Had a big meeting today........(A rant.)

[whell]

Originally Posted by CarlV

Coffee prices here have pretty much doubled in the last year and I have not heard of any real causes for this to happen. So price gouging occuring makes a lot of sense. Hope you aren't part of any cost cutting to appease stockholders.


Carl

I think it might be a good idea to check our premises in this discussion. Yes, there has been a rise in food commodity speculation, including coffee.

http://www.espressocoffeeguide.com/2...coffee-prices/

http://www.bloomberg.com/news/2011-0...inflation.html

But there are many reasons to engage in commodity speculation. It is not simply individuals gaming the market. It is producers and food manufactures as well engaging in market speculation in an attempt to lock in prices that are beneficial (manufacturers ), which may ultimately benefit consumers.

Supply and demand are influencing commodity prices as much as anything, and speculators are responding to supply issues. Its a gambit either way for the speculators, particularly if they're buying in a short supply scenario, and then the market changes and the speculators take a beating.

I recall a few years back Post did a good job locking in grain prices when demand (and cost) was relatively low in the marketplace. Kellogg failed to do so, and as a result there was some great pricing competition at the retail level for cereal products that allowed Post of gain market share against Kellogg while creating a lot of value for the consumer.

Its the "bad" speculation (from the consumer perspective) that makes headlines. There are any number of examples that don't get the same press when they actually benefit the consumer.