Numlock News: September 18, 2023 • Ding Dongs, Poirot, Champagne
By Walt Hickey
Welcome back!
Mississippi
Roughly 60 percent of the United States’ exports of grain are transported to market by barge down the Mississippi River to New Orleans. It’s a remarkably efficient way of moving grain; your standard group of 15 barges traveling downriver can carry as much cargo as 1,000 trucks, efficiently and economically. The river north of St. Louis remains deep enough to handle barges pretty consistently thanks to a series of locks and dams ensuring a 9-foot-deep channel, while to the south of it river levels can be volatile. That’s happening right now, as hot and dry weather has pushed the Mississippi to levels so low that barge companies have to cut their loads in order to not hit bottom, which has sent the cargo rate from St. Louis to points south up 77 percent compared to the three-year average.
Scott McFetridge, The Associated Press
Twinkie
Half of Americans have three or more snacks per day, up 8 percent over the past two years, and U.S. sales of snacks were up 11 percent last year to hit $181 billion. That trend is one reason that Hostess saw annual revenue rise 60 percent from 2018 to 2022, and one reason that the company was bought for $4.6 billion by J.M. Smucker. There’s never been a better time to be in the Ding Dong business, as the Twinkie Industrial Complex has triumphed and large food companies are looking once again toward snacks to boost margins. It’s a wager that puts the companies on a bit of a collision course with a novel class of drugs that, by all accounts, seem to be remarkably effective at getting consumers to cut back on the very snacking these companies are betting their business on.
Jesse Newman and Ben Cohen, The Wall Street Journal
Poirot
A Haunting in Venice made $14.5 million at the domestic box office in its opening weekend, roughly the same as the $14.7 million made by The Nun II in its second. The star-studded adaptation of an Agatha Christie story called “Hallowe’en Party” had made a total of $37.2 million globally, which is still below the $60 million it’s been budgeted at, and not exactly the return to form that the producers had hoped after Death on the Nile underperformed. Elsewhere, Barbie remained in the top five for its ninth consecutive week despite arriving on home video and streaming rentals.
Insured
This year the United States has seen 23 weather disasters that cost over a billion dollars, with the aggregate bill hitting $57.6 billion. Insurance companies are increasingly bailing on weather disaster hotspots, with some pointing to the ramifications of climate change fueling the frequency or intensity of weather events that can force massive payouts. The thing is, though, that insurance companies are major investors and underwriters of the very fossil fuel industry that produces the emissions that exacerbate climate change: In 2019, for instance, the U.S. insurance industry invested $582 billion in oil, gas, coal and utilities, reinvesting customers’ premiums.
Arielle Samuelson and Emily Atkin, HEATED
Speed Bumps
The typical link on the social platform X, better known as Twitter, takes 39 milliseconds to redirect through the service’s URL shortener. For several websites that X’s ownership considers to be rivals, though, it’s a different story; links to rival social networks Bluesky, Facebook, Instagram and even Substack are taking orders of magnitude more time to load, averaging 2,544 milliseconds to redirect. This effect was not seen on other URL shorteners, like Bitly, and is evidence that Twitter is deliberately throttling links to its perceived rivals. A 2017 Google survey found that adding a two-second delay to page load times increased the probability a user abandoning the site by 32 percent.
Jon Keegan, Dan Phiffer and Joel Eastwood, The Markup
Icebreakers
The U.S. Coast Guard has not launched a new heavy icebreaker since 1976, and as the existing fleet of icebreakers reach the end of their lives, a $13.3 billion program is endeavoring to build out the icebreakers available to the U.S. government. The issue, though, is that the institutional knowledge of how to actually make the steel to make a ship that can endure the rigors of the Arctic is gone and must be relearned, and as a result the delivery of the first new icebreaker has been pushed from 2024 to 2028. The Coast Guard has two icebreakers, one that needs annual repairs and one nearing the end of its life; by comparison, Russia has three dozen.
William Mauldin, The Wall Street Journal
Champagne
LVMH, the largest makers of Champagne in the world owing to their Dom Pérignon, Moët & Chandon, Krug, Ruinart, Veuve Clicquot and Mercier brands, have warned that sales of bubbly are down. Overall, according to the Comité Champagne industry trade group, the industry as a whole is expected to ship 314 million bottles this year, which would be down 3.7 percent compared to last year. The nightclub markets remain especially strong, while consumption of Champagne in the home is where they’re losing ground. Last year also saw boom times for Champagne, as the acute impacts of the pandemic gave way to mass consumption.
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Grain exporters should remember that the Great Lakes have ports that serve the St. Lawrence Seaway & can potentially ship cheaper than trying to pay the over-the-top rates to go down the Mississippi. Exports from Thunder Bay, Ontario are hopping this year - and the same could happen in Duluth if people would consider the overall costs.