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J.M. Smucker Boosts Prices On Most Coffee Products By 9%
It took the Fed long enough but finally even it succumbed to the reality of surging food prices when, as we reported previously, it hiked cafeteria prices at ground zero: the cafeteria of the Chicago Fed, stating that "prices continue to rise between 3% and 33%." So with input costs rising across the board not just for the Fed, but certainly for food manufacturers everywhere, it was only a matter of time before the latter also oo threw in the towel and followed in the Fed's footsteps. Which is what happened earlier today when J.M. Smucker Co. said it raised the prices on most of its coffee products by an average of 9% to reflect higher green-coffee costs.
WSJ reports that the price increases primarily impact Folgers and Dunkin' Donuts brand products and exclude products made for single-serve coffee machines. But don't blame it on monetary policy: it's all the weather's fault:
Coffee prices have been elevated amid concerns that unusually hot and dry weather in Brazil's key growing regions will dent coffee-bean output.
Smucker, whose U.S. consumer-foods business includes its namesake fruit spreads and Jif peanut butter, plans to provide more details when its releases its fiscal fourth-quarter financial report on Thursday.
Why wait so long with the price hike? "The company in February had cut its full-year sales and earnings guidance, citing a more competitive pricing environment and lower expectations for sales volume... In the fiscal third quarter, Smucker's U.S. coffee business posted a 2% volume increase, but lower prices helped weigh on sales, which were down 8% in the quarter. The segment's profit, however, grew 4% on lower coffee costs, marketing expenses and manufacturing overhead."
In other words, it could wait no longer, since volumes did not make up for the loss in sales.
And now time for the old bait and switch: boost prices by 9% and at the same time reduce package sizes by 9% in effect lowering the price! So far it has worked with fooling most of the people all of the time. Will it work this time too?
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Addiction is assymetrically expensive. See oil.
Well at least they didn't make the packaging smaller and charge the same price. That type of inflation is far worse.
Or maybe this is because we are getting more "sophisticated" with our diets?
/s
Too bad that swill is made from robusta beans from Vietnam. The whole "bad weather in Coloumbia" meme is just an excuse to raise prices that will never go back down when there is a coffee glut a year from now.
Now Starbucks will need to at least charge about 60 dollars and 5 cents for a normal coffee just to break even...
5 cents for the coffee...
60 DOLLARS FOR THE 4 HOUR SERVICE BECAUSE IT TAKES LIKE FREAKING FOREVER BEFORE YOU GET A SIMPLE COFFEE!!
That's because they put everything behind the counter. 5 people bumping into each other to fill a cup with fluid is not a good model of efficiency. just sayin... I used to work in a coffee shop a long time ago and they (Starbucks) do it all wrong.
Starbucks needs a separate line for people who have their shit together.
These rising prices and the tight squeeze on income have got to start hitting their customer base at some point in time. Won't be too long before they start shuttering stores and more people are out of work. Lots of money out there to inflate the prices of goods but that money never makes its way into salaries fast enough, its too busy being used by the ones closest to the tap to buy up companies and buy off politicians.
But also asymptotic,
Infaltion? No, there is no inflation, other than the essentials such as food and energy. I wonder how lomg the sheeple will continue to accept this BS?
I went to the grocery store this week here in Texas and 1 pound of ground beef was $8.65. I almost fell over. I remember when ground beef was a cheap way to make a fast meal. Thank you, Fed!!
Economists say you'll just switch to a cheaper cut of soy "meat" to compensate. Even Steven.
Soylent green.
Well the fed is working on finding a viable way to print meat. However, I myself would not eat their presented product. I'm sure they would not either. Im guessing it would resemble that "sausage" like hamburger " product seen in stores. You know the one. Sourced from the leavings of 100 cows and shaped like an E.coli.
Miffed;-)
I think Taco Bell has perfected printed meat. It's the vegetabel protein stuff in their "beefy" tacos and burritos.
They have already shrunk the portion size and can no longer hide the inflation with smaller packaging.
You beat me to it Dr....the amount of corn flakes and potato chips I get in a package has been dwindling down every year since 2008!
Dude you should think of that as a blessing in disguise...potato chips and Monsanto corn flakes? ... how about some real food.
Wait- you get more than ONE inside your package? When I go to the store the packaging just says "Potato Chip."
nono, it was hot and dry in Brazil!
A tropical vortex.
