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View Full Version : Had a big meeting today........(A rant.)


BlueStreak
05-13-2011, 12:34 AM
We had our annual "State of the Business" meeting with all of the big wigs at work today. I'm not going to go through the whole thing, because it was two hours long and would bore you to death. Especially if your not familiar with the coffee business.

The thing that has stuck in my mind all day long is this. We were told that the company had a record year in 2010 and the first quarter of this year as far as growth and productivity goes, and we are looking forward to potentially better second and third quarter this year. We have accrued more than 17 million pounds of additional volume from one customer, and nearly 35 milion pounds from a new customer for the upcoming year. Cost saving goals have been met, and efficiency teams (OEE and CI, of which I am a part.) have made significant strides over the last year.

Sounds great, Huh? I thought so, until I heard this.....

"However, our earnings have been disappointing. We've barely broken even. Can anyone tell me why?"

Someone guessed "Taxes".---"Nope, our tax liabilities have not changed."

"Labor costs"---"Well there has been an increase in overtime, but that is commensurate with our increase in volume. So, no."

Another person said, "Fuel Costs."---"Well, that's part of it, but not the worst part. The price of fuel does push up the price of everything. But, that's not what is killing us."

"Okay, here's what it is."

"The worst part is commodities speculation. Folks on Wall Street buying green coffee, then reselling it at a higher price. That's all they do. They never even see what they bought. They don't do anything with it. These people basically produce nothing. All they do is artificially run up prices. And the price of green coffee has been jacked up nearly 200% over the last year, doing serious damage to profitability throughout the entire industry, despite everyones hard work. So far were managing, but if it continues much longer it makes the future very uncertain, things could get very tough......."

But, no...no.... I get on the internet, go to a political board similar to this one and post that I'm worried about my job, and what do I get from my fellow Americans?

"Damn unions..........."-(We have no union.)

"F**kin' Obama........."-(Didn't know he's a commodities trader.:rolleyes:)

"Well, if you #@*&^% people would just do your *^%$# job!!!!"-(We do our jobs and do them damn well. That has NOTHING to do with it.)

You know, I am really getting tired of this shit. If I lose this job, it will be the second time I have lost a good job, through no fault of my own and had to listen to ignorant people heap all of the blame on me and my coworkers. Why do they do it? Because they believe all of the bullshit they hear from people like Limbaugh, Boortz, Hannity, et al. And I'll leave the reason why THOSE assholes do what they do up to your imagination.

The first time it was because the clowns at corporate went on a reckless aquisition spree, buying up every friggin' automotive parts company that went up for sale, with heavy debt and somehow managed to take on three billion, that's right BILLION with a "B", worth of asbestos claim liabilities. Went bankrupt and sold our division to a Canadian company that took the contracts and equipment home with them, because they had people at home that needed the work. (And I don't blame them for that.)

But, for years, every time I mentioned this to people I would get the same brainwashed stupidity----"Serves you right, you lazy $%#&^!!!" etc, etc, etc........

Where does it end? When are we gonna snap out of it? Huh? Because I'd really like to know.

Dave

HatchetJack
05-13-2011, 06:14 AM
I dunno Dave. People like you and I leave a little money in an IRA or mutual
fund because that's what we were led to believe is the best longterm. Now
that is just free money for them to move around and manipulate to their
advantage all the while costing us more at the pump and the Mr Coffee ect..
What do we do? Blame the right, vote for the left and get no change?
Organize a grass roots movement to stand up for what you believe in only
to be made out to be fools or evil by the media? We need something bigger,
a movement where we cash out and demand US made products. Total
boycotts of things not to our advantage. Are we as citizens going to do
that, NO so we get what we got.

Combwork
05-13-2011, 07:02 AM
I dunno Dave. People like you and I leave a little money in an IRA or mutual
fund because that's what we were led to believe is the best longterm. Now
that is just free money for them to move around and manipulate to their
advantage all the while costing us more at the pump and the Mr Coffee ect..
What do we do? Blame the right, vote for the left and get no change?
Organize a grass roots movement to stand up for what you believe in only
to be made out to be fools or evil by the media? We need something bigger,
a movement where we cash out and demand US made products. Total
boycotts of things not to our advantage. Are we as citizens going to do
that, NO so we get what we got.

