Free Press
07-04-2008, 04:33 PM
- Iron ore - price just doubled
- Plastics - Dow plastics went up 20% in June and another 25% in July.
- Meat is expected to rise 30% next year
We're in for some scary US and world inflation numbers in the next six months.
BHP doubles price of ore for Baosteel
Bloomberg News
Published: July 4, 2008
SHANGHAI: BHP Billiton, the world's third-biggest iron ore exporter, won a price increase of as much as 97 percent from Baosteel Group, matching the agreement reached by Rio Tinto Group.
Baosteel, the biggest Chinese steel maker, will pay the higher prices in the 12 months that started April 1, Melbourne-based BHP said Friday in a statement.
Iron ore prices have gained almost fourfold since 2001 to a record because of surging demand from China, raising costs for steel makers and increasing profits of producers. They may gain another 20 percent next year as demand outpaces supply and new projects are delayed, Merrill Lynch said last month.
http://www.iht.com/articles/2008/07/04/business/04bhp.php
Dow Responds to Surging Energy Costs
Midland, MI - May 28, 2008
The Dow Chemical Company (NYSE: DOW ) announced today that on June 1 it will raise the price of all of its products by up to 20 percent – depending on their exposure to rising energy, feedstock and transportation costs – and will review all terms to all customers.
Andrew N. Liveris, Dow chairman and CEO, said the sweeping price increases and reviews are essential as the Company attempts to mitigate the extraordinary rise in energy and related raw material costs.
“Our first quarter feedstock and energy bill leapt a staggering 42 percent year over year, and that trajectory has continued, with the cost of oil and natural gas climbing ever higher,” Liveris said. “The new level of hydrocarbons and energy costs is putting a strain on the entire value chain and is forcing difficult discussions with customers about resetting the value proposition for our products.”
Dow spent $8 billion on energy and hydrocarbon-based feedstock costs in 2002. At the current rate, those costs would climb to $32 billion this year.
http://news.dow.com/dow_news/corporate/2008/20080528a.htm
Dow Announces Further Price Increases, Freight Surcharges and Idling of Plants
Seeks to restore margins as hydrocarbon and energy costs continue to climb
Midland, MI - June 24, 2008
The Dow Chemical Company (NYSE: DOW) will raise the price of its products by as much as an additional 25 percent in July in an effort to offset the continuing relentless rise in the cost of energy and hydrocarbon feedstocks.
The Company also will implement a freight surcharge of $300 per shipment by truck and $600 per shipment by rail, effective August 1. The surcharge applies to North America customers buying chemicals, hydrocarbons and plastics where Dow absorbs the freight currently (“seller absorbs freight”). Later this year a freight surcharge will be implemented in other geographic regions as appropriate.
Furthermore, the Company is moving ahead with plans to temporarily idle or reduce production at a number of manufacturing plants. Dow has reduced its ethylene oxide production worldwide by 25 percent, and idled 30 percent of its North America acrylic acid production. The Company also will idle 40 percent of its European styrene production capacity, and has reduced its European polystyrene production rate by 15 percent. These actions are due to the slowdown in the U.S. and European economies, and the recent surge in hydrocarbon feedstock costs.
http://news.dow.com/dow_news/corporate/2008/20080624a.htm
Midwest floods to raise meat prices
June 20, 2008
WASHINGTON - For consumers feeling the pinch of higher food prices, the flooding of prime Midwest farmland will bring more bad news in supermarkets through next year.
By wiping out corn and soybean crops across Iowa, Illinois and other states, the flood is driving up prices that were already at historic highs and increasing the cost of feed for cattle, hogs and poultry.
Economists say that will force livestock farms to cut back on production even more than they were, and that will eventually lead to higher prices for beef, pork, chicken, milk and eggs.
‘‘I have no choice: going broke or increase prices,’’ said Heinz Kramer, who expects to have to charge more for the pork and beef that he processes at a family-owned company in La Porte City, Iowa.
Pork prices could be up as much as 30 percent next year because of production cutbacks, said John Lawrence, an economist at Iowa State University. Prices of beef and poultry products are likely to be at least 10 percent higher by the end of this year, he said.
‘‘The higher the corn prices go today, the higher meat prices, milk and egg prices will go a year from now,’’ he said.
How much corn do you eat?
Many grocery staples contain corn. Here's how much milled corn it takes to produce them.
