow Jones, Smucker has just increased its average coffee product price by 11% in its 4th price hike in just the past year. This, along with all other comparable deflationary developments (according to some) could not have been foreseen by anyone, and will lead to the Fed's Elizabeth Duke discussing next year how, very inexplicably, America's low and middle classes are forced to choose between espresso shots and toilet paper.
From Dow Jones:
The food company, which also makes jams, jellies and Jif brand peanut butter, said the move is driven by sustained increases in green coffee costs. It disclosed similar price increases in February, August and last May.
The increase applies to such brands as Folgers, Dunkin' Donuts and Millstone.
Smucker reported an 11% increase in U.S. retail coffee sales for the nine months ended Jan. 31, while profit during that period grew 12%. But the commodity is being stung by higher prices for coffee futures due to strong demand in emerging markets, disappointing harvests and speculative trading. Those factors have led retailers to increase prices in order to pass along some of the cost to consumers.
Look for Goldman to lower its coffee price target imminently on the "global supply/demand outlook", promptly followed by a price target hike a month later on the "global supply/demand outlook."
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