Milk and Oil
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What has Peak Oil got to do with the humble cow and the milk she produces?
In a foretaste of what is to come, Robert Wiseman dairies, who have 20% of the British milk market, declared that half yearly profits were down 22% "as a result of higher fuel and raw material costs". The group's company outlook had this to say about petroleum based plastics:
"There have been further steep price increases in HDPE resin, which is used for the manufacture of our milk containers, with last month alone seeing a record increase of over �200 per tonne to �860 per tonne."
The BBC news website erroneously states that price per tonne had gone from �200 to �860 in a month. Even for oil, things are not that bad ... yet.
Nevertheless, that is a 30% increase in the price of resin in the space of one month. Undoubtedly, a lot of this can be put down to the effects of Hurricane Katrina on Gulf of Mexico production and refinement. The old saying goes that when America sneezes, Britain catches a cold, and this is evident on the international market for oil-based products such as plastics
Unlike its competitors, Wiseman did a foolish things in an era of rising energy costs and guaranteed its milk price to the supermarkets until January. This meant they had to take the financial hit instead of the customer. I guess they won't make that mistake again.
So, Katrina rolls over the Gulf of Mexico and the price of milk goes up in Great Britain. When Peak Oil rolls over the world, the price of everything goes up everywhere - at least until people stop buying them. It will be a bull market for dairy products in the years ahead. After all, you can dispense with foreign holidays, but people still need milk for a variety of tasty products.
Or perhaps we should call that a cow market?
What has Peak Oil got to do with the humble cow and the milk she produces?
In a foretaste of what is to come, Robert Wiseman dairies, who have 20% of the British milk market, declared that half yearly profits were down 22% "as a result of higher fuel and raw material costs". The group's company outlook had this to say about petroleum based plastics:
"There have been further steep price increases in HDPE resin, which is used for the manufacture of our milk containers, with last month alone seeing a record increase of over �200 per tonne to �860 per tonne."
The BBC news website erroneously states that price per tonne had gone from �200 to �860 in a month. Even for oil, things are not that bad ... yet.
Nevertheless, that is a 30% increase in the price of resin in the space of one month. Undoubtedly, a lot of this can be put down to the effects of Hurricane Katrina on Gulf of Mexico production and refinement. The old saying goes that when America sneezes, Britain catches a cold, and this is evident on the international market for oil-based products such as plastics
Unlike its competitors, Wiseman did a foolish things in an era of rising energy costs and guaranteed its milk price to the supermarkets until January. This meant they had to take the financial hit instead of the customer. I guess they won't make that mistake again.
So, Katrina rolls over the Gulf of Mexico and the price of milk goes up in Great Britain. When Peak Oil rolls over the world, the price of everything goes up everywhere - at least until people stop buying them. It will be a bull market for dairy products in the years ahead. After all, you can dispense with foreign holidays, but people still need milk for a variety of tasty products.
Or perhaps we should call that a cow market?
posted by Marcel at 9:39 AM
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