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Marketplace with host Kai Ryssdal produced and distributed by American Public Media focuses on the latest business news both nationally and internationally, the global economy, and wider events linked to the financial markets.
The only national daily business news program originating from the West Coast, Marketplace is noted for its timely, relevant and accessible coverage of business, economics and personal finance.
Tuesday, April 15, 2014 5:54pm
“I’m somewhat of a night owl,” says Christine Brown, executive director of K-12 and college prep products at Kaplan Test Prep. “I’ll probably be online this evening keeping an eye on things.”
From the big players like Kaplan to small mom-and-pops, test prep companies will be scrambling to overhaul their offerings in time for the new test’s debut in the spring of 2016—and hoping to capitalize on an expected surge in demand.
“When the new SAT comes up, business just goes through the roof,” says David Benjamin Gruenbaum of Ahead of the Class, a California-based tutoring company.
He expects another bump in business this time around, even though the College Board is teaming up with the nonprofit Khan Academy to offer free help.
As Marketplace has reported before, the college application process is a huge -- read: expensive -- endeavor. Standardized tests cost from registration to score reports:
Just taking the SAT costs upward of $51.00. Tack on individual subject tests required by some colleges, and you're adding another $24.50 in initial registration fees, plus $13-24 for every individual subject.
The ACT costs $36.50. The ACT Plus Writing Test, required by some colleges, costs $52.50.
SAT and ACT tutoring costs an average of $125 per session. Private tutoring for the tests will range in costs by tutor. Princeton Review's 24-hour private tutoring program will set a family back $3000. One independent tutor we spoke with charges almost $550 an hour for his services.
Tuesday, April 15, 2014 5:51pm
The Consumer Price Index (both the overall rate, and the ‘core’ rate excluding food and energy) rose 0.2 percent in March 2014, according to the Bureau of Labor Statistics. CPI is up 1.5 percent for the past 12 months. Big drivers of price rises in March were food (up 0.4 percent m/m and 1.7 percent y/y) and shelter costs, especially rent (up 0.3 percent m/m, 2.9 percent y/y). Economists were predicting a smaller rise in inflation at the consumer level.
Food prices, both at home and in restaurants, are facing multiple inflationary pressures, including a spate of bad weather—severe drought in California, deep freezes in the South—as well as higher-priced food imports. Leading the surge were meat and eggs (up 1.2 percent in March), dairy (up 1 percent) and fruits and vegetables (up 0.9 percent).
Shelter costs have been rising steadily for renters and owners. The latter face higher home prices and mortgage rates; the former face a shortage of rental units, which drives up rents. Homebuilding (especially of multifamily apartment buildings and condos) has started to pick up after coming to a virtual halt through the Recession. But it will take many years for inventory to catch up with demand, says Ethan Handelman, VP for Policy and Advocacy at the National Housing Conference.
“The pain [of rising rents] really goes pretty broadly," says Handelman. Handelman says low-income people usually can’t afford a rent hike—they’ve got no cushion and may be thrown into homelessness. He says middle-class people aren’t seeing their paychecks rise much. “Many of them are paying more than a third—and some are paying more than half—of their income for housing."
Among major product categories, only gasoline and airfare prices have fallen in the past twelve months (Gasoline is down 4.7 percent, and airfares have fallen 4.1 percent).
The uptick in inflation so far is not alarming most economists. Inflation rates are still well below the Federal Reserve’s target of 2 percent.
But economist Sarah Watt House at Wells Fargo Securities says average Americans might have a different experience of inflation going forward.
“Even if you have a moderate rate of inflation,” says Watt House, “if you’re still not getting commensurate pickup in wage growth, and that starts to eat away at real income gains, I think it could be a little bit concerning to folks.”
By Shea Huffman/Marketplace
Tuesday, April 15, 2014 5:03pm
Even if you’ve never been to south Georgia, you’ve probably tasted the region’s most famous vegetable. It’s almost time for this year’s Vidalia onions to start showing up in the produce aisle.
Some Georgia farmers are beginning to harvest the $120 million crop this week. But that's not going over well with some other growers -- or Georgia's agriculture commissioner, who wants farmers to wait to pack and ship onions until next Monday, April 21.
The dispute centers around what's best for the Vidalia brand. To be labelled a Vidalia, onions must be certain approved varieties, and must be grown in a 20-county region in southeast Georgia. They're know for their sweetness, a product of the soil and water conditions in the region.
"Matter of fact, they only make you cry when they’re gone," says Delbert Bland, by all accounts the biggest grower of sweet onions in the nation.
Standing in a field of onions, with narrow green shoots sticking out of the ground, Bland says Vidalias grow rapidly during the final two or three weeks before harvest.
Close-up of the onion shoots. (Sarah McCammon/Marketplace)
"If you come out here tomorrow, you’ll see cracks all over this dirt," Bland says. "That’s just how fast they grow at the very end."
His company, Bland Farms, raises close to 3,000 acres of onions. He says a lot of them are ready to harvest and sell.
But the leader of Georgia’s agriculture department, Commissioner Gary Black, says farmers have been rushing onions to market to take advantage of higher prices early in the season. He says some grocers are complaining to him about quality.
"Quality," Black says, "meaning taste, shelf life, appearance."
As guardian of the Vidalia trademark, Black says he wants to make sure onions aren’t in stores before they’re ready. So he set April 21 as the official packing date. That means farmers who harvest and pack early could be fined as much as $1,000 per illicit onion bag.
