Why popcorn prices are going up.

Popcorn price are on the rise at movie theaters around the country. According to several articles that I have seen over the last month and another one today, the rise in popcorn prices is due to the demand that ethanol has put on the corn crop. As one article put it.

As a consequence of booming demand for alternative fuels, farmers are replanting acres of popcorn with more profitable crops that go into ethanol and other biofuels.

This has, in their opinion, caused prices to go up dramatically.

Prices went up about 40 cents this winter at the Saginaw 8 and Quad complex in Kochville Township, putting the popular medium tub at $4.50, said Shift Manager Josh R. LaFond.

That is about a 10% increase and it is because the price of popcorn from suppliers has gone up.

At the Hemlock-based Lloyd C. Zastrow Wholesale Popcorn and Supplies, which supplies the Court Theatre in Saginaw, the cost of a 50-pound bag rose to $16 from $15, said Joyce Zastrow, a Michigan Farmers Hall of Famer with her husband, Lloyd, since 2006.

At $16 for a 50 pound bag, that equates to 31 cents per pound. There would have to be a lot of popcorn in a medium tub for it to go up by 40 cents just based on the cost of popcorn.

Another article offers some additional insight.

But if audiences worry that movie snacks are too expensive, they need to know that those $5 buckets of popcorn are what keeps the average national admission price around $7.

"If we didn't charge as much for concessions as we did, the tickets to the movies would cost $20," said Mike Campbell, chairman and chief executive of Regal Entertainment Group, the nation's largest theater chain with 6,300 screens.

Concession sales are a theater's lifeblood, accounting for as much as 45 percent of profits at the nation's largest chains. Popcorn offers one of the biggest returns on investment for exhibitors, because the unpopped kernels used to make a bucket of popcorn cost just a few pennies.

So although the cost of popcorn has gone up, the amount of popcorn in a $4.50 tub would still only be a very small percentage of the final price. In this way, theaters are using the money gained from high profit items to cover other costs of operations.

That would also mean that as these other costs of operation, such as labor, electricity bills, etc. rises, the amount of profit from high profit items such as popcorn would need to rise as well. And that has nothing to do with ethanol.

Update : 5/28/08

A recent article in Advertising Age added a unique perspective on this situation.

And the price of the paper pulp to produce popcorn tubs has jumped 40% in the past 36 months, making the tub more expensive than the corn inside it.

Bad Wheat Ideas

The Retail Bakers of America (RBA) have urged congress to help with wheat prices.

A group of the nation's flour millers and bakers came to Washington, D.C., during the second week of March to seek some relief to the problem of high wheat prices and relatively short supply.

Their suggestions were to curb wheat exports until domestic needs were fulfilled and to allow land in the Conservation Reserve Program to be released without penalty.

Cutting back on exports would indeed lower wheat prices. Since half the wheat that is produced in this country is exported it would essentially cut demand in half. That would serve to lower wheat prices in the short term.

But faced with less demand and lower prices, farmers would simply switch to other crops that offered higher returns. So although prices may come down in the short term, in the long term it would lead to lower production and even higher prices.

This years winter wheat crop is larger than last years by over 1.6 million acres. Farmers are already responding to increased wheat prices by increasing production.

This years spring wheat crop has not been planted yet. The RBA better hope that the mere threat of limiting exports isn't enough to scare prospective wheat farmers into switching to other crops

Mixing Dry Materials With Wet Ethanol Byproducts Increases Storage Life

Wet byproducts from ethanol production are tricky to store for later use as cattle feed because of their high moisture content and threat of spoilage, but mixing them with drier, bulkier feeds improves storability, according to University of Nebraska-Lincoln research.

UNL animal scientists have just completed research that devised formulas for mixing several widely available dry forages with wet distillers grains. Their findings could help feedlot managers and cow-calf producers purchase wet distillers grains during the summer when their plentiful supply can mean lower prices and safely store them for use later in the season, or for winter feeding.

The relatively short shelf life of wet distillers grains has been a key obstacle to their use as feed in some situations, said Galen Erickson, a UNL beef nutritionist. Feedlots need to have the material delivered frequently and use it within a few days to avoid spoilage; for smaller operations, that's not economically feasible. Cow-calf operators, meantime, have greatest use for the feed during the winter, but that's when supplies tend to be lower than during the summer.

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Small scale biodiesel could fuel your truck and feed your cows

Billings, Mont. - Advocates for sustainable, small-scale biodiesel released a study today to provide ranchers with nutritional information about using oilseed meal byproducts from biodiesel production from crops in the Northern Great Plains.

In the study, Biodiesel Benefits for Cattle Producers: Feeding Byproducts of Biodiesel Production, Dr. Greg Lardy, Associate Professor of Animal Science, North Dakota State University, reviewed data regarding the nutritional value of biodiesel byproducts as feedstuffs for cattle on ranches in the Northern Great Plains. Lardy prepared the report for the Western Organization of Resource Councils. The study did not examine the economic feasibility of biodiesel production.

Lardy found use of oilseed meal byproducts in beef cattle operations would be relatively easy.

“Oilseed meals can be used as a feedstuff in a wide variety of beef cattle nutrition applications,” Lardy said. “They are best suited for use as protein supplements in wintering diets for beef cows or in growing and finishing diets for beef calves.” In the study, he analyzed the compatibility of incorporating oilseed meals generated as a byproduct of small scale biodiesel extrusion processors into the nutritional strategy of a 300 cow ranch.

According to the report, potential oilseed crops in the region for biodiesel production include soybeans, sunflowers, safflower, mustard, camelina, and canola. Camelina, sunflower, and canola have the greatest oil content.

Montana rancher Jeanne Charter, representing WORC and the Northern Plains Resource Council, said farm-scale and community-scale providers could manufacture biodiesel and supply a good nutritional supplement to ranch and pasture fed cattle during the fall and winter seasons, when grasses are dormant and of lower nutritional value.

“We see potential for the ranching industry in cooperation with area growers to become more energy self sufficient while adding value to our beef before shipping it out of state,” Charter said.

Charter feeds safflower oil meal to her cattle on her ranch near Shepherd, Mont.

Gene Wirtz, a North Dakota wheat grower representing the Dakota Resource Council, noted that small scale biodiesel producers need to find markets for oilseed meal byproducts.

“This kind of technology brings farmers and ranchers together,” Wirtz said. “Farmers can grow it. Ranchers can feed it. They can jointly manufacture, process, and use the fuels.”

The Biodiesel Benefits report is available here. Print copies are available from WORC, 406-252-9672.

WORC is a network of conservation and family agriculture organizations in Colorado, Idaho, Montana, North Dakota, Oregon, South Dakota, and Wyoming.

Members of Dakota Resource Council use grassroots actions to influence public opinion and shape public policy to protect agriculture, natural resources, livelihoods and community well-being.

Northern Plains Resource Council is a grassroots conservation and family agriculture group that organizes citizens to protect Montana's water quality, family farms and ranches, and our unique way of life.

New Study: No Link Between DDGs and E. Coli

A new study produced by Kansas State University and funded by the Kansas Beef Council and the National Cattlemen's Beef Association has found no correlation between feeding distillers dried grains (DDGs) and E. Coli.

Unlike our previous studies, we found no evidence to indicate that dietary inclusion of distiller’s grains or corn processing methods have a significant effect on the prevalence E. coli O157 or Salmonella in cattle feces.

Since these are the same researchers that released this study just a few months ago that brought this whole issue to the forefront, it is nice to see these new results. And although I don't think that this study is going to end the debate, it does show that there is good reason to doubt the original findings and to hold off passing judgment until a larger, more thorough study can be completed.