Submitted by Darren Smith, Weekend Contributor
An auction for the largest known White Truffle, considered a high delicacy in culinary circles fetched about six percent of its estimated auction price of over one million dollars. This is based upon speculation with previous pre-auction inquiries from Asia and experience from previous auctions of record breaking examples.
The situation is perhaps a small echo from the Tulip Mania market speculative bubble that caused the crash of a segment of the tulip bulb industry in 1637 in the United Provinces (now The Netherlands).
The white truffle is one of the rarest and most coveted food ingredients in the world. They are gathered in forests of a few regions of Italy using dogs specially trained to locate them. Sabatino Truffles unearthed the largest White Truffle ever discovered, significantly larger than the previous record holder auction in 2010. The truffle weighed 4.6 pounds.
Previous auctions of record holders reached nearly extreme levels. In 2007 a 3.3 pound example achieved three hundred and thirty three thousand dollars; bid by casino owner Stanley Ho. In 2010 a similar auction netted over four hundred seventeen thousand dollars according to Sotheby’s. Speculators estimated based on reports of possible offers from Chinese individuals and the previous auctions the latest white tulip record holder could garner over one million dollars.
In the end, the truffle only netted just in excess of sixty one thousand dollars, which is closer to a sense of intrinsic value in that it could serve up to four hundred meals. Whether this is the path the truffle ultimately follows is not certain.
The economic plight of this fungus is, though on an individual sampling, reminiscent of the Tulip Mania bubble that hit the Dutch from 1636 to 1637.
In this case the price of the rarest tulip group, the Bizarden which was a red, purple, or brown base with white or yellow flame like streaks became largely the subject of this speculation. This particular tulip is difficult to cultivate and requires much attention to detail over the course of years. It could produce daughter varieties having similar characteristics through cloning, resulting in an intrinsic value as well as beauty which has an attractive value.
When prices for this variety began to increase at steep rates, the market for these tulips grew from the traditional markets based in cities and town trading houses to other members of society including the wealthy who bought the tulips on contract which is a form of futures investment.
Over the course of about six months a feedback-loop among speculative buyers gave rise to one of the first known large scale speculation bubbles. The price for an individual bulb began to take on almost extortionate prices; garnering upwards of levels equivalent to ten times the annual income of a skilled craftsman.
However this, like nearly all economic bubbles, came to a crash from February 1637 to May and the market for this variety collapsed. The effect sent some speculators having long positions in the tulip contracts into bankruptcy and depressed the entire market widely among individual and corporate type investors.
This latest auction of the White Truffle world record holders might have also collapsed, though it is difficult to ascertain this given the sample size. But, it could be a signal that wild speculation in achieving status related prizes through auction could have limits and cooler minds will prevail.
By Darren Smith
Sources:
The views expressed in this posting are the author’s alone and not those of the blog, the host, or other weekend bloggers. As an open forum, weekend bloggers post independently without pre-approval or review. Content and any displays or art are solely their decision and responsibility.
Fortunately for me, my taste buds have aged and truffles have no thrill for me. Foie gras is another story, and where do I live? California, where idiots have gotten foie gras banned from restaurants. I don’t know about markets, but the cost is so high, and cooking is an art. You could end up with a lump of fat. What banning does for the goose, since it will be “cooked” anyway, is beyond me. Rather than eat the whole animal, we toss it’s most marketable part. I ate dinner the last time in Paris only if they served foie gras. The French, of course, view this with glee. We know how to win wars, but know nothing about enjoying the life we fought for.
A friend of mine was in a restaurant and was offered a choice between a white truffle and a black truffle on his entry. The difference?
Forty bucks.
Paul – which art do you follow?
Karen – I follow the fine art market. Was out buying a new piece today. 🙂
It is possible to farm truffles, but it is a labor of love and patience. You need to plant a stand of specific trees, give them time to mature, seed their root system, and wait basically at least 10 years. Plus wage absolute war against any invading feral pigs or wild boar.
Unsustainable speculative bubbles do have a tendency to dramatically self correct themselves.
That is so interesting about the Tulip Bubble. I never knew that!
Fungus as food…Mmmmmm.
I do agree with rafflaw, however, that the prices for some are absurd.
In my fridge right now is the last of a delicious dish made with hand picked wild mushrooms of several types, plus sliced potatoes, shredded onions, slivers of beef, and olive oil…all simmered slowly. Only the potatoes, onions, bits of beef, and the olive oil cost even a penny.
Peru: With maca prices rising, country struggles to maintain control of their ancient plant.
http://online.wsj.com/articles/the-latest-superfood-perus-maca-root-1417567226
Italy: White truffles aplenty after heavy rains, give boost in bleak economy.
http://www.businessweek.com/news/2014-10-21/truffle-boom-brings-la-dolce-vita-amid-italy-s-economic-slump
Way too much money for a fungus!
Oh well, I will just stick with those cheap little Truffle Candies. . .and Irish Poems!
Nobody Knows The Truffles I’ve Seen???
An Irish Poem by Squeeky Fromm
There once was a tuberous fungus
Well loved by the gourmets among us!
The pigs like to eat ’em!
But people can’t, ahem,
Because the darn price is HUMONGOUS!
Squeeky Fromm
Girl Reporter
Markets move up and down all the time. I watch the art market and lately it has been rising again, but for awhile it had taken quite a dip. Since you cannot grow truffles on your own (apparently) there is no way to compare this to the Tulip Market.
Reblogged this on SpeakOutUSA! and commented:
A scuffle with a truffle?
Is it: Ruffles have ridges? or Truffles have ridges?
There is a difference between the tulip craze and the price of truffles and Blue Fin Tunas. A Blue Fin Tuna recently sold for a million dollars. It was large enough to be cut into pieces and sold for Sushi in Japan to actually make a return on the buyer’s investment. Truffles are sliced extremely thin and use to flavor and aromatize foods in expensive restaurants. Much like saffron truffles are used to provide an effect at the upper edge of the flavor receptors. For example a dish with paper thin slices of white truffles might cost hundreds of dollars. The tulip craze was an early example of a stock market bubble where there was no value, people knew this, but thought that they would get out after it went up some more and before it tanked.