"In most growers’ minds, that’s been the earliest date that a real, true reliable Vidalia onion could be put into the marketplace," Black says.
But harvesting too late carries its own risks, says George Boyhan, a vegetable specialist with the University of Georgia Extension.
"In my professional opinion, that’s insane," he says.
Boyhan started working with Vidalia farmers in the late 1990s. He says harvesting too late can expose the crop to diseases.
"Onions we’d harvest in the second or third week in May, we always had problems with those bacterial diseases," Boyhan says.
But many farmers support a later start to the season. Bo Herndon is chairman of a growers’ advisory panel that helped choose the April 21 pack date. Herndon says he won’t harvest until early May - even though some of his competitors are starting earlier.
"I think it’s all about the dollar," Herndon says. "And if they pick right now they’re not gonna be ready. They’re gonna be green and whoever gets them isn’t gonna be happy with them."
Bland, meanwhile, has pushed back, taking the agricultural commissioner to court. He says it's not good business to wait to harvest - even if other farmers would like him to.
A road sign for Bland's farm. (Sarah McCammon/Marketplace)
"They don't want someone to go to market before they do," Bland says. "We're all onion growers, and yet we all compete with each other or market share."
This year, that competition isn’t just playing out in the grocery aisle, but also in Georgia courtrooms.
Tuesday, April 15, 2014 5:00pm
Everyone who knows anything about Yahoo knows the company is doing well mainly because it owns a big chunk of another company, Alibaba. The Chinese internet giant is expected to go public by the end of the year. The word is, it'll be valued anywhere between $100 billion and $150 billion dollars. And Yahoo owns 24 percent of Alibaba.
Yahoo! released earnings Tuesday. Sameet Sinha, an analyst at B. Riley, says Alibaba is the reason Yahoo’s stock has doubled since CEO Marrissa Mayer took over two years ago.
"Investors obviously clamour for the stock of hot private companies before they go public. So right now, Yahoo is a way for them to own Alibaba stock," Sinha said.
Brett Harris, an analyst at Gabelli and company, says: "So let’s just start with what we know, we know they have $4 billion dollars in cash, so we can take that out of the $34 billion we’re starting with," Harris said.
The $34 billion is what Yahoo is worth. After the cash, subtract another $9 billion for Yahoo’s stake in Yahoo Japan. That brings us to $21 billion, which is the value of Yahoo’s share in Alibaba. That's assuming its values at $150 billion dollars when it goes public.Shea Huffman/Marketplace
"So, we’re getting the U.S. business for free. Essentially, the stock is giving no valuation to the U.S. business," he said.
Harris says while Yahoo’s core business is in decline, the company still generates about $1.5 billion in cash a year.
Colin Gillis is an analyst at BGC and he says, when Alibaba goes public, Yahoo will have to sell 10 percent of its share.
"So this is the question you have this tremendous chunk of cash. This is your chance to fix the business if you can use it effectively and wisely," Gillis said.
He said the pressure for Marissa Mayer to fix Yahoo will be greater than ever. The company has barely moved the needle on revenues. Gillis said once Alibaba goes public, pressure on Meyer to manage a turnaround will be even greater than ever.
Tuesday, April 15, 2014 4:36pm
There's been a bit of rain, but the West Coast is still recovering from a drought of historic proportions. It's been so bad, in fact, that the state of California came out with a list not too long ago of cities that are just flat out going to run out of water. The town of Cloverdale just north of San Francisco in Sonoma County got that diagnosis back in January. State officials said it had just 100 days left, but the Bear Republic Brewing Company, which calls Cloverdale home, stepped up with a plan. It would loan the city $466,133,000 to dig two new wells.
Bear Republic owner Ricardo Norgrove says the future of the city's water supply is not just good for his business, it's critical to the town he calls home: "I'm fifth generation Sonoma County. I want to be here. So for this to last and to be a generational brewery, meaning I can pass it onto my kids and my kids' kids, we need to be setting the foundation for today. That's what we're trying to do."
Norgrove isn't just helping find more water, he's cutting back in his business. He says Bear Republic accounts for 1.5 percent of the city's water use, but that's much less than other microbreweries, which soak up between 6 and 8 million gallons a year.
"The industry average today is somewhere between 6.5 and 7 gallons of water utilized to make one gallon of beer. We're running about 3.5 gallons of beer to one gallon of beer produced, so we're really conserving water in all types of operations in the brewery. It's just a culture now within the brewery."
Norgrove says his company has considered moving somewhere without the water woes, but he believes the problem will eventually be one his business would have to grapple with anywhere.
"This is not just a local problem, this is a global problem. We do see other folks moving to communities and other states that have less regulations, but eventually it's going to catch up to everybody."
If the drought has you thirsty, Ricardo Norgrove recommended his ten favorite beers to wet your whistle:
1) Beer Republic Brewing Co.'s Racer 5 IPA (of course)
2) Anchor Brewing Liberty Ale
3) Sierra Nevada Celebration Ale
4) Hoegaarden Wit
5) Firestone Walker Wookey Jack
6) Pabst Blue Ribbon (The ol' classic)
7) Old Style
8) Negra Modelo
9) Ballast Point Sculpin IPA
10) Anderson Valley Brewing Company High Rollers Wheat
September 16, 2013