Coffee supply runs chilly
Dean Hornbacher doesn't want to deny anyone their cup of morning coffee. But the president of Hornbacher's is up against a shortfall of two major brands because of far-reaching devastation of Hurricane Katrina, which struck the Gulf Coast on Aug. 29.
Dean Hornbacher doesn't want to deny anyone their cup of morning coffee.
But the president of Hornbacher's is up against a shortfall of two major brands because of far-reaching devastation of Hurricane Katrina, which struck the Gulf Coast on Aug. 29.
White signs hang from the coffee shelves at the south Moorhead Hornbacher's offering an apology that Folgers and Millstone, two top-selling brands, may be temporarily unavailable.
Cash Wise in Moorhead posted similar signs, warning customers that both brands are in short supply. In response, the store raised the price of a 34.5-ounce can of regular Folgers 90 cents, from $5.98 to $6.88. Hornbacher's hasn't significantly raised prices.
The shortage could have been worse, Hornbacher said.
"They thought it was a fairly bleak picture," he said. "But the communication we're getting now is better."
Grocery stores aren't the only casualties of a stifled supply chain. Whether its coffee, bananas, plywood or tires, area businesses are bracing for a supply shortage as the Gulf Coast rebuilds.
Folgers has begun rebuilding after processing and distribution work at its four coffee facilities in New Orleans was stalled for three weeks because of damage from Hurricane Katrina.
The company has two roasting plants, a distribution center and a warehouse in New Orleans, where more than 50 percent of Folgers coffee is roasted, according to the company's Web site.
New Orleans is one of the largest coffee ports in the United States, accounting for 8 percent of the world's supply.
Supervalu, the grocery retailer for Hornbacher's and Cash Wise, has put a purchasing cap on Folgers and Millstone.
"My understanding is they've got it partially back in business much sooner than expected," Hornbacher said of Folgers. "The shortages will be relatively short-lived. Some days we'll be missing a case of product, and then it will show up on the next shipment."
Customers on Tuesday stopped to read a sign attached to a bare shelf where cans of Folgers usually rest at Cash Wise. "Folgers coffee is out of stock," the sign read. A similar sign is posted for Millstone.
"Those are the only two that have been a big hit for us," said Cash Wise Manager Greg Jaroszewski.
Stenerson Lumber in Moorhead hasn't seen a supply deficit - yet. That could change when the Gulf Coast begins rebuilding in two or three months, said company President Les Stenerson.
The massive cleanup in the South has bolstered the plywood market, significantly raising the prices for plywood flooring, oriented strand board roofs and wall sheathing, and petroleum-based products like shingles, foam sheathings and plastics, Stenerson said.
"I don't expect to see supply issues for two or three months until they clean up and get rolling down there," Stenerson said. "We got a big supply chain in the country for all of our products."
Stenerson said the government could help lumber businesses by cutting duties and tariffs on Canadian lumber imports.
"They're a big supplier of our lumber or timber," he said.
Fargo's Simonson Lumber Co. isn't too concerned with a supply shortfall after stockpiling its product before Hurricane Katrina, said Assistant Manager Chris Vigness.
The company does anticipate reduced supplies from distributors in the next two months, though, Vigness said.
"It's been fairly normal. Right away after it happened, some goods jumped in price," Vigness said. "But just this week, those prices have come down a little bit."
Fargo Tire Services anticipates a supply shortage of Goodyear tires after the company slashed production by 30 percent Monday. Goodyear, the world's largest tire company that employs 75,000 worldwide, reduced its production after Hurricane Katrina disrupted the supply of raw materials, according to a company release.
"Most of what we get is not produced in factories in the South," said Paul Anderson, Fargo Tire Service vice president. "So far, it has not affected us. Could it affect us in the future? Yes it could."
Readers can reach Forum reporter Joe Whetham at (701) 241-5557