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There is presently a strong global demand for cotton. Okay – we hear you say – and, does this have much to do with the price of theatres, movies and concessions? Well, indeed it does. As do China, India, tornadoes, rain and ethanol, too. In fact, each of these variables affects everyone who eats, be it at home or in restaurants. But much of the recent noise has been about ears. Corn ears.

The cost of basic edible commodities – foods used in every country and found at our concession stands in one form or other – is reaching record levels according to the United Nations Food and Agriculture Organization. Contributing factors include: severe and disruptive weather conditions where food is grown; high demand in developing economies; also trade restrictions; the declining value of the U.S. dollar, and the production of corn for products other than for human consumption. To which we might just add the twin-edged involvement of speculators investing in derivatives

HUSK OF THE MATTER

Corn can be traced back through the food chain to almost everything we eat. Corn oil is used in the processing and cooking of edibles; is both a filler and a starch; is used in food-preparation; is a less expensive sweetener than cane sugar; and, in syrup form, is present in nearly all sweet food items. However, while the world demands more, producers are growing less corn designated for edible items as there is more revenue to be had from producing corn for non-edible usage – ethanol and cotton being the most popular. Due to the incentives paid for growing corn, more land is devoted to it, creating a shortage of other crops, and thus driving up prices. Farmers use the same land and equipment when growing and harvesting grain and this translates into relatively consistent pricing. Meanwhile, corn-vendors attempt to project market-fluctuations as far ahead as possible – usually three-to-six months – and with a crystal ball often integral to the process. With customer-contracts in place, increases are largely avoided during the contract-term. Customers not under contract, however, may usually expect 30 days’ notification of a price-increase.

MORE INCREASES IMMINENT
Corn-vendors project a steep increase for the 2011 product – harvested in Fall 2011, for sale by early 2012 – to exceed a whopping 30% over current pricing. Moreover, the cost of corn this year is already more than 50% higher than that of 2010. Often a company’s size and product-line diversity can help soften these impacts when increases are so dramatic, but, generally, there is no real immunity from price-rises.
In the U.S., 35-40% of harvested corn goes into making ethanol. The remainder is divided among food- and fiber-production, which is presently insufficient for an increasingly affluent world demanding more product, and one which is also increasingly aware, and desirous, of better food. Under such conditions, it seems we can expect further price increases and, if credits and incentives continue, fewer edible ears.

“None of us likes price increasesas they erode

our profit margin. It’s understandable that our costs have to increase and in some cases we need to pass some of that on. It is not our preference to do so, but it is often necessary.”

Brian Nuffer
Goodrich
Quality Theaters

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