Same in the U.K. Those who produce bugger all make the most money. I don't see how a boycott could help; as these leeches only acquire things on paper, there would be no tangible goods to boycott.

noonereal
05-13-2011, 07:04 AM
We had our annual "State of the Business" meeting with all of the big wigs at work today. I'm not going to go through the whole thing, because it was two hours long and would bore you to death. Especially if your not familiar with the coffee business.

The thing that has stuck in my mind all day long is this. We were told that the company had a record year in 2010 and the first quarter of this year as far as growth and productivity goes, and we are looking forward to potentially better second and third quarter this year. We have accrued more than 17 million pounds of additional volume from one customer, and nearly 35 milion pounds from a new customer for the upcoming year. Cost saving goals have been met, and efficiency teams (OEE and CI, of which I am a part.) have made significant strides over the last year.

Sounds great, Huh? I thought so, until I heard this.....

"However, our earnings have been disappointing. We've barely broken even. Can anyone tell me why?"

Someone guessed "Taxes".---"Nope, our tax liabilities have not changed."

"Labor costs"---"Well there has been an increase in overtime, but that is commensurate with our increase in volume. So, no."

Another person said, "Fuel Costs."---"Well, that's part of it, but not the worst part. The price of fuel does push up the price of everything. But, that's not what is killing us."

"Okay, here's what it is."

"The worst part is commodities speculation. Folks on Wall Street buying green coffee, then reselling it at a higher price. That's all they do. They never even see what they bought. They don't do anything with it. These people basically produce nothing. All they do is artificially run up prices. And the price of green coffee has been jacked up nearly 200% over the last year, doing serious damage to profitability throughout the entire industry, despite everyones hard work. So far were managing, but if it continues much longer it makes the future very uncertain, things could get very tough......."

But, no...no.... I get on the internet, go to a political board similar to this one and post that I'm worried about my job, and what do I get from my fellow Americans?

"Damn unions..........."-(We have no union.)

"F**kin' Obama........."-(Didn't know he's a commodities trader.:rolleyes:)

"Well, if you #@*&^% people would just do your *^%$# job!!!!"-(We do our jobs and do them damn well. That has NOTHING to do with it.)

You know, I am really getting tired of this shit. If I lose this job, it will be the second time I have lost a good job, through no fault of my own and had to listen to ignorant people heap all of the blame on me and my coworkers. Why do they do it? Because they believe all of the bullshit they hear from people like Limbaugh, Boortz, Hannity, et al. And I'll leave the reason why THOSE assholes do what they do up to your imagination.

The first time it was because the clowns at corporate went on a reckless aquisition spree, buying up every friggin' automotive parts company that went up for sale, with heavy debt and somehow managed to take on three billion, that's right BILLION with a "B", worth of asbestos claim liabilities. Went bankrupt and sold our division to a Canadian company that took the contracts and equipment home with them, because they had people at home that needed the work. (And I don't blame them for that.)

But, for years, every time I mentioned this to people I would get the same brainwashed stupidity----"Serves you right, you lazy $%#&^!!!" etc, etc, etc........

Where does it end? When are we gonna snap out of it? Huh? Because I'd really like to know.

Dave

another excellent post

wall street is killing american i can't see how anyone can disagree

trading has become a gimmick not a business investment. Speculation is but one "game".

piece-itpete
05-13-2011, 08:59 AM
So, what do we do? Set prices by government fiat?

....."F**kin' Obama........."-(Didn't know he's a commodities trader.:rolleyes:)
...

That would be Hillary :p

Pete

CarlV
05-13-2011, 10:11 AM
Coffee prices here have pretty much doubled in the last year and I have not heard of any real causes for this to happen. So price gouging occuring makes a lot of sense. Hope you aren't part of any cost cutting to appease stockholders.


Carl

d-ray657
05-13-2011, 11:14 AM
Broken record here, but our economy has become distorted to the extent that it values making money well above making products. How many of the richest people have been hedge fund managers?

Regards,

D-Ray

BlueStreak
05-13-2011, 11:28 AM
Carl and Hatchet,

But it's not price gouging on the part of my, or any other coffee manufacturers, part. This is people who have absolutely NOTHING to do with the business and contribute NOTHING to it, buying up the green beans before they leave the exporting nation, simply to hold it and drive up the price so they can resell and make money. Boycotting the product at the store would only do further damage to the domestic industry, and leave the real culprits unscathed.

There is nothing illegal about what they are doing. Unethical, perhaps, but not illegal. Anyone who wants to buy green coffee can do so. Really, this wasn't even the point of my post.

My point was this;

When are we going to stop blaming the wrong people for everything?

If my company and others go down the tubes over this, who gets blamed?

Obama has nothing to do with it.

The government has nothing to do with it.

"Welfare Queens" and elderly Medicare recipients have nothing to do with it.

Unions have nothing to do with it.

Liberals have nothing to do with it.

Gays have nothing to do with it.

"FemiNazis" didn't buy up those companies that carried toxic liabilities.

In both examples, who was it that did the damage?

WAS IT ME? NO!

Oooooo, don't you dare point a finger at those sacred cows. Blame them and conservatives have a fit. Because those are the people who-------create jobs:confused:?????????

Dave

BlueStreak
05-13-2011, 12:06 PM
I'm just a bit upset after that meeting, Fellas. You work hard, do everything right, and still some jackasses come along and ruin everything, just because they can. And then everyone blames you. It's so frustrating.

Dave

HatchetJack
05-13-2011, 12:32 PM
Well we could pull the plug on them by pulling our cash out but we see how
that worked out last time. Hell they spend all their money and ours too and
nothing we can do about it? One thing we don't talk about is the percentage
of profit retailers charge us. It seems no one crys foul over that but they
complain about interest on loans ect..
A tub of Folgers at Ingles is 11.99 right now while at Savelot it's 7.99 and
I assume they make a profit at that. What percentage are they making
off us?

d-ray657
05-13-2011, 12:41 PM
When I worked in retail (small department store) the average markup on clothing, shoes, etc, was about 50% (100% depending on how you look at it - half of the retail price). I think it was less on fragrances, because there were more middle levels in marketing that.

Regards,

D-Ray

BlueStreak
05-13-2011, 01:00 PM
Well we could pull the plug on them by pulling our cash out but we see how
that worked out last time. Hell they spend all their money and ours too and
nothing we can do about it? One thing we don't talk about is the percentage
of profit retailers charge us. It seems no one crys foul over that but they
complain about interest on loans ect..
A tub of Folgers at Ingles is 11.99 right now while at Savelot it's 7.99 and
I assume they make a profit at that. What percentage are they making
off us?

I don't know about retail, I'm talking about manufacturing. And at the moment our profit margin is almost ZERO, at the moment. It's people OUTSIDE the industry that are driving up costs. They didn't make your Folgers. They don't make anything, and most likely employ very few people, if anyone. They're little more than parasites. That's the whole point.

Dave

piece-itpete
05-13-2011, 01:02 PM
Dave, I don't blame you, for the record. Obama? Sure, why not :D

My main product line was decimated (with a direct impact on my pay) last year when a new competitor dive bombed the market. I'm still dealing with the fallout. Tough to have pay shrink.

Pete

whell
05-13-2011, 01:22 PM
Coffee prices here have pretty much doubled in the last year and I have not heard of any real causes for this to happen. So price gouging occuring makes a lot of sense. Hope you aren't part of any cost cutting to appease stockholders.


Carl

I think it might be a good idea to check our premises in this discussion. Yes, there has been a rise in food commodity speculation, including coffee.

http://www.espressocoffeeguide.com/2011/02/2011-coffee-prices/

http://www.bloomberg.com/news/2011-03-31/food-commodities-price-surge-seen-swamping-consumers-with-more-inflation.html

But there are many reasons to engage in commodity speculation. It is not simply individuals gaming the market. It is producers and food manufactures as well engaging in market speculation in an attempt to lock in prices that are beneficial (manufacturers ), which may ultimately benefit consumers.

Supply and demand are influencing commodity prices as much as anything, and speculators are responding to supply issues. Its a gambit either way for the speculators, particularly if they're buying in a short supply scenario, and then the market changes and the speculators take a beating.

I recall a few years back Post did a good job locking in grain prices when demand (and cost) was relatively low in the marketplace. Kellogg failed to do so, and as a result there was some great pricing competition at the retail level for cereal products that allowed Post of gain market share against Kellogg while creating a lot of value for the consumer.

