Well, this makes me sad. I like my French fries (when asked at a restaurant if I want fries or salad with my meal, I don’t think I’ve ever said salad!), and with many restaurants closed or just allowing for pick-up/drive through, Canadian farmers have been forced to freeze nearly 200 million pounds of potatoes that were to become French fries because there’s no one to buy them. There is, however, some respite.
With more people at home, the demand for potato chips and fresh potatoes has actually increased, but it’s not enough to offset what restaurants would be buying – which is about 75% of the potatoes grown in Canada. Tubers are tough though, and can last for up to a year in proper storage.
In investment news, North American markets took a breather last week, ending relatively flat. The rally in equities during the previous three weeks was second only to the rally after the 2009 market low. The S&P 500 was off by 1.3%, the NASDAQ lost 0.2% and the S&P/TSX increased by 0.4% as gold and energy helped move Canadian stocks higher.
Volatility moved lower as well, with big market losses during the first half of the week that were nearly erased by the end of trading on Friday. But the big news was negative oil prices for the first time ever. The biggest problem with the oil market these days, as I’ve said before, is that it’s becoming harder for anyone to take physical delivery of the oil because global demand has decreased and there’s nowhere to store it. It’s gotten so bad that Horizon’s ETF Management Inc. has told investors NOT to purchase two of its oil funds
. Imagine having a product for sale and telling customers that you don’t want them to buy it! When the economy opens up again, demand will increase and this storage problem will go away, but until then, the industry will suffer.