Fetal Bovine Serum - the Tipping Point

Users of US Fetal Bovine Serum have been watching for months and months how prices climb up along with a constantly growing shortage and with no end in sight. Yet prices have rarely a  simple linear development so the question is when all this is going to change.

Over the past 10 years US Fetal Bovine Blood prices went from $ 100 down to $ 2.50 and back to $ 150 per liter. Prices of Fetal Bovine Serum reflected this change accordingly. Collection labor, transportation and other production related costs didn't change much in this time. Mostly it was the starting material (blood) demand and supply that ruled over the price fluctuation.

The graph below represents the price development of US fetal blood between end of 2006 and end of 2014 as reported by the USDA. 

The bigger part of the graph looks like an inverted bell curve reflecting consistent reports on an almost regular monthly basis between 2006 and 2011. With the beginning of the steep price increase report data was available first quarterly, then semi-annually and with no numbers for 2015 published yet. While collectors and manufacturers of Fetal Bovine Serum have become very cautious when disclosing information about costs, end users are getting frustrated due to the current product shortage and price instability.

Of course there are many factors influencing the prices - supply and demand, natural conditions, also particular business decisions of the market players. These factors change at different times and only in their combination they can be considered the real determinant of a specific market situation. However the logic of development remains the same. Once prices hit the bottom of the inverted bell curve they start to go up. Moving into the opposite direction: the higher the prices climb the closer they get to the tipping point.

So the question is: Are we there yet? Maybe not now but probably very soon with first indicators already existing:

The drought is gone and the herd rebuilding has been so far very successful.
Consumers are getting tired of the constant price instability and are no longer willing to pay more.
Consumers are considering the use of Fetal Bovine Serum alternatives. More good alternative products are available on the market meanwhile.
A similarly structured overseas market with typical FBS shortage and high prices is showing signs of relief.

These are all reasons to be optimistic, to stay conservative when planning long term spending and avoid a surplus of inventory. Of course a "Plan B" including use of alternative products should not be neglected completely. The market is constantly moving and a complete dependency on a sometimes unstable raw material supply is not a good solution.

In the meantime we hope that a positive change will come by the end of this year and that FBS users will be given a greater choice again.

Stay tuned!

15.04.2015 14:31