Its the "bad" speculation (from the consumer perspective) that makes headlines. There are any number of examples that don't get the same press when they actually benefit the consumer.

finnbow
05-13-2011, 01:27 PM
I think it might be a good idea to check our premises in this discussion. Yes, there has been a rise in food commodity speculation, including coffee.

http://www.espressocoffeeguide.com/2011/02/2011-coffee-prices/

http://www.bloomberg.com/news/2011-03-31/food-commodities-price-surge-seen-swamping-consumers-with-more-inflation.html

But there are many reasons to engage in commodity speculation. It is not simply individuals gaming the market. It is producers and food manufactures as well engaging in market speculation in an attempt to lock in prices that are beneficial (manufacturers ), which may ultimately benefit consumers.

Supply and demand are influencing commodity prices as much as anything, and speculators are responding to supply issues. Its a gambit either way for the speculators, particularly if they're buying in a short supply scenario, and then the market changes and the speculators take a beating.

I recall a few years back Post did a good job locking in grain prices when demand (and cost) was relatively low in the marketplace. Kellogg failed to do so, and as a result there was some great pricing competition at the retail level for cereal products that allowed Post of gain market share against Kellogg while creating a lot of value for the consumer.

Its the "bad" speculation (from the consumer perspective) that makes headlines. There are any number of examples that don't get the same process when they actually benefit the consumer.

Yep, and Southwest Airlines did much the same with fuel prices. Economic analyses I've read all seem to favor the stabilizing effect of futures markets. I'm not fully convinced (nor am I convinced by any argument in "the dismal science"), but I haven't heard any real convincing counterpoints. Had your coffee company (or anyone else's) foreseen the price upswing and bought futures a year ago at low prices, they'd be bathing in profits.

HatchetJack
05-13-2011, 04:59 PM
Dave I don't doubt for a minute those speculators are mostly out for themselves
with some back room deals going on constantly. Whell makes a good point
also. One thing is for certain coffee has always had its ups and downs as
long as I can remember but more often than not it's pretty reasonable.
I bet the price comes down but not before a bunch of iphone golfer
traders allow it to. Dont let those big wigs put their stress off on you, it's
a lot more their problem than yours.
Usually there is a warning before it goes up and I buy a few tubs and stick
it in the freezer to get past the high prices but I got caught with my pants
down this go around. Guess I'm guilty on a smaller scale.

BlueStreak
05-13-2011, 11:47 PM
In reference to Whells post, I understand what he's saying, but I don't understand why a manufacturer would try to "lock in" an inflated price. This is raw, green bean I'm talking about, you can't buy it at a low price today, and then hold on to it for a year like you could crude oil, or steel---it's an agricultural product---it rots. Or am I just not understanding how it works? The more I think about it, the more confused I get. Mainly because;

There is one thing I forgot to mention. Our company owns a few plantations in South America and one in Hawaii, that supply our plant. So we do have some control over the cost of that coffee. It's only the stuff we get from other growers that would be affected, I guess. The normal "ups and downs" are usually due to weather conditions during the growing season. This is different. This is sustained increases over the last year, that have nothing to do with weather.

I dunno, maybe Hatchet is right. Maybe I just worry too much. I like my job, and I'd like to keep it. Know what I mean?

One upshot----I get a healthy employee discount on the Hawaiian (Kauai) coffee, 35%. I received a 5lb bag of whole bean in the mail yesterday. Even with the discount it cost me $44 + $12 shipping! Very good coffee, expensive, but worth it.:)

Dave

whell
05-14-2011, 05:27 AM
In reference to Whells post, I understand what he's saying, but I don't understand why a manufacturer would try to "lock in" an inflated price. This is raw, green bean I'm talking about, you can't buy it at a low price today, and then hold on to it for a year like you could crude oil, or steel---it's an agricultural product---it rots. Or am I just not understanding how it works? The more I think about it, the more confused I get.
Dave

Dave -

Note a paragraph from the first article I linked to:

"Inflationary concerns have led some countries to hold onto stocks of commodities in anticipation of future higher prices. Brazil has had about 1.2 million bags of Arabica coffee in storage since 2009 which was purchased from Brazil coffee farmers at the beginning of 2010 at a price of about $180 per bag to help boost coffee prices."

