Geraldine of Mount Pleasant Comments About the Price of Walnuts and Such
Events over the past couple of months are notable for the citizens of Mount Pleasant and area. A curling team went deep into the Brier competition, Alice Comrie made it to the semi-finals in the Spelling Bee of Canada and the new Centennial Concert Hall opened with considerable fanfare. Kumar, Thad, Rebecca, Sheila and their partners attended the celebrations. They were joined by Celine Langlois and her brother. They own and operate ” Tous Sur Les Bonbon”, a very popular store with locals and tourists.
Over dinner, conversations were lively. Kumar sometimes takes the opportunity to talk about his adventures in the stock market which this time is the story of a big loser. He invested in Diamond Foods Inc. Walnuts, a processor of walnuts in California, a big player in the industry and a significant part of a $1 billion export business. Kumar’s investment headed south when Diamond was found to be taking undue advantage of local walnut growers.
As other group members were being suitably sympathetic, Celine noted that her cost of walnuts was rising rapidly, forcing her to increase prices for her chocolate-coated mixed nuts. The subject turned out to be a hot button and morphed into a broader discussion about commodity prices in general and specifically those considered to be “soft commodities”. Most of these are found in the agricultural sector.
Kumar overcame his walnut misadventure, addressing the issue of a takeover of Viterra Inc., a major player in the Canadian food industry. The sense is that food related businesses are hot items on the acquisition trail. An earlier aborted purchase of Potash Corp. added fuel to the fire.
Thad observed that dire warnings seem to be a constant part of the commodity’s industry. Forecasts capture cataclysmic outcomes because of perceived surpluses and shortages. To be sure, severe imbalances happen from time to time, resolved, only to have new ones emerge. He cited the peak oil theory as an example and wondered how this idea has become so far advanced considering there is no certainty about how much there is and how much is needed. The current over supply of natural gas and the low prices fly in the face of earlier predictions.
At that time the overture to Bizet’s Carmen began and the conversation ended … but not the issue.