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Comment by noduerme | Hacker News Reader

It's been a bad time for Lamb Weston. The stock is down over 41% since a year ago. I know this because it's been part of the most unsuccessful algorithmic trading strategy I've ever run. That company has a CEO who's been using the private jet to party all over the place; had to throw out [edit: $120M] of raw potatoes they overbought; and sent $80M of flawed french fries to a major customer (probably McDonald's) which they had to eat back in the last year. I think something fairly major is going to happen soon to change that company's leadership.

Cartels may work for luxury items like diamonds and cocaine, but they're inefficient. A lot more people notice flaws in their fries than in their diamonds and blow.

https://www.businesswire.com/news/home/20241216832356/en/JAN...

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> throw out $120M of raw potatoes they overbought

This is putting all those efforts to reduce domestic food waste into perspective.

> $80M of flawed french fries .. which they had to eat

I think it would take me a long time to eat $80m of french fries.

> Cartels may work for luxury items like diamonds and cocaine, but they're inefficient

And now a serious point: people have been complaining about food price inflation, and blaming the usual suspects of fiat money and Democrats, but .. what if it was actually the people making the food putting up the prices? Doesn't it often turn out that the secret ingredient is in fact some kind of crime?

> And now a serious point: people have been complaining about food price inflation, and blaming the usual suspects of fiat money and Democrats, but .. what if it was actually the people making the food putting up the prices? Doesn't it often turn out that the secret ingredient is in fact some kind of crime?

What if it was increasing labor prices due to decreases in labor force participation rate and more preferable options for people to earn money?

https://www.voronoiapp.com/wealth/The-Growth-in-Real-Wages-b...

That would be a Good Thing, but people attribute wage growth to their own personal efforts and price growth to evil external forces. So if you have the tiniest bit of a wage/price spiral where labour shortages raise wages and therefore prices (especially in labour-dependent industries like prepared food!), everyone goes bananas.

> I think it would take me a long time to eat $80m of french fries.

About 7000 person-years, I recon.

(Assuming €2.90 for a 231 kcal portion, which is roughly what McD seems to charge, but the search results give me a lot of different numbers and their own website didn't give me any specific price (do I need to place an order or sign in to get that?)).

I could do it in my lifetime I think

You couldn't eat that much in a normal human lifetime, not even if you had cystic fibrosis and therefore both needed and were capable of consuming 10,000 kcal/day every day just to survive.

Maybe the CEO has been overpaying for his executive washroom nose powder.

There's a parallel here with a lot of other industries... back 10+ years ago, companies like Lamb Weston had a lot of actual farmers in the management ranks, IE: people who grew up working in the fields. The shift started sometime after 2000 to MBA types who (thought they) knew numbers, but had never been close to the product. My uncle was one of those farmer types who had helped these companies find serious success (he was part of the development of the curly fry, sweet potato fry, etc) and saw the writing on the wall when he retired and saw the type of new era corporate managers that were coming in.

Cartels don’t mean low quality though, that’s a completely separate and largely orthogonal issue. You don’t even remotely need a cartel for leadership to focus on value extraction and tank the products.

This is a key point: historically, Burger King, McDonalds, Wendy's, etc often sourced their fries out of the same factory, but to different standards. Think starches, batters, fry dimensions, even type of potato in some cases. These companies competed not only on price but also in product consistency.

Actually it does mean lower quality --> Lack of competition means that the product quality typically suffers as a result of rent seeking behavior.

Cartels are a simple type of monopoly.

It’s a lot easier to be shitty when customers don’t have other options.

How much did you lose in which timeframe, if you don't mind me asking?

Cocaine is a very strange business, because the competing suppliers can't appeal to the police or the courts.

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