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Marketing Minute
03/04/2010 - European barley intervention stocks, sugar coated fries, fortune cookies did not originate in China and how to increase the value of potatoes.
The Europeans have adopted a Common Agricultural Policy which is often called by it’s abbreviation “CAP”. One of the CAP policies is the grain intervention stocks. In theory, intervention stocks are to be used for 2 purposes. One is to store grain to be used as food stocks and the other one is to smooth out market fluctuations. When grain prices are low, grain is taken off the market by purchasing it for intervention stocks. When prices rise, the theory is that the intervention stocks can be used to control the rate at which prices go up. The intervention purchase price becomes the floor price for European grain. Prices should not fall below the intervention price because farmers will sell the grain for the intervention price and have no need to sell it below the intervention price. The cost of storing and buying grain has been a drain on the European Union treasury. The low barley prices this year has lead German farmers to sell more barley into the intervention stocks than was purchased by all of the European Union last year. This year will be the last year of intervention barley stocks. Some trade sources think that the Europeans could end up with between 6 and 7 million tonnes of barley in intervention stocks when the programme ends. The good news is that the intervention programme is ending. The bad news is that the stocks in intervention will hang over the market acting as a lid on global barley values.
Trivia Facts:
Fortune cookies were invented in 1916 by George Jung, a Los Angeles noodle maker.
Chocolate manufacturers currently use 40 percent of the world's almonds and 20 percent of the world's peanuts.
In the United States, a pound of potato chips costs two hundred times more than a pound of potatoes.
McDonalds and Burger King sugar-coat their fries so they will turn golden-brown.
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PREPARED BY THE NORTH EAST TERMINAL MARKETING TEAM
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