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Less Is More

THERE'S A NATIONAL SHORTAGE OUT THERE. CAN YOU FILL IT?
by GEOFF WILLIAMS - May 2009

Published in Business :: Business

ILLUSTRATION BY KALI CIESIMIER

You may have not noticed it, but the squirrels sure did. In areas of the eastern United States last year, there was an acorn shortage. Scientists theorized it may have been due to a big crop of acorns the year before, or perhaps it was the much wetter-than-normal spring. Whatever the case, if squirrels carried wallets, an entrepreneur could be doing big business.

Fortunately, or unfortunately - depending o n how you look at it - there are plenty of other national shortages that affect humans, which provide opportunities for those with an entrepreneurial spirit. Here's a glance at what the country is currently demanding - and what your prospects could be if you want to supply it.

The shortage: HONEYBEES
THE SITUATION: For years, the health of these insects has been declining. The overall cause is something of a mystery, but one contributing factor is the varroa mite, a parasite that not only lays eggs in the brood cells of honeybee colonies, but also sucks on the blood of adult and developing bees.
WHAT YOU COULD BE DOING: Raise honeybee colonies. Go the traditional route and sell honey, or take advantage of farmers who need bees to pollinate their crops. And if you can find a way to eliminate the varroa mite, your great-great-grandchildren could be set for life.
YOUR PROSPECTS: Good. Expect to spend around $100 to $200 in startup costs (you can find a beginning beekeeper's kit online). If you scale up, you can potentially make thousands or millions - it is, after all, a multibillion dollar industry.

The shortage: CHICKEN WINGS
THE SITUATION: This shortage came right in time for this year's Super Bowl. It was partly due to the late 2008 bankruptcy of one of the nation's largest poultry companies, Pilgrim's Pride Corporation.
WHAT YOU COULD BE DOING: Raise chickens, or get into the industry peripherally by, say, creating a menu for food producers to feed their chickens. (They've been hurt by climbing corn prices.)
YOUR PROSPECTS: Delicious, considering more than 11 billion wings are sold every year. Startup costs can start at $300 to $500 for a coop and $30 a month for feed for about a dozen chickens. During winter, you may spend $30 a month in electrical costs for a heat lamp in the coop.

The shortage: HELIUM
THE SITUATION: There have been signs that this shortage is subsiding (although the price of helium is still high). It has to do with everything from geopolitics to closing plants to construction delays on new manufacturing facilities. And in August 2008, a whistle-blower alerted authorities that the Bureau of Land Management's helium program was vulnerable to fraud, abuse and large losses due to workers who were too cozy with helium refiners on the pipeline.
WHAT YOU COULD BE DOING: Find a way (an ethical one) to develop inexpensive helium, which will be a challenge. The Earth's atmosphere contains helium, a lighter-than-air substance, in small amounts, so it's not just hanging around for scientists to pluck. This is why the industry has always collected it as a by-product when extracting natural gas from the ground.
YOUR PROSPECTS: Most new supplies of helium are produced in Middle Eastern countries, which have kept the prices high. So, if you're in North America and you start producing helium - especially inexpensive helium - you could find plenty of customers. Expected startup costs are steep. For starters, you'll need between $25 to $50 million for a natural gas production company. But that's just a fraction of what you could make. In 2006, for instance, the helium extracted from natural gas in the US was worth $400 million and was split among nine companies.

The shortage: MEALWORMS
THE SITUATION: As if they didn't have enough trouble at the bottom of the food chain, there's been a shortage of mealworms since spring 2008, and nobody knows why. Global warming notwithstanding, some experts say it's due to colder temperatures last year during the mealworm reproductive cycle at a time when there was a greater demand for them from pet stores, chicken farmers, fisherman and the like. Another theory - posited by a mealworm farmer in Alaska - is that it's being caused by a pesticide in the bran that mealworms like to eat.
WHAT YOU COULD BE DOING: Start a mealworm farm and distribution center.
YOUR PROSPECTS: Pretty good. Startup costs for a basic farm is minimal: You need a plastic tub, already-existing mealworms that will lay eggs, bran, oats, a potato (which you'll replace every few days) and water. There are many websites that can show you how to get started. But just because startup costs are less than $100 doesn't mean it can't be big business. Since many live insect companies have been stopping or limiting their mealworm shipments during the shortage, the door is wide open for an upstart producer to take their place.

A SHORT HISTORY

Throughout history there has been no dearth of national shortages. Not surprisingly, there are frequently those that have to do with crops (we always seem to be in short supply of wheat) or other natural resources (like aluminum in 1941, before America's involvement in World War II). But it becomes a little more surprising when it's something more obscure, like the 3-cent stamp shortage the US Postal Service dealt with in 1995 or the country's ammunition shortage in 2007.

On December 19, 1973, The Tonight Show host Johnny Carson made a crack about a national toilet paper shortage - and what should have gone in a joke book became fodder for the history books. Frantic Americans tumbled out of their beds the next morning and raced to the grocery stores - only to cause an actual toilet paper shortage.

As it turned out, Carson had taken information from a news wire report that was inaccurate but based on fact - an expert had warned of a potential shortage. The host apologized, saying, "I don't want to be remembered as the man who created a false toilet paper scare." And the crisis ended.

What will be next?

Published in Business :: Business

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