You know, your comment got me thinking. See, the .gov likes to adjust stuff for the season, to account for typical hot/dry/wet/cold weather and what not, right?
But if the season is atypical, then perhaps another adjustment, sort of like a second derivative, might be just the trick.
Then, each season, we can seasonally seasonally adjust our economic data so people have more information to make informed decisions about investing, purchsasing, budgeting, and so on.
And I bet that opens up a whole new market for trading said seasonal seasonal dervatives too!
Forward!
Regards,
Cooter
SPOILER: It's turtles all the way down ...
If that doesn't work, the news can always be adjusted. Can you imagine it ever coming to that? /s
Amen Doc. Sadly, as we all know, .gov says this doesn't count as 'real' inflation because it isn't imaginary like the stuff they 'officially' call inflation ...
Hmmm, why do I suddenly feel a wave of nausea coming over me?
Jannet Yellen waves hand..."This isn't the inflation you're looking for."
R E C O V E R Y!
I can't wait until they raise my chocolate ration from 30 grams to 20 grams!!
In Colombia here they have increased exports about 40%....we had a good crop...so they say
exports? Columbia? Coffee... right....
Does reselling Venezuelan goods count towards that?
let the fall begin
One bean for old times sake?
while coffee falls from 2.20 to 1.72; they never lower prices
At any price, it's all crap ! They blend in more of the cheap stuff "robusto" and reduce the amout of the good stuff "Arabica" beans ! But who's counting anyway ?
And J.M. Smucker now gets to hang onto more of their inventory.
This, as we all know, is great for sales out and profitability.
ONWARD!!!!!!
I'm compiling a list of basic foodstuff price inflation for H1 2014. Meat (chicken breast, hamburger) in my area is up 15% YoY.
Bread is up 5%.
Frozen pizzas are up 10%.
Now coffee is going up 9%.
In other important expense areas, my healthcare insurance went up 17%, and gasoline is up about 15% as well.
Won't be long before our criminal President blames the price increases on global warming, and executive orders a carbon tax.
So the Fed's targeting isn't working? At least Paul Krugman will be happy that we are seeing prices rise in food, good for GRP growth and aggregate demand and all of that jazz.
'jazz hands'
Sure will have a favorable knock-on impact on gross tax receipts. No nevermind about killing demand for basic consumer discretionaries. The luxury sgment, on the other hand, is doing just fine. Look @ the fine wine and art auctions @ Sotheby's and Christie's.
What a shitstorm we're heading into.
The Dark Fog of the FEDorama.
With Obamas new EPA regs coming on line...yours and the companies that make that food you eat energy bills are going up 30 to 40%...that will be passed thru soon...
Frozen pizza is up>?! oh noes
Badthink: A carbon tax will only make things more expensive.
Goodthink: Obama taxes us because he cares about our well being!
The proper nomenclature is "climate change." A term to fit all scenarios.
Actually, the current approved phrase is "climate disruption."
We have always been at war with EastAsia.
Anthropogenic Global Warming is the correct and proper description of the phenomenon....
I thought they more than doubled the money supply with their printing, I would expect the prices to at least go up by 50% in the next few years.
it's my understanding that coffee is a crop that responds quickly to supply and demand changes. So these price increases are not likely due to deman, but inflation pure and simple.
Phucking Jews and all their god damn Jew cronies.
Blame Bo! Yeah!
Let's see how many more "deserters" we get when they're all dead.
DA whats up with you. some of those agent orange side effects popping up again?
I think he's got a red line in the sand.
Folgers Red.
Don't screw with my beans.
i see we are overlooking some basic supply demand issues here.....brazil, the worlds largest producer of coffee, has been dealing with a huge drought, and there has been a massive problem with "coffee rust" fungus that is wiping out crops in much of central america. on the whole, ag commidity prices have gone nowhere since 2011. if there is inflation, its not popping up across the board in costs to purchase most commodities.....
Inflation pressures are always present, but when supply declines it becomes impossible to mask.
You don't grocery shop or eat out much do you Kito? Just about every food item has fallen victim to smaller portion sizes and higher prices. A person is lucky if they get a half a box of cereal in their family sized box.
come on doc, i would not expect you to argue past me. where did i say there isnt inflation? my point was clear. there are certain raw commodities that have real supply issues. beef is another good example. and the FACT remains that across the board raw commodity prices have gone NOWHERE in the past 3-4 years.
I'm not trying to argue past you Kito. My take away from your original post was that there was no inflation.
