Riding the commodity price roller coaster

For those in the industry whose job it is to track, predict and ideally, get ahead of the prices of commodities that are common ingredients in petfood (corn, rice, etc.), living through the last year must have seemed like riding a roller coaster.

Last July, the price of a bushel of corn was US$7.38, according to Jacobsen Publishing Co. By mid-December, it had fallen to US$3.79. Today's price on CNNMoney.com is US$4.63.

Many economic and agricultural experts predict continuing volatility as the global economy continues to roil (despite small signs of potential recovery somewhere down the road). Another factor is the rise and fall of energy prices, particularly those for oil and natural gas that fuel the transportation and production cogs of the industry supply chain.

Today's price for a barrel of light crude oil is nearly US$71, by the way--after being as low as US$42 a barrel at the beginning of the year and as high as US$143 a year ago July. Add to that the murky picture for corn and other food crops going into ethanol production, and it doesn't appear we'll be able to get off that roller coaster anytime soon.

In an effort to cope with the volatility, some feed companies are changing how they purchase grain. What about in petfood? How is your company dealing with the volatility of raw material prices?