Update for Chapter 1 News Article: Multinationals Bet on Brazil by J7G2UPN

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									Update for Chapter 7 News Article: Anxious Days in Potatoland: Competitive
Forces Threaten to Knock Idaho from Top. New York Times, April 12, 1997.


1996 marked the low-point of potato prices in the last ten years. As the original article
suggested, supply far outstripped demand in that year, causing production costs to be
three times higher than the market price for every hundred pounds of potatoes produced.
Studies have shown that the amount of production has a striking negative correlation to
the price of potatoes. According to the National Agricultural Statistics Service, potato
prices in the U.S. were correlated in this way for 18 out of the 20 years between 1982 and
2001.

Another factor influencing the downward trend in the price of potatoes in recent years is
the widespread popularity of the low-carbohydrate diet. More than 17 percent of
American households report that one or all of their members are on a low-carb diet.
Industry experts also assert that unstable growth in the french-fry market has hurt sales.
Moreover, families are spending less time cooking at home, and demographic changes in
family composition have contributed to declines in the use of fresh, home-cooked
potatoes.

Recently, the U.S. Potato Board has launched a $4 million educational campaign to
express the health benefits of eating potatoes. The advertisements are attempts to restore
American’s faith in the potato as a “naturally nutritious" and “always delicious”
vegetable. Going forward though, the U.S. Potato Board warns that the baby boom
generation is aging quickly and will likely have different tastes than for french fries,
which account for more than half of potato sales in major U.S. markets.


Sources:

Pavlista, Alexander D. Potato Pricing and Production. Nebraska Potato Eyes. Spring
        2003.

Russell, Betsy Z. Idaho Potato Ads Emphasize Nutrition, Fitness to Counter Low-carb
       Concerns. Knight Ridder Tribune Business News. November 8, 2004.

Fort Kent, Maine, Potato Plant Closure Causes Ripple Effect. Knight Ridder Tribune
       Business News, August 13, 2004.

Mack, Sharon Kiley. Maine Potato Farmers Request $750,000 to Protect Crops. Knight
      Ridder Tribune Business News. March 31, 2004.

King, Anna. Washington State Potato Industry Reacting to Simplot Closing Plant.
       Knight Ridder Tribune Business News. March 12, 2004.

Begun, Bret. Revenge of the Potato. Newsweek. March 1, 2004.

								
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