Doc, we have yet to actually feel the full force of the Fed's actions. We're only feeling a very light touch of them right now, and resource scarcity could be the thing that pulls the trigger. The conditions are ripe for a perfect storm. Will we get one? One way or another, I say yes, be it monetary, or otherwise. There is simply too much tension in everything for something to not break.
People thought I was crazy when I started ripping up a bunch of my ground so that I could plant a garden, and I would tell them, whether they asked why or not, that food was going to get real expensive. Well, oil is not getting easier to extract and the Fed has been printing trillions. This is just the beginning of the effects appearing, and these things take time. How long has it been since QE1? How much energy does it take to extract a barrel of oil on average?
Could be the pressure is on the $10 million CEO's to maximize profits? Increase bonuses? Get more stawk options etc. So, when things are 'flat,' float an incrase and see if it sticks. That's what I always saw done with companies I worked for. And they group together internally devising a strategy that sounds plausible for justifying the inreases: gas & energy prices are up, supply is down...etc, etc. You all know this. Most companies do it. And if you get enough of them doing it, you get an inflationary market. Remember the mid-'80's?
We have reached the end of growth in a system where growth is required. The only way to maintain the "status quo" is through outright fraud. I'm sure you'll be able to find resources where they're lying about the supply being in decline, but the fact still remains that it takes more energy to get oil out of the ground than it did 100 years ago, and it is that oil that is the lifeblood of our economy. You'll also find cases where they're claiming that the supply is greater than it is. The fact also still remains that the Fed has printed trillions, and quite a chunk of that is sitting in an account collecting interest at the Fed. There is no way that this ends well.
True that! Also, the packages are the same size, but they're only half-filled...
(Not that I eat that shit myself, my clients do.)
Seems we're buying packages that have more air in them, than product.
in may of 2011 coffee was at 3.08 and while it declined in steady fashion to 1.00 in nov 2013, SBUX and all its competitors continued to substantially increase prices during the entore decline -
There is this old joke, which I will abreviate before commenting
Now that we got that out of the way, don't drink SBUX, it's shit. The price of shit ain't up ... that would be a sign of the end times ...
Regards,
Cooter
Your comment seemed useful, informative, and not one directly called BS ... so its still at face value.
Not sure why all the down votes. It certainly seems plausible as a contributing factor to the OP.
I almost never vote, but +1 because I am contrarian. :-)
Regards,
Cooter
It may be true, but Brazil isn't the only coffee producing region, so it comes across as the BS official government approved reason. When the local news guy starts chiming in on the price of commodities, like limes for example, something is up. I'm pretty sure the local news guy didn't go to Mexico and do some investigative journalism and figure out the cause, but he sure let us know it was because of the Mexican drug cartels though.
http://cl.jroo.me/z3/M/F/o/e/a.baa-The-smallest-cup-of-coffee-i.jpg
The solution is simple
Watch the S&P and DJIA soar!
Well the cocksmuckers at the Federal Reserves said that inflation is too low.
lol
NY Fed head, William Dudley, said iPods were cheaper. They must be using iPods as a reference.
Unlike food, those seem to keep increasing in size for the price.
...as they increased prices in their cafeteria.
Ah, inflation.
Stealing is the new "work."
Arbeit macht frei
The prices keep on climbing.
But the Federal Reserve says we barely have 3% inflation.
Is William Dudley still looking at iPods as a marker of inflation?
This will cancel out some of the deflation we are seeing in food and energy.
LOL, steak at 11/lb. Bags of frozen vegtables used to be 16 oz, now their 12 oz. Gasoline around the area is now over $4.00/gal. Sure there's deflation, in wages.
Time for the MSM and the daily daytime talk shows to release a 'new study' showing the 'beneficial' effects of drinking 8 cups of coffee per day.
When companies raise prices, people can respond by changing their consumption behavior. When government raises prices (or taxes), people either pay or commit suicide (or go to jail).
WHEN THEY COME FOR YOU COFFEE!!!
GIVE THEM YOUR CREAM!!
When they come for my coffee, I prefer to give them TWO LUMPS!
I love my morning java just like my old girlfriends.
Rich, hot, quiet and available.
I like my coffee like I like my women, dark and bitter...
"And now time for the old bait and switch: boost prices by 9% and at the same time reduce package sizes by 9% in effect lowering the price!"
At some point the cost of packaging will make this strategy non-viable. At most when they will start selling single use packets.
