Thursday, March 19, 2020

The History and Invention of Peanut Butter

The History and Invention of Peanut Butter It’s one of the country’s favorite things to spread over bread. We dip celery sticks in it. It’s often baked into cookies and countless deserts. I’m talking about peanut butter and as a whole Americans consume tons of the pulverized pea about a billion pounds worth each year. That’s roughly $800 spent annually and  a booming increase from the roughly two million  pounds produced at the turn of the 20th century. Peanuts were first cultivated as food in South America and natives in the region began turning them into grounded up paste roughly 3,000 years ago. The kind of peanut butter that the Incas and Aztecs made was of course much different from the manufactured stuff sold in grocery stores today. The more modern story of peanut butter actually began towards the end of the 19th century, not too long after farmers began mass commercializing the crop that was suddenly in demand after the civil war. A Nutty Controversy So who invented peanut butter? Its hard to say. In fact, there appears to be some disagreement among food historians over who deserves the honor. One historian, Eleanor Rosakranse, says a woman from New York named Rose Davis started making peanut butter as early as the 1840’s after her son reported seeing women in Cuba grinding peanuts into a pulp and smearing it onto bread.      Ã‚   Then there are some who think the credit should go to Marcellus Gilmore Edson, a Canadian chemist who in 1884 filed and was granted the first patent in the United States for what he called â€Å"peanut-candy.† Conceived as a kind of flavoring paste, the process described running roasted peanuts through a heated mill to produce a fluid or semi-fluid byproduct that cools into a consistency like that of butter, lard, or ointment. However, there wasn’t any indication that Edson made or sold peanut butter as a commercial product. A case can also be made for a St. Louis businessman named George A. Bayle, who began packaging and selling peanut butter through his food manufacturing company. It’s believed that the idea was born out of a collaboration with a doctor who had been seeking a way for his patients who were unable to chew meat to ingest protein. Bayle also ran advertisements in the early 1920’s proclaiming his company to be the â€Å"Original Manufacturers of Peanut Butter.† Cans of Bayle’s Peanut Butter came with labels touting this claim as well. Dr. John Harvey Kellogg It isn’t difficult to find those who dispute this claim as many have argued that the honor should go to none other than the influential Seventh-day Adventist Dr. John Harvey Kellogg. Indeed, the National Peanut Board states that Kellogg received a patent in 1896 for a technique he developed for making peanut butter. There’s also an 1897 advertisement for Kellogg’s Sanitas company Nut Butters that pre-dates all other competitors. More importantly, though, Kellogg was a tireless promoter of peanut butter. He travelled extensively throughout the country giving lectures on its benefits of to health. Kellogg even served peanut butter to his patients at the Battle Creek Sanitarium, a health resort with treatment programs supported by the Seventh-day Adventist church. The one big knock on Kellogg’s claim as the father of modern day peanut butter is that his disastrous decision to switch from roasted nuts to steamed nuts resulted in a product that barely resembled the ubiquitous jarred goodness found on store shelves today. Kellogg also  in an indirect way played a part in the production of peanut butter reaching a mass scale. John Lambert, an employee of Kellogg’s who was involved in the nut butter business, eventually left in 1896 and founded a company to develop and manufacture industrial strength peanut-grinding machines. He would soon have competition as another machine manufacturer, Ambrose Straub, was granted a patent for one of the earliest peanut butter machines in 1903. The machines made the process easier as making peanut butter had been quite tedious. Peanuts were first grounded using a mortar and pestle before being put through a meat grinder. Even then, it was hard to achieve the desired consistency.    Peanut Butter Goes Global In 1904, peanut butter was introduced to the wider public at the World’s Fair in St. Louis. According to the book â€Å"Creamy and Crunchy: An Informal History of Peanut Butter, the All-American Food,† a concessionaire named C.H. Sumner was the only vendor to sell peanut butter. Using one of Ambrose Straub’s peanut butter machines, Sumner sold $705.11 worth of peanut butter. That same year, the Beech-Nut Packing Company became the first nationwide brand to market peanut butter and continued to distribute the product until 1956. Other notable early brands to follow suit were the Heinz company, which entered the market in 1909 and the Krema Nut Company, an Ohio-based operation that survives to this day as the world’s oldest peanut butter company. Soon more and more companies would start selling peanut butter as a disastrous mass invasion of boll weevils ravaged the south, destroying much of cotton crop yields that had long been a staple of the region’s farmers. Thus the food industry’s growing interest in peanut was fueled in part by many farmers turning to peanuts as a replacement. Even as demand for peanut butter grew, it was primarily being sold as a regional product. In fact, Krema founder Benton Black once proudly boasted â€Å"I refuse to sell outside Ohio.† While it may sound today like a bad way of doing business, it made sense at the time as grounded peanut butter was unstable and best distributed locally. The problem was that, as the oil separated from the peanut butter solids, it would rise to the top and quickly spoil with exposure to light and oxygen.                All that changed in the 1920’s when a businessman named Joseph Rosefield patented a process called â€Å"Peanut butter and process of manufacturing the same,† which describes how hydrogenation of peanut oil can be used to keep the peanut butter from coming apart. Rosefield began licensing the patent to food  companies  before he decided to go off on his own and launch his own brand. Rosefields Skippy peanut butter, along with Peter Pan and Jif, would go on to become the most successful and recognizable names in the business.

