Kellogg’s still OK making $4.99 per Phelps poster until 9/30/09
Monday, February 9th, 2009 at 7:49 am | By: Radical Russ
Maybe Kellogg’s didn’t get the message down to IT and Promotions to scrub their website of this Michael Phelps Poster Promotion. Or maybe they just like to bury the recall of their possibly Salmonella -tainted products under a deluge of Michael Phelps boycott news, but still make the money on the Michael Phelps promotion.
If I’m reading this promotion correctly, if I fill out a form and give them either ten bucks and proof I bought one box of Corn Flakes, or five bucks and three boxes of Corn Flakes, I can get a poster that is 6′10″ wide and 1′5″ tall? Where am I supposed to hang that up?
Let’s see, a box of 18oz cornflakes at my local Safeway cost $1.99, so under Plan A you’re out $12 and Plan B only costs $11.
And did you know that the corn cost of a box of cornflakes is less than 5¢ per box?
Since U.S. ethanol production uses field corn, the most direct impact of increased ethanol production should be on field corn prices and on the price of food products based on field corn. However, even for those products heavily based on field corn, the effect of rising corn prices is dampened by other market factors. For example, an 18-ounce box of corn flakes contains about 12.9 ounces of milled field corn. When field corn is priced at $2.28 per bushel (the 20-year average), the actual value of corn represented in the box of corn flakes is about 3.3 cents (1 bushel = 56 pounds). (The remainder is packaging, processing, advertising, transportation, and other costs.) At $3.40 per bushel, the average price in 2007, the value is about 4.9 cents. The 49-percent increase in corn prices would be expected to raise the price of a box of corn flakes by about 1.6 cents, or 0.5 percent, assuming no other cost increases.
(Yeah, we could do the sensible thing and legalize hemp, use it for biofuel, bring down food costs like Corn Flakes by using corn for food, while simultaneously opening the market to healthier hemp-based foods — Hemp Flakes! — but if we were doing sensible things there’d be no need to boycott Kellogg’s in the first place.
