Some Perspective on Food Prices

Food prices sure have been going up rapidly and the pinch is on everyone except farmers. At a time like this it is good to put things in perspective, because food prices have been low, many would say unnaturally low, for a long time.

There are almost daily articles in the papers about different companies raising prices. If you look closely though, you will see how long it has been since prices were last raised. There was an article in the April 3rd issue of Nihon Shokugyo which said that milk prices were being raised for the first time in 30 years. In the April 19th issue of Nihon Keizai Shimbun, an article announces that Kentucky Fried Chicken was raising prices on chicken for the first time in 16 years.

Metabolic Syndrome and Japanese Companies

Here is an article from the International Herald Tribune which is pretty much right on the money from my experience. Starting last year, waist measurements became a part of annual physical examinations in Japan and all the people in my company received pedometers to encourage walking and exercise.

Many companies will face a penalty from the government if their workers do not on average make improvements, but for food and pharmaceutical companies this is also an opportunity to boost sales for products which help fight metabolic syndrome. Such products have been on the market for years now, but this new government policy is definitely giving the whole category a boost.

Only a few years ago, one would never hear the term metabolic syndrome except in scientific conversations, but these days it is a very common topic of everyday conversation.

Actually, I have read some unpublished reports on the development of definitions and standards for metabolic syndrome which are very interesting, but that is a topic for another day.

J's Garden

I have mentioned the fact that restaurants and food manufacturers are trying to cut down on ingredient costs by reducing the size of offerings. The other day I happened to eat at a J's Garden restaurant near Enoshima. It was the first time I had ever eaten at a J's Garden before. It does not look that different from many other family restaurants and although it specializes in pasta and pizza, it has a nice variety of items on the menu.

I ordered with the expectation of receiving Japanese portions or newly reduced Japanese portions as I have seen recently, but was surprised to receive something closer to American portions - unusual in Japan. J's Garden is part of the Johnathon's Family Restaurant group. I checked on the website and it looks like the locations are mostly in residential areas, so there is a better chance of coming across one in a car than near a station.

I give it a thumbs up compared with other family restaurants.

Rose Oil Gum and Old Man Smell

Kracie is selling gum aimed at older men who don't want to smell like older men. I looked up the main ingredient, geraniol, and it is the main component of rose oil and is used in some perfumes, various flavorings and even tobacco, but I am not sure why it is supposed to have a specially good effect for masking old man odor or "otoko kusai" (オトコくさい).
As I remember, another company isolated the main ingredient responsible for old man smell, but I am not sure what product resulted from that discovery.

Grades of New Tea

This is a picture from the same store as shown in yesterday's post. Although not readable from this picture, this stand is displaying 2 types and 4 different grades of Shizuoka tea.

The two types of tea featured are Saemitori and Yabukita and each is priced 840 to 2,100 yen based on grade. The Saemitori is said to have a strong umami taste and low astringency. The Yabukita is said to have a strong aroma and a nice balance of umami and astringent tastes. The only difference mentioned for the high grades is that they are hand picked.

These are typical grades, but if you ask the shopkeeper, much more expensive grades are also available.

Spring Tea Harvest

The local tea shops in Japan all have banners out in front announcing the "new tea" or newly harvested tea leaves. People who really like good tea will spend a lot for good, fresh tea leaves. There are multiple grades of tea which are difficult to understand and often are specific to the store.

Shizuoka and Kyoto are easily the most well-known region for tea production in Japan, but other areas such as Kyushu also produce tea.

Horse Meat

I just happened to come across this restaurant the other night. It was very late, so I didn't have time to give it a try. Anyway, even though the sign says that it is an "izakaya" or drinking and eating establishment, without any windows it looks more like a "sunakku" or private club.

In any case, I thought it was interesting because the specialty is horse meat. It is not unusual to see horse meat in Japan, but this is the first time I have seen a horse meat specialty restaurant. While I assume there are others, it is still not an everyday sight.

　

This restaurant is named Pops and it claims on the sign that the food is imported directly from Kumamoto (Kyushu).
　

For those who have trouble distinguishing between Asian countries and their cuisine, Japanese do eat whale and horse, but other animals such as dogs, cats, rats, etc. are never found for sale in Japan.

Floods in the US and Commodity Prices

Just as some people had been hoping that commodity prices and oil prices might have peaked, we are now seeing historic flooding in the US Midwest. Many farmers who might have been enjoying the high prices for corn and other commodities are now losing their crops and in some cases their homes.

Very sad, but it is also going to have a ripple effect - first on the crops directly effected, corn and soy, then on other grains as well, since there is a certain amount of interchangeability. It might also have an effect on oil prices as corn is increasingly being used for biofuel. Corn prices have reached 7 dollars per bushel for the first time ever, and oil prices are now being predicted to reach 140 dollars per barrel (although I have not seen a flood-oil price link referred to yet).

Higher Profits on Higher Food Prices?

According to this article in Investopeida, US food producers are showing increased profits resulting from higher prices. Heinz raised prices 4.5% and saw net income increase 7%. General Mills has seen a 17% earnings gain at the same time it was reducing box sizes to offset higher ingredient prices. If that works for them, great, but in Japan, the talk at many companies is simply how to stay profitable.

The article credits brand loyalty and stronger oversees sales. I am not in marketing, but I would guess that brand loyalty is not nearly as strong in Japan, because a culture of always trying something new has been cultivated. Consumers see a price they consider too high or a box they think is not as big as it should be and they simply buy something else.

Japanese Dairy Farmers are Also Squeezed

Japanese dairy farmers are also being squeezed by high food prices, or at least the Japanese government thinks so. According to this article, the 187.1 billion yen in supports for dairy farmers and stockbreeders, which was already up 63.2 billion yen from last year is going to be raised an additional 70 billion yen. These are mostly in the form of unit-subsidies.

I feel sure the butter shortage has also influenced this move, although any boosts in production will lag far behind a stimulus - especially in the dairy industry, where you cannot exactly plant more cows next year, you have to breed more herds of dairy cattle to make a difference.