Sugar and Cream With Your Coffee? How About a Light Fixture?
Many of us begin the day with a similar routine. We walk into a coffee shop and fork over 2 bucks for a little pick-me-up.

"You want sugar and cream with that?" the barista asks.
Apparently, how you answer that question is of no consequence to the coffee house's bottom line based on a profit breakdown recently released by the Specialty Coffee Association of America.
The cream AND sugar make up just four pennies of a $1.85 cent cup of coffee. Advertising that cup costs five cents, having the barista pour it is 33 cents, and the actual cup and lid runs 16 cents.
In fact, the raw commodities in the coffee—except for the 64 cents paid for the coffee itself—are the least expensive part of the transaction.
Of course, as Americans we don't even blink an eye at paying $2 for 64 cents worth of coffee. That's because we spend a smaller percentage of our incomes on food and beverages than anywhere in the country.
Homi Kharas, with the Brookings Institute, summed up this success story in a recent interview with National Public Radio (NPR) about rising global food prices.
NPR reported: "[Kharas] says that when a U.S. consumer buys a box of cereal or a cup of Starbucks coffee, she is mostly paying for the packaging, marketing, and attractive store fixtures. So the shopper is not greatly affected by the underlying commodity price..."
Such an observation from a Brookings Institute expert is noteworthy because the group has previously criticized U.S. farm policy, which makes it all possible, for driving down global commodity prices.
A similar surprising statement was made in a recent op-ed by the German Marshall Fund, which routinely bashes farm policies but is now citing America's relative isolation from escalating commodity prices.
"The price of corn in your corn flakes and other retail products is so small that even a tripling of crop prices has little effect at U.S. grocery stores," wrote one of its fellows in the Washington Post piece.
Talk about a farm policy yo-yo.
So are farm policy opponents coming around and starting to sing the praises of America's cheap, abundant food supply, which makes it the envy of the world?
Don't count on it. Food manufacturers from major companies are convening in San Diego this week to strategize on how to eliminate U.S. sugar policy, eek out higher profit margins, and leave America dependent on foreign sugar producers.
Seems rather silly to be doing this at a time when worldwide sugar supplies are tight, "parasitic" sugar speculators are creating a stir in the marketplace, and global commodity prices are high enough to spark riots.
Seems even sillier when you consider that U.S. grown sugar remains so inexpensive today that you could walk into any coffee house in America and dump 100 sugar packets in your coffee for free...not that we'd ever advise doing that.
 
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