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Smucker Hikes Coffee Prices For 4th Time In A Year

Tyler Durden's picture




 

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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Tue, 05/24/2011 - 09:37 | 1304710 hedgeless_horseman
hedgeless_horseman's picture

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."

Funny 'cause it's true.

Tue, 05/24/2011 - 09:41 | 1304725 youngman
youngman's picture

Actually Goldman will raise it in the hours of 6am till 11am..then lower it for the afternoon...then raise it for the after dinner coffee time..then lower again for sleepy time...

Tue, 05/24/2011 - 09:39 | 1304729 Weisbrot
Tue, 05/24/2011 - 09:42 | 1304738 Michael Victory
Michael Victory's picture

speculators..

I like my coffee....

But there are some things to stay away from.

 

 

Tue, 05/24/2011 - 09:59 | 1304805 citrine
citrine's picture

+1

Tue, 05/24/2011 - 09:35 | 1304712 velobabe
velobabe's picture

what the fuck, and this is news. damn coffee stortages.

Tue, 05/24/2011 - 10:27 | 1304899 Sudden Debt
Sudden Debt's picture

Important news!

No Coffee No Workee!!

And as ALREADY +40 MILLION American take this literally, the GOV. must increase margins on Coffee to decrease unemployment!

 

 

Tue, 05/24/2011 - 09:38 | 1304713 lizzy36
lizzy36's picture

Can one have an espresso shot without TP? Just asking because i thought they are correlated.....or perhaps causation is at work on that pair?

Tue, 05/24/2011 - 09:47 | 1304758 DeadFred
DeadFred's picture

Summer is near. Corn husks will be plentiful. Who cares about TP but don't touch my morning coffee.

Tue, 05/24/2011 - 10:06 | 1304797 The Limerick King
The Limerick King's picture

A student from Kalamazoo

Loved coffee, but lacked funds to poo

So the next time he shat

He cleaned-up like a cat

Which affected the taste of his brew

Tue, 05/24/2011 - 10:20 | 1304864 Double down
Double down's picture

First Prize!

Tue, 05/24/2011 - 14:04 | 1305936 andybev01
andybev01's picture

+ ewwww.....

Tue, 05/24/2011 - 11:05 | 1305028 Problem Is
Problem Is's picture

DeadFred: Spoken like a true Midwesterner:

"Summer is near. Corn husks will be plentiful."

Summer memories of corn silk in your shorts...

Tue, 05/24/2011 - 09:40 | 1304719 Henry Chinaski
Henry Chinaski's picture

Long SJM, toilet paper (physical) and coffee (physical) here.

Tue, 05/24/2011 - 10:04 | 1304809 Dr. Richard Head
Dr. Richard Head's picture

Amerika - One cup of coffee away from revolution.

Tue, 05/24/2011 - 10:28 | 1304903 Sudden Debt
Sudden Debt's picture

bummer it's decaf...

 

Tue, 05/24/2011 - 09:38 | 1304724 Dexter Morgan
Dexter Morgan's picture

We need our honorable government to institute price controls across the board!  haha

Tue, 05/24/2011 - 09:51 | 1304762 TheTmfreak
TheTmfreak's picture

We need an "honorable" government to do alot of things. Like Seppuku.

 

Edit: In fact, if we had politicians who did this, I would have a completely different (favorable) view of American politicians.

Tue, 05/24/2011 - 09:39 | 1304726 SilverRhino
SilverRhino's picture

And silver appears to have broken out of the doldrums.  

Tue, 05/24/2011 - 09:54 | 1304783 fuu
fuu's picture

The bidding algos have correlated and trapped the ask algos right now.

Tue, 05/24/2011 - 09:42 | 1304732 monmick
monmick's picture

It's just transitory...

Tue, 05/24/2011 - 09:40 | 1304733 LRC Fan
LRC Fan's picture

I think we need some hearings on this price gouging by "Big Coffee"

/s

Any chance at all that the markets reverse and close lower?  Sadly I think not.  The DXY will maybe rise a bit until noon when it crashes lower as it has for the last few weeks on nearly every single day. 

Tue, 05/24/2011 - 09:43 | 1304734 The Profit Prophet
The Profit Prophet's picture

My God....please let them choose the toilet paper!!!

T.E.I.N. everyone!

Tue, 05/24/2011 - 09:46 | 1304744 John McCloy
John McCloy's picture

VP Joe Biden "Summer of Recovery" Take Two.

Tue, 05/24/2011 - 09:43 | 1304748 Dolemite
Dolemite's picture

Commodities (no coffee yet), FX, equities, disected for your viewing pleasure

http://deadcatbouncing.blogspot.com/

Tue, 05/24/2011 - 09:47 | 1304757 mworden
mworden's picture

In my area it has worked this way: First they raised the price of a can of coffee $3, then they made the can ....smaller. 

 

Thank mammon there's no inflation.

Tue, 05/24/2011 - 09:53 | 1304782 Urban Redneck
Urban Redneck's picture

The only good thing about EU bureaucracy is that makes shrinkage inflation more difficult for producers to implement.  However, since my cheap grocery store coffee is now more than $10 per pound now after a 10% increase this month, that is not much consolation.

Tue, 05/24/2011 - 09:52 | 1304770 LoneStarHog
LoneStarHog's picture

Sorry, I don't have a square to spare...I just want one square...You don't have one spare square?...I don't have a square to spare...Take some Decaf, already!

Tue, 05/24/2011 - 09:49 | 1304771 Jason T
Jason T's picture

I drink Tea... lipton!  bitchez!