Imagine going to the shop and ordering 17 lumps of sugar, 14 loafs of bread and 3 3/4 glasses of milk :)
http://rt.com/business/163340-china-russia-rating-agency/
No more Fitch, Moody’s, or Standard & Poor’s for Russia and China, as they have agreed to establish a rating agency on joint projects, and later, international services, Russian Finance Minister Anton Siluanov said Tuesday.
Things are moving swimmingly.
Oh snap, thems is fightin words!
This is ok because we're all getting 35% annual pay increases! Oh sorry, I forgot you're not working in D.C. for congress....
BREAKS OVER! BACK TO WOR... Oh sorry.......
Well they already shrunk a 3 pound can of coffee down to 2.2 oz. I say smuck their coffee. Ill just grind my own.
Yea... I seriously do not understand how people are so utterly utterly retarded that they cannot figure out how to grind their own coffee. It's not like the majority are even using an espresso machine in the first place, or even a vacpot... no, these people just drink their nasty stale drip, so it's not like you need much more than a dollar store grinder to get that "quality". People are dumb.
How is raising the price on a smaller amount 'effectively lowering the price'? Not sure what that meant.
Odd, my coffee comes in 500g bags, delivered to my door within 3 hours of ordering, freshly roasted, not really all that expensive either, and the price has not changed at all.
Go drink your swill I guess, because the crap they sell sure as shit ain't coffee. Seriously, how have so many idiots fallen for this preground instant garbage?
old habits shopping.
fresh roasted beans happened post-boomer generation in amrka - prior it was "the best part of wakin' up, folger's in yer cup". . .
the power of advertising jingles, heh.
Folgers? I cant afford fucking folgers. Im working temporarily in the phils and im priced down to a local brand that costs a buck fifty and lasts for two weeks. I wonder what kind of high quality beans the fed res guys grind up every morning. After all, employees can just copy 100 dollar bills from a laser printer in the office, declare it legal tender on the spot and buy whatever food they want with it in their 5 star restaurant looking cafeteria. right?
people drink folgers? ...
big ole plastic keggers of it, from CostCo.
Oh Costco one of the better stores out there, I prefer the big Dunkin Dounts bag of coffee but Folgers is better then no coffee at all
we buy bags of green beans in bulk, roast in batches, helps keep the costs down.
but yeah, it's definitely a pricey habit, I'll miss it when the supply cord gets pulled. . .more oolong then, I guess!
Folgers is premium nosewater.
Retailers can't pass on costs, customers will not pay. This time is different. Sales will continue to drop ever faster now. The "consumer" is never ever ever coming back, thats your new normal. Dead is dead and the lawers will have their day.
I live in S Carolina. What I'm beginning to see @ the local Wal-Mart is meat stay in the refrigerators, rather than fly off the shelves. Down here, a higher proportion of workers have incomes tied to global wage rates. These folks remember when their families ate squirrels. I'll know things are getting really bad when I begin to hear folks talking about their tasty squirrel pie. Incongruously, I believe our area is experiencing a building phase, residential and commercial. The building subcontractors seem to be incrementally busy, Perhaps this represents the impact of the refugees moving down from the scorching cost of living in the cities of the Midwest and Northeast.
Pretty soon all they will sell is the sampler sized portions...
I thought G&S were supposed to keep pave with inflation.....
See if the Fed can print rain for Brazil....
The sarcasm here is nearing Soviet-era levels. A sure sign times are tough and frustration is high.
Next, J.M. Smuckers will reduce the container size and increase the price a second time.
The also changed the cup to 6 oz.
Well that's a shame really, I was wanting to buy some so I can enjoy my morning paper in the john. Meanwhile in the mainstream media... lets talk about some bullshit trendy topics those teens, uneducated people care about
Just use the same coffee grounds twice to make two pots of coffee = two pots for the price of one!
See...there is no inflation.
Toss a dirty sock in with the second pot and it's actually better than the first.
If a dirty sock makes it taste better, how about a pair of used undies? ;-)
We will live to see Bernanke and Yellen behind bars.
During WWII there were coffee substitutes. Those come back and demand drops watch these corporate profits sink.
Start offering different varieties of coffee substitutes as prices rise.
Starve the Wall Street bankster beast.
Coke kept raising prices so people stopped buying. Their demand fell off and profits dropped. Works every time.
Yeah but Starbucks employees are full time professionals.
/sarc
That's Barista, s-man, Barista!
