Farmer Brown here…
Howard Schultz may know a thing or two about agricultural commodities…his company Starbucks consumes quite a bit of them and sources them from all over the world. He’s also neck deep in consumer demand trends with 17,000 stores under his thumb.
Here’s what he had to say in the Telegraph about ag prices right now:
Mr Schultz, who is also Starbucks’ chief executive and chairman, said that the current spike in the cost of commodities such as coffee and other foodstuffs is “not based on supply and demand” but based on market speculation. He said that the farmers who actually produce the commodities are receiving a “de minimus” proportion of the price rises.
“Right now we are experiencing a very strange and almost inexplicable phenomenon in the commodities market. Without any real supply or demand issues we are witness to the fact that most agricultural food commodities are at record highs at once, and coffee is at a 34-year high,” he said.
Schultz’s view is that the “speculators” and financial players are behind these sky-high prices, no mention of the dollar anywhere in the interview.
hat tip Nick