Keeping an eye on commodity prices

Food inflation is a fact. Today, it pays for food factories and restaurants to plan their product offerings with an eye on commodity trends. In many cases, trend information is available online at a nominal charge, or for free.

For bakers, US Wheat Associates give a biweekly report on the US Harvest, and also reports on
Crop quality
Price trends and
Supply and demand figures

For restaurant chains, the American Restaurant Association provides both grain and feedstock trend information.

In prior articles I’ve discussed the global grain and oil seed market, the factors that impact it such as fuel cost, transportation etc., and the ethics of using food commodities for alternative uses. The other major variable in the food cost equation that demands evaluation is the “speculators”.

The importance of understanding the speculators on the market is fairly simple. Producers have the right to sell and speculators have the right to purchase in advance.  In either case the seller hoping to get a better price early and the speculator hoping to sell at a better price later. This is not an unhealthy market practice unless the speculation begins to compromise, and even falsify, the projected value of the commodities. We all know these advance purchases as futures.

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(0) Comments • Permalink • 09 23 2008

• Dan Ettling, MonkeyMedia Software
• Stock market photo by Patrick Beek

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