I think we should make MC Hammer the treasury secretary. He would improve the finances of this country.
Bought four hamburger patties for $4.50 - just under a pound - cooked em up on the grill, tasted like shit. Not the same beef I remember. Will be eating more pork and chicken - shisk-ka-bob, my specialty - with home grown (my own) vegetables this summer.
Try Cucumbers on the grill. Excellent!
Went to Wal-Mart yesterday to buy an adjustable water sprinkler. Found a cheap made in China piece of shit for $3.47, went to the checkout and the lines - at the six open check-outs - were six deep with baskets full of welfaremommafoodstuffs like Cheetos and ice cream. Remembered it was June 2nd... high-tailed it out of there. Bought a rather good sprinkler at Home Depot for six bucks and change and was glad I did. The cheap plastic one from Wal-Mart would have lasted maybe three weeks. The HD one actually had some metal parts!
Last week, was forced to wait for a friend at Dunkin Donuts, the first time I've been in one of those places since I was a kid - back in the 60s. Bought a coffee and breakfast wrap for $2.99 plus tax. The coffee was OK, but the wrap was some flimsy bread-like substance with half an egg, some cheese and a strip of bacon inside. The whole thing weighed maybe 3 oz. I was so happy I went there because I will now never set foot in one again, or drive through. It amazes me how many people eat there MORONS!
BTW: We're Fooked, people. The president is a treasonous dickhead but congress won't do a thing about it. My best advice is to just ignore as many laws and taxes as possible. Welcome to post-constitutional America.
We just went to the local farmer and ordered half a cow for $2.89 a lbs. 8 months ago it was 2.59.
The local farmers cow taste much better than store bought....
'
'
Up in Canada, President's Choice changed their burgers, the Gigantos. They used to be great! Then the packaging changed!
That's the first sign.
I tried'em.
Just crap.
No taste. No texture.
The inflation, the hiding of it, is getting so difficult now, that it's going to burst into the open in about a year.
Bacon is not being sold in 500 gram packages anymore. It's 375! Same price.
IT's coming.
PRepare.
•?•
V-V
Starbuck is breaching loses. The 2% increase rules and liberal scumbags have reached critical point.
/ lol. Does one bring in the EBT model to save the business? The idiots at Starbucks have failed. Cheerio fuck sticks.
Frankly, if I keep boycotting thes companies that do this shit, I'm either going to lose a lot of weight, or die of starvation. Looks like this jug of coffee in my cubbard is the last. Folgers can hang onto their product for awhile longer.
The other day I was in 7/11 on the way to work. Was going to buy a bag of Cheetos to munch on throughout the week. Usual price is $3.49 for I believe it was 15 ounces. The new bag is 9 ounces for the same price. I left without buying anything but a bottle of water, which the price has not changed for a long long time.
So, not buying coffee or munchies anymore. Haven't bought candy or sweets in like forever. Nor sodapop. Hmmm!
NEXT!
Yes! Vote with your wallet. It's your last vote that counts. I've been noticing that coffee smells more and more like diesel. What kind of third world stinky assed kerosene fueled rusty barrels are these monopolists using these days to roast coffee? I wonder how much the harvesters and roasters are getting paid...umm, squat?
So, fuck 'em TIME TO QUIT DRINKING COFFEE
Smucker IS coffee in the US.
Arabica good.
Robusta, bad.
Doesn't affect core CPI so keep the ZIRP machines rolling!
Oh, and fuck the Fed
Choco rations being increased next month!
Wait. Higher costs? Coffee prices have remained elevated?
http://finviz.com/futures_charts.ashx?t=KC&p=w1
Coffee prices (for the bean itself) are down almost 50% from 3 years ago!
Something's not adding up here.
They say I have a face that only a mother smucker could love.
Juan Valdez is hanging drywall in L.A.
No workers to pick the beans.
Chris Farley enraged that he paid so much for coffee without caffeine
https://www.youtube.com/watch?v=Tg5aVzSDme4
Mother Smuckers would shit her oversized panties!
We should all cheer the rising cost of food because when the sheep finally realize they can't afford booze, cable tv, iphones, internet, eating out and every other luxury and still afford to eat, thats when we'll start to see bankers and politicians hang for what they've done.
http://www.marketwatch.com/story/over-50-of-americans-struggle-with-home...
http://cnsnews.com/news/article/ali-meyer/1-5-children-live-poverty-us