The USDA's Statistics Service's most recent report on crop production had more bad news about the corn harvest:

Corn production is forecast at 10.8 billion bushels, down 13 percent from 2011 and the lowest production since 2006.

"Based on conditions as of August 1, yields are expected to average 123.4 bushels per acre, down 23.8 bushels from 2011.

"If realized, this will be the lowest average yield since 1995. [Editor's note: emphasis mine.] Area harvested for grain is forecast at 87.4 million acres, down 2 percent from the June forecast but up 4 percent from 2011.

Given what a huge part of our economy corn is, this isn't good news by any measure. Whether it's starch, livestock feed, ethanol production, or good ol' fashioned corn-on-the-cob, corn is vital.

What usually happens in a situation like this is:

1. demand is consistent, so...
2. prices go up, so...
3. more farmers plant corn to take advantage of the high price, so...
4. production levels stabilize, then...
5. production levels exceed original demand, so
6. prices fall again

The question is: what to do today. The answer depends on two things:

1. What are your needs as a manufacturer?
2. How much risk can you tolerate?

If your needs dictate that you need product now, you need product now. Period. If you can wait, how much are you willing to risk that production doesn't increase by the time you need product and/or prices not dropping?

The bottom line, as always, really is the bottom line.

And, remember, no matter what your corn starch (or other) needs are now or in the future, we can help.

By the way, here's a quick summary of the 2012 corn crop report at CNN Money.

First of all, congrats to Nestlé!

Earlier this week they opened a new Ultra High Temperature (UHT) in Sri Lanka (their third in the country) that's slated to produce ready-to-drink brands such as Milo and Nespray, both popular products for the company in the region.

Of the new facility Alois Hofbauer, Managing Director for Nestlé Lanka said,

Our latest investment will have a ripple effect across the local community by helping our company make a positive impact on thousands of suppliers and farmers in the country.

"The new manufacturing capabilities also mean we can produce new products for our Sri Lankan consumers.

What's perhaps most interesting is that even before the facility Nestlé was already huge in the Sri Lanka, a country a lot of food manufacturers take for granted. Turns out, Nestlé is Sri Lanka's single largest private sector collector of fresh milk, procuring fresh milk from over 15,000 local dairy farmers every day. [Note: Emphasis is mine.]

Now that's a lot of milk!

Speaking of which, while we ourselves don't carry the two Nestlé products, we do carry a complete line of dairy products for manufacturers and restaurants alike.

For full details here's the official press release on the Nestlé Sri Lanka UHT Facility

Labels: dairy products, Nestle, UHT milk, ultra high temperature milk

When raw materials go up in any industry, eventually it's going to have an effect on any company's profitability.

In this case, the cost of wholesale food ingredients has gone up, and it's affecting General Mills profitability.

There are always a number of factors that cause price fluctuations, but in food ingredients it tends to be just a few things:

• weather
• demand
• fuel

Obviously, fuel costs get blamed in transportation costs to manufacturers and the consumer, but they also, of course, affect the cost to the farmer of planting, harvesting, and getting their product to market. Ultimately these things show up as higher prices to both food manufacturers and consumers.

Quoting a Reuter's article on General Mills lower profitability:

In the U.S. retail segment, the company's largest business, earnings fell 4 percent due to higher raw material costs, lower sales volume and higher advertising expenses.

Lower sales volume and higher ad expenses not withstanding, raw materials, i.e. the food ingredients they use, was still a big factor.

The article goes on to say,

General Mills has said commodity costs have increased in the 10 percent to 11 percent range in fiscal 2012 due to higher prices for ingredients like grain.

Teams of people and computers are dedicated to figuring out what's happening next with food ingredients prices, and given current trends, these costs could well continue to rise. Whether or not they will is really anyone's guess.

Labels: commodities prices, general mills, wholesale food ingredients, wholesale sugar

Truvia®, which has surged since its introduction just a few years ago to become the #2 sugar substitute in the U.S., now has a variety suited to baking.

What's the difference between regular Truvia® and Truvia® Baking Blend?

Truvia® Baking Blend is a blend of Truvia® and sugar, thus it provides the lovely browning of baked goods and ensures the chemical reactions during baking that require real sugar to happen can still happen.

This, too, is one of the reasons why there are baking blends of other common sweeteners like Splenda®. Despite the technological advances in natural and artificial sweeteners alike, there are still things that require the old fashioned ways to work. In this case, it's sugar.