18-ounce box of corn flakes: 12.9 ounces of corn
2-liter soda: 15 ounces
1-lb. beef round roast: 2.6 pounds
1-lb. pork boneless chops: 3.6 pounds
1-lb. chicken breast: 2.6 pounds
1 dozen eggs: 4 pounds
1 gallon milk: 1.8 pounds
Source: The Corn Growers Association
http://www.suntimes.com/news/nation/1014995,midwestside061908.article
Record corn prices mean more expensive meat, dairy
By Stevenson Jacobs
Posted 24 June 2008 @ 03:00 am HKT
NEW YORK - Raging Midwest floodwaters that swallowed crops and sent corn and soybean prices soaring are about to give consumers more grief at the grocery store.
In the latest bout of food inflation, beef, pork, poultry and even eggs, cheese and milk are expected to get more expensive as livestock owners go out of business or are forced to slaughter more cattle, hogs, turkeys and chickens to cope with rocketing costs for corn-based animal feed.
...Rod Brenneman, president and chief executive of Seaboard Foods, a pork supplier in Sawnee Mission, Kan. that produces 4 million hogs a year, said high corn costs were already forcing producers in his industry to cut back on the number of animals they raise.
"There's definitely liquidation of livestock happening," and that will cause meat prices to rise later this year and into 2009, said Brenneman, who is also the vice chairman of the American Meat Institute.
Brenneman's cost for feeding a single hog has shot up $30 in the past year because of record-high prices for corn and soybeans, the main ingredients in animal feed. Passing that increase on to consumers would tack an extra 15 cents per pound onto a pork chop.
It's a similar story for U.S. beef producers, who now spend a whopping 60-70 percent of their production costs on animal feed and are seeing that number rise daily as corn prices hover near an unprecedented $8 a bushel, up from about $4 a year ago.
"This is not sustainable. The cattle industry is going to have to get smaller," said James Herring, president and CEO of Amarillo, Tex.-based Friona Industries, which buys 20 million bushels of corn each year to feed 550,000 cattle.
Corn's prices were already rising before the floods, driven up 80 percent over the past year as developing countries like China and India scramble for grains to feed people and livestock. U.S. production of ethanol, an alternative fuel that can be made with corn, has also pushed prices higher, prompting livestock owners to lobby Washington to roll back ethanol mandates.
http://hk.ibtimes.com/articles/20080623/corn-meat-dairy.htm
- Plastics - Dow plastics went up 20% in June and another 25% in July.
- Meat is expected to rise 30% next year
We're in for some scary US and world inflation numbers in the next six months.
BHP doubles price of ore for Baosteel
Bloomberg News
Published: July 4, 2008
SHANGHAI: BHP Billiton, the world's third-biggest iron ore exporter, won a price increase of as much as 97 percent from Baosteel Group, matching the agreement reached by Rio Tinto Group.
Baosteel, the biggest Chinese steel maker, will pay the higher prices in the 12 months that started April 1, Melbourne-based BHP said Friday in a statement.
Iron ore prices have gained almost fourfold since 2001 to a record because of surging demand from China, raising costs for steel makers and increasing profits of producers. They may gain another 20 percent next year as demand outpaces supply and new projects are delayed, Merrill Lynch said last month.
http://www.iht.com/articles/2008/07/04/business/04bhp.php
Dow Responds to Surging Energy Costs
Midland, MI - May 28, 2008
The Dow Chemical Company (NYSE: DOW ) announced today that on June 1 it will raise the price of all of its products by up to 20 percent – depending on their exposure to rising energy, feedstock and transportation costs – and will review all terms to all customers.
Andrew N. Liveris, Dow chairman and CEO, said the sweeping price increases and reviews are essential as the Company attempts to mitigate the extraordinary rise in energy and related raw material costs.
“Our first quarter feedstock and energy bill leapt a staggering 42 percent year over year, and that trajectory has continued, with the cost of oil and natural gas climbing ever higher,” Liveris said. “The new level of hydrocarbons and energy costs is putting a strain on the entire value chain and is forcing difficult discussions with customers about resetting the value proposition for our products.”
Dow spent $8 billion on energy and hydrocarbon-based feedstock costs in 2002. At the current rate, those costs would climb to $32 billion this year.
http://news.dow.com/dow_news/corporate/2008/20080528a.htm
Dow Announces Further Price Increases, Freight Surcharges and Idling of Plants
Seeks to restore margins as hydrocarbon and energy costs continue to climb
Midland, MI - June 24, 2008
The Dow Chemical Company (NYSE: DOW) will raise the price of its products by as much as an additional 25 percent in July in an effort to offset the continuing relentless rise in the cost of energy and hydrocarbon feedstocks.
