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Popping profits

Cost markup is standard in retail. In some products, it seems extreme. The economics of a favorite snack.

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Frank Morrison grows the popcorn that Americans bring to life in their microwaves, pop on their stovetops, and stuff into their mouths at movie theaters and amusement parks across the country.

In 35 years of farming, he's witnessed popcorn retail prices expand like an inflating kernel.

Americans now commonly plunk down more than $2 for a box of microwaveable popcorn. Movie theaters often charge about $3.50 for a medium portion, compared with 15 cents in the mid 1950s - or 95 cents when adjusted for inflation.

The rising prices don't mean that the popcorn itself is any more expensive. Just ask Mr. Morrison. The value of his prepopped crop hasn't risen one cent since the 1960s.

"We're getting less for popcorn now than we did 35 years ago," says Morrison, who grows a variety of beans and corn - yes, popping corn is a specific variety - on his Clearwater, Neb., farm.

The gap between the value of Morrison's popcorn after harvest and the price most people pay for it is a testament to the bewildering balance sheet of popcorn economics.

This snack food became an American staple during the Great Depression, primarily because it was just a little more expensive than air.

Consumers' bank accounts are comparatively flush now. But people still buy popcorn in enormous quantities - and pay what many in the industry admit are extremely high prices. (This summer alone, Americans will spend an estimated $450 million on popcorn.)

A three-package box of microwaveable popcorn contains about 10 cents' worth of kernels. Additional costs include 10 cents for the box itself, 10 cents in labor costs, 15 cents for oil, and 15 to 20 cents for the microwave-ready bags. Shipping costs vary from a few cents to a quarter.

Overall, the kernels make up a very small percent of the final price tag, which averages $2.14.

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