Coffee Prices Come Down as Peanut Butter Prices Go Up

J.M. Smucker Co. is cutting prices on its Folgers and Dunkin’ Donuts coffees by an average of 6%.
The price drop follows a recent weakness in the wholesale coffee market. The price of green, unroasted coffee beans had nearly doubled between 2010 and 2011 before leveling out. Smucker had raised its coffee prices 11% in May following a 10% hike in February. The welcomed price cut will only affect packaged coffee sold in stores, including the Dunkin’ Donuts brand that Smucker sells under a license — not the coffee beverages sold in Dunkin’ Donuts stores. Other coffee sellers are anticipated to follow suit in price cuts. Although Ohio-based Smucker still makes Smucker’s jams and jellies, Jif peanut butter and other products, but coffee is now their largest business segment.

In contrast to the dropping coffee prices the price of peanut butter is expected to skyrocket with peanut prices, soon to be more costly.
After searingly hot weather devastated the summer crop of Runner peanuts. Raw peanuts that cost about $450 a ton in 2010 now cost $1,150 a ton, according to USDA figures.
Americans eat about 1.5 million pounds of peanut products annually. The industry, according to the National Peanut Board, contributes more than $4 billion to the domestic economy each year.
The Wall Street Journal reports that high prices are expected to be passed down to consumers this fall. J.M. Smucker Co.’s Jif will boost wholesale prices 30%, Unilever’s Skippy brand will see a 35% increase while ConAgra Foods Inc.’s Peter Pan label will jump nearly 25%.