Slashdot Mirror
MARS, Inc: We Are Running Out of Chocolate
schwit1 writes There's no easy way to say this: You're eating too much chocolate, all of you. And it's getting so out of hand that the world could be headed towards a potentially disastrous (if you love chocolate) scenario if it doesn't stop. ... Chocolate deficits, whereby farmers produce less cocoa than the world eats, are becoming the norm. Already, we are in the midst of what could be the longest streak of consecutive chocolate deficits in more than 50 years. It also looks like deficits aren't just carrying over from year-to-year—the industry expects them to grow. Last year, the world ate roughly 70,000 metric tons more cocoa than it produced. By 2020, the two chocolate-makers warn that that number could swell to 1 million metric tons, a more than 14-fold increase; by 2030, they think the deficit could reach 2 million metric tons.
Chocolate rations have been increased to 20 grams!
Forget Ebola, forget IS, forget running out of IPv4 addresses, finally a real reason to panic.
So go ahead, make the most of it!
"There's no easy way to say this: You're eating too much chocolate, all of you."
My dentist has been telling me this for years. So has my wife. Do you think they're seeing each other?
Chocolate prices rise, people have larger incentive to grow cacao. I'm failing to see what the issue here is.
It's probably worth mentioning here that Mars, Inc. is one of the big players in the Cocoa futures market. This is not investment advice, but if you invest in cocoa futures based on this article, you would be making a bet based on a story from someone who hopes to make money off of you.
So, kind of an obvious question. How are we covering the deficit? If we are eating more than is being produced, how is that possible? Are we tapping into some big strategic cocoa reserve that is slowly dwindling?
I did quickly RTFA, but neither mentioned anything about this.
-"Those who fought today will die tommorow."-
They could alleviate some of this problem by contacting the people who run Trader Joe's. They have this one dark chocolate bar (can't recall the name of it) that is so nasty and bitter, that it is inedible completely (unless you dip it in honey, then it is barely tolerable). It is worse than baking chocolate and is actually sold as if it is intended to be eaten like a normal bar of chocolate. If they just full stop quit producing that travesty, perhaps that could free up chocolate resources for other uses for perhaps another year or so.
This space unintentionally left blank.
In fact look here : http://www.unctad.info/upload/... we are still at lower price than 1978, way lower in constant dollar, although production is increasing.
C. Sagan : A demon haunted world:
http://www.amazon.com/gp/product/0345409469/
visit randi.org
The deficit they're talking about is around 1% to 2% of the annual production. Assuming that you sell the reserves prior to selling the new crops, and put the unsold new crops in reserve, the reserves could last for decades with none of the stock being over a year old.
Of course that is a highly simplified view, but it does allow for multi-year deficits without actually running out of cocoa. Of course a low reserve also means that there could be serious problems if the yields are particularly bad one year. (But at least it's just cocoa. A staple crop would be an entirely different issue.)
I bet the US have "strategic military reserves" or something stacked up somewhere. As is usual in such cases, however, a conflict will break out in Europe... The pleasing thing is that the Swiss don't get to play neutral this time!
Cocoa is very labor intensive way more than you can reasonably expect and today these remote communities have roads to them. Farmers can now grow bananas, pineapples, passion fruit etc for a lot less labor and have it at port in just a few days. For this reason many cocoa farmers are cutting down their trees and replacing them with crops that are less labor intensive. Additionally the youth are looking to jobs in oil (such as in Trinidad) or in the cities.
What foods are similar to cocoa in terms of labor? Truffles, saffron, vanilla, good cheeses etc. all of which are very expensive comparatively. Nobody faults these for not being $3/lb or less
What's the solution? To pay the farmers more. Right now, Cocoa sells for approx $2800/ton and in my opinion it should be closer to $10,000 - $20,000 / ton. This means that a chocolate bar would sell for $6-10 depending on packaging. (We currently sell chocolate we make from cocoa from Chuao Venezuela where we pay $5.50/lb for the cocoa where the London market was around $1.40/lb so we paid the farmers four times the market rate.)
Don't be wooed by so called "fair trade" certification. When I see that, I know the farmers just got screwed. Why? With Fair trade the farmers get a premium of $150-$200/ton -- a price increase of 5%. On the other hand, the FT organization charges the farmers between $2500 - $10000/year for the certification and in personal experience I've only seen it at $10,000 / year. At the same time they charge $0.10/lb ($220/ton) to whoever imports it for it to maintain its FT certification and another $0.10/lb for thr use of the logos and trademarks. So FT gets $440/ton and the farmers get $200. Not so fair. Plus don't forget the farmers certification and of course the companies need to be certified too. Oh yea. The inspectors are $750/day plus travel.
So what to do? Buy good chocolate. A bar should be anywhere from $5-$15. You can't make really good chocolate without using great cocoa. You can't get great cocoa without paying a significant premium to the farmers -- often 2-4 times the NY or London terminal price. So you know they are paid well. You simply can't have a $1-2 chocolate bar after if has been run though the supply chain (stores, distributors, the factory, various cocoa brokers, etc.) and know the farmers were paid well no matter the certification.
Tomorrow: Mars announces Soylent Brown
Don't forget Ebola. The Ivory Coast grows a huge amount of the world's cocoa. It is right next door to Liberia. Most of the labor to harvest the cocoa crop is migrant labor from Liberia. Ivory Coast has closed its border with Liberia in response to the Ebola. So, the cocoa crop there is not going to be harvested unless the growers figure out another source of cheap labor. Stock up on chocolate now.
So you're saying we're at peak chocolate now? Can't we just build pipelines to get the crude into our factories? Maybe use solar energy in it's production?
My Wife's response:
"OK that's it, I'm cutting you and the kid off. More for me!!!"
Min
On the whole, I find that I prefer Slashdot posts to twitter ones because I don't get limited to 140 chars before
It's been this way for a very long time. It's easy to tell good ice cream from crap just by checking fat content. Higher end ice creams have much higher fat and calories. They also cost more because cream is a lot more expensive than air.
Are agnostics skeptical of unicorns too?
Wait, there's chocolate in Mars bars? I'm shocked.