One of the interesting tidbits from the press release is this,

A 1/2 cup of Truvia® Baking Blend has 190 calories and provides the same sweetness as 1 cup of sugar with 760 calories, and offers an easy conversion from full sugar recipes.

Curiously, the press release about the Truvia® baking blend only makes mention of use and pricing for the home, but as with most anything, if it's available at home, it's also available to commercial food manufacturers, too.

Labels: stevia, sugar alternatives, sweeteners, truvia

Interesting news today on the food tastiness front. Turns out, just seeing good pictures of the food we're about to eat can go a long way towards positively affecting what we think of the food.

Or, so says a multi-organizational study on the visual/taste connection that includes:

• Perception Physiology, Nestlé Research Center, Vers-chez-les-Blanc (Lausanne, Switzerland)
• Departments for Clinical Neurosciences and Radiology, Centre Hospitalier Universitaire Vaudois and University of Lausanne (Lausanne, Switzerland)
• Organization for Interdisciplinary Research Projects, The University of Tokyo (Tokyo, Japan)

Food photographers and stylists across the word are rejoicing at this news, no doubt.

This is a bit of a lengthy quote from the paper's abstract, but it really does sum things up quite nicely:

Vision provides a primary sensory input for food perception. It raises expectations on taste and nutritional value and drives acceptance or rejection....

"Using electrical neuroimaging, we assessed whether high- and low-calorie food cues... influence the brain processing and perception of taste.

"When viewing high-calorie food images, participants reported the subsequent taste to be more pleasant than when low-calorie food images preceded the identical taste....

"Our findings reveal previously unknown mechanisms of cross-modal, visual-gustatory, sensory interactions underlying food evaluation.

It's a little bit science geek-speak, but the bottom line is pretty clear: seeing good pictures of the food you're about to eat can change your opinion of it.

What's most interesting about this study is that brain activity of the participants' was actually measured, and the study didn't rely on the participants' opinions, which always makes things reek of being pseudoscience to me.

No question, making a great product means starting with great food ingredients, and now, if you're a food producer, you'd be well served to keep making the great food, and to also read the study and consider hiring a good food photographer.

Labels: food photography, food taste

Vitiva, a Slovenian company known for natural extracts for food applications, has a new stevia sweetener line called, "Sweet'nVit".

The significance of the Sweet-nVit product launch?

According to a piece on the product launch at FoodNavigator.com the Vitiva VP of natural food enhancement systems, Thierry Gay, revealed that ...in blind taste tests, 80% of people tested preferred the taste of Sweet’nVit’s 98% purity reb A – in comparison to other competitors.

We've been keeping a keen eye on stevia's growing popularity for a while and covered the launches or Truvia and PureVia.

Now that there's European stevia approval, it popularity will only continue to grow worldwide, particularly as consumers and manufacturers alike look for sweetener alternatives like Vitava's new offerings.

Further driving the push for alternatives, particularly natural ones like stevia: the cost of sugar itself.

Obviously, sugar is never going away. Never.

But, there's always room on the shelf--and the warehouse--for another good alternative.

Labels: stevia, sugar alternatives, sweet-nvit, sweeteners, vitiva

There's been some talk of late about what's happening with peanuts and hence wholesale peanut butter prices.

Looking at the production side of things on a week-by-week basis since late August 2011, production has been fairly steady. Sure, there was a blip around the New Year where production plummeted, but all-in-all it's steady.

Looking at the prices though shows a different picture, where wholesale prices are around $.35 per pound vs the $.25 or so we saw all through August and September of last year.

Have a look at this graph that shows production vs. price. (Production is thousands of pounds; price is per pound.)





With most commodities, there's a clear correlation between production and price; in this case, the only thing we're seeing is a steady upward price trend that seems to be detached from production.

Looking back over the past few months and taking out the blips in price from November 12, 2011, and the blip in production from the New Year, production is fairly consistent, but prices aren't.

Well, I guess you could say they are in that they're consistently up.

What this means long term for manufacturers of goods who rely on peanuts and peanut butter remains to be seen, but when you're looking at a 50% increase in price at the producer level, it typically means two things:

1. short term: higher prices for manufacturers
2. long term: lower prices for manufacturers as more producers come online to take advantage of the higher prices
   

Whether or not it'll come to that remains to be seen, but given the current trends, I'd be surprised if prices don't go up--at least a little bit more--before they go down.

Labels: peanut butter, peanut butter prices, peanut prices, peanuts