Tuesday, July 24, 2007

Popcorn Prices Popping But It's All Hot Air

The media still doesn't get it when it comes to food price issues. They lead with sensational claims to scare the public and boost ratings but when the math is done, it's all just hot air. FoxNews.com ran a story this month proclaiming the increase in popcorn costs are due to the demand for ethanol.

Its leading thesis: "A trip to the local Cineplex may become even pricier soon thanks to surging popcorn costs."

The story bolsters its outlandish claim by interviewing Dennis Kunnemann, president of AK Acres Popcorn, who discusses the increase in costs his company has to pay for popcorn this year:
"This year, we've paid the highest price ever that I've contracted for, 13 cents a pound," compared with 9 cents per pound last year, Kunnemann added.
The article did not continue on to explain what this small increase might do to the final consumer cost. So based upon the raw numbers cited, one might rightfully assume that the $6.00 tub of movie popcorn is going to cost 4 cents more this year due to the increased price paid to farmers. That's less than 1 percent. And that also assumes that the full pound of popcorn is actually used in that tub.

So a family of four going to the movies, buying popcorn and four sodas, the total cost might be close to $50.00 (4 tickets @ $8, 4 sodas @ $3 each and the popcorn tub at $6). That 4 cents is now less than 1/10 of 1 percent cost impact of the total costs of going to the movies.

The article also failed to mention other cost drivers this year which have been shown to be increasing food costs, especially increased fuel, energy and labor costs.

It's a good bet that the increased cost of driving to the theater due to higher gasoline costs will cost a whole lot more than just 4 cents.

For this phony food article at FoxNews.com, we give it TWO THUMBS DOWN!



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