If this info is correct, it is quite possible to store coffee for the long haul. Maybe after processing the beans they can be stored.

As to you first question, if there is speculation in the market now, it may be fueled by the belief that prices have not peaked, and theres room left for additional inflation of the price. From what I've read, there's may be some credence to that. Also, since price hikes appear to be fueled by increasing demand, maybe that's good news for you and your employer?

finnbow
05-14-2011, 09:33 AM
In reference to Whells post, I understand what he's saying, but I don't understand why a manufacturer would try to "lock in" an inflated price. This is raw, green bean I'm talking about, you can't buy it at a low price today, and then hold on to it for a year like you could crude oil, or steel---it's an agricultural product---it rots. Or am I just not understanding how it works?

They (should) buy futures for the commodity when the price is low to lock in the low price down the road. When you buy a future, the coffee doesn't even need to be picked yet. It's an agreement to buy it at a future date at a price fixed today.

Remember the movie "Trading Places" with Eddie Murphy and Dan Ackroyd? It was all about manipulating the futures market on pork bellies and orange juice. Funny stuff.

BlueStreak
05-14-2011, 10:56 AM
Dave -

Note a paragraph from the first article I linked to:

"Inflationary concerns have led some countries to hold onto stocks of commodities in anticipation of future higher prices. Brazil has had about 1.2 million bags of Arabica coffee in storage since 2009 which was purchased from Brazil coffee farmers at the beginning of 2010 at a price of about $180 per bag to help boost coffee prices."

If this info is correct, it is quite possible to store coffee for the long haul. Maybe after processing the beans they can be stored.

As to you first question, if there is speculation in the market now, it may be fueled by the belief that prices have not peaked, and theres room left for additional inflation of the price. From what I've read, there's may be some credence to that. Also, since price hikes appear to be fueled by increasing demand, maybe that's good news for you and your employer?

We are adding five new packaging lines and some departments are going to 12 hour days later this year. That's why I was a bit confused, they present the "price" news as if it's going to be the death of us, but then announce increases in volume and reinstate the intent to spend millions more on expansion. Maybe the scare was just a bit of internal politics meant to motivate people? Anyhow, I do feel a little better about it today. Thanks.:)

Dave

d-ray657
05-14-2011, 11:15 AM
One upshot----I get a healthy employee discount on the Hawaiian (Kauai) coffee, 35%. I received a 5lb bag of whole bean in the mail yesterday. Even with the discount it cost me $44 + $12 shipping! Very good coffee, expensive, but worth it.:)

Dave

Actually $44 dollars for a 5 lb bag of premium beans sounds reasonable to me - particularly when you look at what they charge for an 8 oz. bag of whole beans in the grocery store. Whenever I get a little concerned about the price of coffee, I consider how much money people waste going through the drive-through to get a cup of battery acid from Starbucks.

Regards,

D-Ray

finnbow
05-14-2011, 12:18 PM
I consider how much money people waste going through the drive-through to get a cup of battery acid from Starbucks.

Regards,

D-Ray

QFT. It's amazing that it was Starbucks that started the gourmet coffee revolution here in the US when one considers their products, both in terms of quality and price. A simple shot of espresso or a Cappuccino is OK there (but overpriced), but their regular brewed coffee is simply awful (far too over-roasted for my tastes).

HatchetJack
05-14-2011, 01:20 PM
I always wanted to try roasting my own beans but that would require
buying green ones and I have no clue where to get any around here.

BlueStreak
05-15-2011, 12:09 AM
I always wanted to try roasting my own beans but that would require
buying green ones and I have no clue where to get any around here.

You'll most likely end up ordering them off the internet. There are a number of good companies to check out. Here are some that I have been looking at.

http://www.sweetmarias.com/instructions.php

http://www.breworganic.com/Coffee/HowToRoast.htm

http://www.coffeestorehouse.com/

http://homeroasters.org/

http://www.burmancoffee.com/index.html

Dave

HatchetJack
05-15-2011, 08:41 AM
Thanks, one of my beer brewing buddies has perfected a method of using
one of those whirly pop popcorn poppers over an outdoor propane burner.
The ones with the hand crank. Once I find one of those I will give it a try.
I had one for years and never used it so I sold it in a yard sale. Now
I can't find one although one will turn up at a thrift or yard sale sooner
or later.