Tue, 05/24/2011 - 09:50 | 1304774 Brian316
Brian316's picture

Coffee  Bitchezzzz....

Come on, that should have been the first comment! 

Tue, 05/24/2011 - 10:04 | 1304810 TheTmfreak
TheTmfreak's picture

You see it less and less.

Maybe you should have said "No Coffee Bitchezz" That might make more sense.

Tue, 05/24/2011 - 09:50 | 1304776 Hedgetard55
Hedgetard55's picture

I roast my own beans. You can buy green beans on the web, roast them yourself. I do it in a cast iron frying pan. So simple. Delicious.

Tue, 05/24/2011 - 09:54 | 1304786 LRC Fan
LRC Fan's picture

Maybe you should grab a shovel.  I bet it only costs $5 to dig coffee out of the ground.  Winning!

Tue, 05/24/2011 - 10:30 | 1304912 Sudden Debt
Sudden Debt's picture

? And what do you call it? 50$ DIY COFFEE THAT TASTES LIKE SHIT?

 

Tue, 05/24/2011 - 10:38 | 1304930 Jason_1sandal
Jason_1sandal's picture

An air popper works much better....

Tue, 05/24/2011 - 10:00 | 1304802 LRC Fan
LRC Fan's picture

And this market is ridiculous.  Any move lower is immediately met with a few down ticks in the DXY and a corresponding tick up or two in the Dow.  I'm honestly an idiot for not BTFD yesterday...I'm still short...do you really think this market will be allowed to fall by 200+ pts in a day?  Only if they lose control, and even then you're likely to be screwed if you're holding puts because they will close the market.  Stacked deck...not winning. 

Tue, 05/24/2011 - 10:17 | 1304841 citrine
Tue, 05/24/2011 - 10:05 | 1304821 buzzsaw99
buzzsaw99's picture

Coffee is hot these days, and so are coffee related stocks. People switch to beer in the summer so let's wait for the full year report. Meanwhile I may as well buy some good coffee if Folgers is $10.

Tue, 05/24/2011 - 10:14 | 1304839 wombats
wombats's picture

To the barricades!!  We cannot stand still for this!

Tue, 05/24/2011 - 10:34 | 1304914 Sudden Debt
Sudden Debt's picture

DON'T WORRY!!

 

DO LIKE ME AND SWITCH TO RED BULL IN THE MORNING!!

 

WWHHHAAAAAAARRRhhhhhhhh!!!!!!

Tue, 05/24/2011 - 10:14 | 1304842 Fiat2Zero
Fiat2Zero's picture

Rapidly rising coffee prices may be what we need to get the lethargic American populace to the streets. Expect the comex "espresso massacre" margin hike takedown to be swift and brutal.

A caffeinated sheep is a controllable sheep.

Tue, 05/24/2011 - 10:17 | 1304857 Id fight Gandhi
Id fight Gandhi's picture

Buy the brands that have a money back guarantee. Many of the cheaper store brands have it. Call up and complain say the no only did they raise the price but the taste is worse. Give me a another one free.

Truth is taste may have changed due to formulation or cheaper coffee.

Probably get free coffee for a year working it this way.

Tue, 05/24/2011 - 10:24 | 1304870 serotonindumptruck
serotonindumptruck's picture

Consumers in developed nations will soon adopt the defecation practices of the Middle East. Just don't offer your left hand to shake while meeting new people or closing business transactions, as this is the ultimate insult.

Tue, 05/24/2011 - 10:38 | 1304931 What_Me_Worry
What_Me_Worry's picture

I would not recommend choosing espresso over toilet paper.  That will not end well.

 

Tue, 05/24/2011 - 12:59 | 1305621 topcallingtroll
topcallingtroll's picture

Toilet paper is overrated.

Coffee is a true necessity.

Tue, 05/24/2011 - 13:45 | 1305846 boiltherich
boiltherich's picture

TP=$$$$ just use FRN's it will be cheaper

Coffee=total necessity and there is no substitute.

Tue, 05/24/2011 - 11:01 | 1305011 Problem Is
Problem Is's picture

"America's low and middle classes are forced to choose between espresso shots and toilet paper..."

They can buy a regular coffee at Starbucks and take their crap there...

"The increase applies to such brands as Folgers..."

Wait, I thought Folgers was a sawdust product...

Tue, 05/24/2011 - 11:44 | 1305283 GoldBacon
GoldBacon's picture

I can eat my iPad, but this one is gonna hurt.

Tue, 05/24/2011 - 13:10 | 1305691 Chuck Walla
Chuck Walla's picture

Yeah, but how can I guarantee delivery of my coffee futures?

Tue, 05/24/2011 - 13:46 | 1305850 boiltherich
boiltherich's picture

With a name like Smuckers you know it has to be expensive.

Tue, 05/24/2011 - 16:33 | 1306604 HungrySeagull
HungrySeagull's picture

Ah yes the Trucking will slow or stop as the Drivers pass out from lack of Coffee.

/sarcasm.

Bout ready to start buying coffee by the case and ignore it the rest of the year.

Tue, 05/24/2011 - 21:52 | 1307585 StychoKiller
StychoKiller's picture

French Press to relieve American Distress (over percolating coffee prices!)  :>D

Wed, 05/25/2011 - 02:34 | 1308080 tony bonn
tony bonn's picture

this is sad if it implies inflation....inflation only happens when people expect it to happen....thus everyone needs to stop expecting inflation so that it will go away....and think non-inflationary thoughts....just like the chairsatan of the fed has urged....

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