A salmonella outbreak is linked to peanut products and nine people die. As a result consumers start to avoid your products. Naturally you expect profits to fall. This could be the story of any number of crops produced this year. However, this is the story of peanuts, and according to a recent report by the Associated Press, this story could have a happy ending.At one point, reports the AP, peanut farmers were expecting $1 billion in losses. This number has turned around dramatically, and the farmers attribute this to the bad economy and “more people reaching for peanut butter as a cheap lunch.” Peanuts used in snack foods associated with the outbreak have seen their numbers drop as the accounting year ended on July 31. Yet, peanuts used for peanut butter “set an all-time record at 1.1 billion pounds, topping the previous year’s total by 100 million pounds.”
That’s a pretty good turn-around, whatever the reason. These numbers “make the year’s overall peanut production the third-highest in history.” One percentage point separates this year from the record year of 2005.
This is certainly not the end the industry would have predicted after the salmonella outbreak “led to one of the largest product recalls in U.S. history.” Fearing a long-term drop in income from peanut products, the industry launched a public relations campaign “to convince people the contamination was isolated.” While sales of peanut snacks did drop, sales of peanut butter have helped the year turn around in such a positive manner after the product rebounded from an initial drop in sales following the outbreak. Sales were back to normal by March and remained high through the summer and fall.
‘"There's an old adage in the industry that you can almost track the economy by consumption of peanut butter,’ said Stanley Fletcher, a peanut economist at the University of Georgia. ‘It's basically the cheapest source of protein.”’
To read the article by the AP click here.
Posted: 10/20/09