The Company also will implement a freight surcharge of $300 per shipment by truck and $600 per shipment by rail, effective August 1. The surcharge applies to North America customers buying chemicals, hydrocarbons and plastics where Dow absorbs the freight currently (“seller absorbs freight”). Later this year a freight surcharge will be implemented in other geographic regions as appropriate.
Furthermore, the Company is moving ahead with plans to temporarily idle or reduce production at a number of manufacturing plants. Dow has reduced its ethylene oxide production worldwide by 25 percent, and idled 30 percent of its North America acrylic acid production. The Company also will idle 40 percent of its European styrene production capacity, and has reduced its European polystyrene production rate by 15 percent. These actions are due to the slowdown in the U.S. and European economies, and the recent surge in hydrocarbon feedstock costs.
http://news.dow.com/dow_news/corporate/2008/20080624a.htm
Midwest floods to raise meat prices
June 20, 2008
WASHINGTON - For consumers feeling the pinch of higher food prices, the flooding of prime Midwest farmland will bring more bad news in supermarkets through next year.
By wiping out corn and soybean crops across Iowa, Illinois and other states, the flood is driving up prices that were already at historic highs and increasing the cost of feed for cattle, hogs and poultry.
Economists say that will force livestock farms to cut back on production even more than they were, and that will eventually lead to higher prices for beef, pork, chicken, milk and eggs.
‘‘I have no choice: going broke or increase prices,’’ said Heinz Kramer, who expects to have to charge more for the pork and beef that he processes at a family-owned company in La Porte City, Iowa.
Pork prices could be up as much as 30 percent next year because of production cutbacks, said John Lawrence, an economist at Iowa State University. Prices of beef and poultry products are likely to be at least 10 percent higher by the end of this year, he said.
‘‘The higher the corn prices go today, the higher meat prices, milk and egg prices will go a year from now,’’ he said.
How much corn do you eat?
Many grocery staples contain corn. Here's how much milled corn it takes to produce them.
18-ounce box of corn flakes: 12.9 ounces of corn
2-liter soda: 15 ounces
1-lb. beef round roast: 2.6 pounds
1-lb. pork boneless chops: 3.6 pounds
1-lb. chicken breast: 2.6 pounds
1 dozen eggs: 4 pounds
1 gallon milk: 1.8 pounds
Source: The Corn Growers Association
http://www.suntimes.com/news/nation/1014995,midwestside061908.article
Record corn prices mean more expensive meat, dairy
By Stevenson Jacobs
Posted 24 June 2008 @ 03:00 am HKT
NEW YORK - Raging Midwest floodwaters that swallowed crops and sent corn and soybean prices soaring are about to give consumers more grief at the grocery store.
In the latest bout of food inflation, beef, pork, poultry and even eggs, cheese and milk are expected to get more expensive as livestock owners go out of business or are forced to slaughter more cattle, hogs, turkeys and chickens to cope with rocketing costs for corn-based animal feed.
...Rod Brenneman, president and chief executive of Seaboard Foods, a pork supplier in Sawnee Mission, Kan. that produces 4 million hogs a year, said high corn costs were already forcing producers in his industry to cut back on the number of animals they raise.
"There's definitely liquidation of livestock happening," and that will cause meat prices to rise later this year and into 2009, said Brenneman, who is also the vice chairman of the American Meat Institute.
Brenneman's cost for feeding a single hog has shot up $30 in the past year because of record-high prices for corn and soybeans, the main ingredients in animal feed. Passing that increase on to consumers would tack an extra 15 cents per pound onto a pork chop.
It's a similar story for U.S. beef producers, who now spend a whopping 60-70 percent of their production costs on animal feed and are seeing that number rise daily as corn prices hover near an unprecedented $8 a bushel, up from about $4 a year ago.
"This is not sustainable. The cattle industry is going to have to get smaller," said James Herring, president and CEO of Amarillo, Tex.-based Friona Industries, which buys 20 million bushels of corn each year to feed 550,000 cattle.
Corn's prices were already rising before the floods, driven up 80 percent over the past year as developing countries like China and India scramble for grains to feed people and livestock. U.S. production of ethanol, an alternative fuel that can be made with corn, has also pushed prices higher, prompting livestock owners to lobby Washington to roll back ethanol mandates.
http://hk.ibtimes.com/articles/20080623/corn-meat-dairy.htm