Food Business News - December 17, 2013 - (Page 28)

Market Insight Corn sweetener prices will be lower in 2014 Record crop, lower sugar prices are adding pressure to the corn sweetener market he generally complicated sweetener picture (sugar and corn sweeteners) appears to be entering 2014 with at least one aspect becoming clearer - corn sweetener prices will be lower than in 2013. That's largely due to a record 2013 U.S. corn crop, but also contributing pressure are continued below-year-ago sugar prices, and uncertainty about sugar and corn sweetener demand in Mexico, and ethanol, which affects corn and sugar. The U.S. Department of Agriculture in November raised T its estimate of 2013 U.S. corn production to a record 13,989 million bus, with some in the trade expecting that number to push above 14,000 million bus when annual revisions are made in January. That's up 30% from the drought-reduced 2012 crop of 10,780 million bus. While there are numerous factors in addition to the cost of corn that determine the price of corn sweeteners, buyers largely have focused on the size of the corn crop and the price of corn, with nearby corn futures down more than 40% from last December and down nearly 50% from record highs set in August 2012. In 2013 high-fructose and regular corn syrup prices were U.S. per capita caloric sweeteners estimated deliveries for domestic food and beverage use, by calendar year 120 in lbs 100 Sugar Total corn syrup 80 60 HFCS 40 20 0 Honey/Syrup 1971 1982 Source: U.S. Department of Agriculture 1992 raised by about 2½c a lb and dextrose prices were raised about 1c from 2012 contracted levels. (The dextrose increase was moderated by a larger boost in 2012 from 2011.) One of the key arguments for higher prices in 2013 was that corn supplies were tight, especially in areas where the bulk of corn wet mills were located. When corn refiners issued their initial 2014 pricing letters in early November (prior to the U.S.D.A.'s crop forecast), most products were offered at 2c to 2¾c a lb below 2013 contracted levels. Some refiners noted that other costs, especially rail freight, were higher this year (increased demand due to larger crops) and offset some of the impact of lower corn prices. 28 FOODBUSINESS NEWS ® But buyers have shown little concern about the impact of transportation costs. Some are holding out for 3c- to 4ca-lb reductions from 2013 contracted levels for 2014 corn sweetener prices. Before Thanksgiving there had been barely a trickle of 2014 contracting, with indications of a couple of deals down 3c 2002 2012 a lb from 2013. At that point, most corn refiners still were not moving from their initial offers of 2c to 2¾c a lb lower. But since the holiday, it appears buyers may have dug in a little deeper to the idea they can do better than 3c lower. At the same time, there appeared some movement that would result in deals being completed at the 3c-a-lb discount to 2013, if for no other reason than to get contracts concluded before the Christmas break. In some years, corn sweetener contracting for the next year is completed before Thanksgiving. In a few years it has continued into the new year. Buyers noted that in most recent years, the longer the negotiation period December 17, 2013

Table of Contents for the Digital Edition of Food Business News - December 17, 2013

Food Business News - December 17, 2013
Post acquisition binge continues
WhiteWave Foods to acquire Earthbound Farm
New U.S.D.A. action plan targets Salmonella
Table of Contents
Web Contents
Editorial - Potential exists for a great 2014
Sysco to acquire US Foods in $8.2 billion deal
Pepsi ousts Coca-Cola at Buffalo Wild Wings
Kroger sees greater opportunity in ‘natural’ portfolio
Diamond Foods continues to struggle
C.D.C. taking food safety surveillance to food service
Use of antibiotics in meat animal production may be ending
Pizza: The next big thing in fast-casual?
On-line sales looming for food
Bob Evans Farm on the brink?
Post acquisition binge continues
Breaking in to breakfast
Global trends to watch in 2014
Yogurt makers pump up protein claims
Market Insight - Corn sweetener prices will be lower in 2014
Ingredient Innovations - Mimicking mother’s milk
Sodium reduction: A little goes a long way
Beverage Business News - Wellness beverages
New Food Products
Ingredient Market Trends - Nature’s bounty, nature’s wrath
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - December 17, 2013