Monday, March 2, 2020

The Trade Deficit and Exchange Rates

The Trade Deficit and Exchange Rates Since the U.S. Dollar is weak, shouldnt that imply we export more than we import (i.e., foreigners get a good exchange rate making US goods relatively cheap)? So why does the U.S. have an enormous trade deficit? Trade Balance, Surplus, and Deficit Parkin and Bades Economics Second Edition defines trade balance as: The value of all the goods and services we sell to other countries (exports) minus the value of all the goods and services we buy from foreigners (imports) is called our trade balance If the value of the trade balance is positive, we have a trade surplus and we export more than we import (in dollar terms). A trade deficit is just the opposite; it occurs when the trade balance is negative and the value of what we import is more than the value of what we export. The United States has had a trade deficit for over the last ten years, though the size of the deficit has varied during that period. We know from A Beginners Guide to Exchange Rates and the Foreign Exchange Market that changes in exchange rates can greatly impact various parts of the economy. This was later confirmed in A Beginners Guide to Purchasing Power Parity Theory where we saw that a fall in the exchange rates will cause foreigners to buy more of our goods and us to buy less foreign goods. So theory tells us that when the value of the U.S. Dollar falls relative to other currencies, the U.S. should enjoy a trade surplus, or at least a smaller trade deficit. If we look at the U.S. Balance of trade data, this doesnt seem to be happening. The U.S. Census Bureau keeps extensive data on U.S. trade. The trade deficit does not appear to be getting smaller, as shown by their data. Here is the size of the trade deficit for the twelve months from November 2002 to October 2003. Nov. 2002 (38,629)Dec. 2002 (42,332)Jan. 2003 (40,035)Feb. 2003 (38,617)Mar. 2003 (42,979)Apr. 2003 (41,998)May. 2003 (41,800)Jun. 2003 (40,386)Jul. 2003 (40,467)Aug. 2003 (39,605)Sep. 2003 (41,341)Oct. 2003 (41,773) Is there any way we can reconcile the fact that the trade deficit is not decreasing with the fact that the U.S. Dollar has been greatly devalued? A good first step would be to identify who the U.S. is trading with. U.S. Census Bureau data gives the following trade figures (imports exports) for the year 2002: Canada ($371 B)Mexico ($232 B)Japan ($173 B)China ($147 B)Germany ($89 B)U.K. ($74 B)South Korea ($58 B)Taiwan ($36 B)France ($34 B)Malaysia ($26 B) The United States has a few key trading partners such as Canada, Mexico, and Japan. If we look at the exchange rates between the United States and these countries, perhaps we will have a better idea of why the United States continues to have a large trade deficit despite a rapidly declining dollar. We examine American trade with four major trading partners and see if those trading relationships can explain the trade deficit: