The Rising Influence of Rising Affluence

[oldberkeley]

Long drought shrinking popcorn harvest

[I never realized that there was a specific type of corn used for popcorn.]

http://www.dispatch.com/content/stories/business/2012/09/05/long-drought-shrinking-popcorn-harvest.html

By P.J. Huffstutter
REUTERS Wednesday September 5, 2012 5:49 AM

CHICAGO — For more than half a century, the Shew family has harvested mountains of popcorn kernels to be buttered, salted and munched by movie fans.

But as a crippling Midwestern drought sends commodity prices soaring, the family’s farmland in west-central Indiana is suffering. Plants are listing, stalks are spindly and corn ears small.

It’s an ill portent for the snack-food world. All across the Midwest, where rows of popcorn normally thrive alongside fields of soybeans, U.S. popcorn farmers have watched in horror as stifling, triple-digit temperatures and weeks without rain withered crops.

“This is the worst season we’ve ever had,” said third-generation popcorn purveyor Mark Shew, who runs the family’s farm in Vigo County. “In some places, they’re going to be down to counting kernels at the bottom of the storage bins.”

The situation has had popcorn buyers — from small mom-and-pop shops to larger food chains — scrambling for months to line up their supplies for this fall. Their options are limited.

Retail prices have jumped this summer: from about $20 for a 50 pound bag to $30 or higher, said Tim Caldwell, owner of Pop It Rite, an Illinois-based popcorn-industry expert and snack-foods consultant. Wholesale prices have started to creep up, too, he said.

While consumers might have to pay more for the snack at the grocery store soon, some analysts say the chances of prices rising for a bucket of movie theater popcorn are slim.

“The popcorn portion of the product is a very low percentage of the price, and the prices are already so high, I think consumers would balk if they went up any higher,” said Bob Goldin, director of the food supplier practice at Technomic Inc.

The popcorn industry — which sold $985.7 million worth of unpopped kernels in 2010, down 2.2 percent from five years earlier — is barely an economic nibble out of the country’s corn world. Most of the popcorn consumed worldwide is grown in the United States. Export demand for the fluffy, crunchy snack has been slowly rising in recent years from China and Russia.

Still, more than 80 percent of U.S. popcorn production is consumed domestically, according to research by the Ag Marketing Resource Center at Iowa State University. The Popcorn Board, an industry trade group, said Americans munch 16?billion quarts of popped popcorn a year.

Eager to feed that appetite, Midwestern farmers say they have long used popcorn, a bit player in the field, as a companion crop for filling up marginal ground around their field corn and soybeans.

During even the toughest times, popcorn can provide an economic boost for those willing to fuss over the plants, as long as the weather stays mild. But when temperatures soared, the crops withered.

The poor weather added to recent supply concerns for popcorn buyers, said Norm Krug, chief executive officer of Preferred Popcorn, a Nebraska-based, farmer-owned cooperative that supplies popcorn to movie theaters and others.

As prices for commodity corn, used as livestock feed, and soybeans hit record highs, Midwestern farmers shifted more of their land to those crops, Krug said. That left fewer popcorn plants to harvest