Food Business News - Oct 14, 2008 - (Page 1)

FoodBusinessNews ® NEWS, MARKETS AND ANALYSIS FOR THE FOOD PROCESSING INDUSTRY Economic meltdown roils commodity markets Convenience stores prove promising for private label KANSAS CITY - Plunging U.S. and foreign stock markets on Oct. 6 worse than the "Black Monday" in 1987 and increasingly reminiscent of the crash beginning in 1929 pulled commodity prices lower at last week's outset with many grain and oilseed futures trading down their daily limits. And this plunge was after President George W. Bush had signed into law the $700 billion rescue package. Since peaking in late June and early July, corn and soybean futures prices were down about 45% as of late last week, with corn the lowest since December 2007 and soybeans since September 2007, using a continuous nearby contract. Corn futures dropped about 18% the prior week. Chicago wheat futures prices were down about 57% from a late February peak and were at 15-month lows. A sell-off in stocks late Thursday and bearish crop production and supply/demand data Friday sent futures prices for many grains and oilseeds down their daily limits again at week's end. In more "normal" times, lower stock prices often meant stronger commodity prices, especially futures markets, as money was switched from one investment vehicle to another. But this year's situation appears much broader and deeper, geographically and financially. Analysts have attributed much of the recent commodity sell-off to liquidation of long positions by large hedge funds. Commodity investors are worried on many Continued on Page 37 17 Menu M calorie count c legislation proposed p 34 Beyond strained peas 49 4 MARKET WATCH Florida orange production million 90-lb boxes 2008-09 166.0 2007-08 2006-07 October 14, 2008 170.2 129.0 Source: U.S. Department of Agriculture Initial forecast was down 2% from 2007-08, up 29% from 2006-07. Another look at saturated fats Proponents of stearic acid, palm oil point to cholesterol effects I mproving the health image of saturated fats appears formidable. The American Heart Association lists both trans-fatty acids and saturated fats as "The Bad Fat Brothers" while the Dietary Guidelines for Americans also puts a limit on intake of these saturated fats. Yet some people in the food processing industry, especially proponents of stearic acid and palm oil, have taken on the challenge, although with different arguments. Stearic acid, a saturated fat, should be viewed as a "neutral fat" that may replace trans fat, a "bad fat," in food products, said speakers at the presentation "Scientific literature review of dietary stearic acid health effects and safety" given at the Institute of Food Technologists 2008 Annual Meeting and Food Expo in New Orleans. Stearic acid, the speakers said, is a "neutral fat" because it has little effect on cholesterol, either highdensity lipoprotein (H.D.L. or "good" cholesterol) or low-density lipoprotein (L.D.L. or Continued on Page 41

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Food Business News - Oct 14, 2008