<when have insiders ever been given such an opportunity to unload crap on the masses???? when? >
Yes, I stand corrected, "the project" did work for it's intended purpose. And while they're at it, US consumers can bear this load too.
Reuters
Higher ingredient costs drive U.S. food prices up
Tuesday April 20, 5:53 pm ET
By Nichola Groom
NEW YORK, April 20 (Reuters) - U.S. foodmakers are raising prices on everything from cheese to luncheon meat in a bid to make consumers pick up their share of the tab for rising prices on many basic ingredients.
Some of the nation's biggest food companies, including Kraft Foods Inc. (NYSE:KFT - News), Hormel Foods Corp. (NYSE:HRL - News), and Bob Evans Farms Inc. (NasdaqNM:BOBE - News), said this week that they are taking measures to pass on the soaring costs of commodities such as meat, soybean oil, wheat, and milk.
And analysts said it is just a matter of time before others in the food industry are forced to raise prices too.
"The price increase will likely stick and be accepted by retailers given the fact that higher commodity prices are an industry-wide issue," Merrill Lynch analyst Leonard Teitelbaum said in a note, adding that "Hormel's price increase is likely to be the first of many for the industry."
Leading U.S. foodmakers are expected to raise prices, by 2 percent, on average, in the second half of this year, according to Teitelbaum.
This is likely to contribute to inflationary pressures. A 0.5 percent rise in March U.S. consumer prices, reported last week, led to concerns that inflation could become a threat again and triggered a rise in interest rates.
"The big issue here is now much are they going to be able to pass on?" said Anthony Chan, Chief Economist with Banc One Investment Advisors. "They are going to be able to pass on a little bit more in an environment where the economy is improving, but at the same time they are not going to be able to pass on all of it."
Food companies typically have difficulty raising prices because discounters like Wal-Mart Stores Inc. (NYSE:WMT - News), the world's largest retailer, hold so much sway over the U.S. grocery market.
But Lehman Brothers analyst Andrew Lazar said in a report on Tuesday that he expects prices on store-branded products will also move up, which should help the price increases stick.
Austin, Minnesota-based Hormel said on Tuesday it will raise prices on its Dinty Moore beef stew, Spam luncheon meat and other canned goods, in part because of higher beef, pork, and poultry prices. The increase will begin June 14 and will drive prices up between 4.5 percent and 6.5 percent.
The popularity of high-protein diets such as the Atkins Diet, and an improving economy, have increased demand for all types of meats, sending wholesale beef prices up 20 percent from a year ago. Pork prices, meanwhile, are up 30 percent, and turkey prices are up 30 percent or more.
Soaring demand for food in China, as an economic boom raises incomes there, has also fed voracious demand for everything from grains to meat.
Pork sausage producer Bob Evans Farms said it has raised the price points on its in-store promotions in order to offset some of those costs.
"A year and a half or so ago we were targeting $1.99 for 1-lb. rolls of sausage, whereas now the best consumer deal out there is two-for-$5," said Roger Williams, executive vice-president of Bob Evans Farms, in an interview.
The low-carb, high-protein diet craze has also driven increased demand for cheese. Add that to higher milk prices, partly because of a shortage of milk-producing herds, and cheese prices have surged.
Kraft, the maker of Philadelphia cream cheese, Cracker Barrel cheddar cheese and Kraft singles, on Monday said it raised prices on cheese between 5 and 15 percent, depending on the product, at the end of the first quarter.
The company also raised its prices on frozen pizza last week and Kraft Chief Financial Officer Jim Dollive said it would continue to try to push through other price increases.
"To the degree that these commodities move, we will make every attempt to pass those increases on through higher prices," Dollive said during Kraft's quarterly earnings conference call with analysts on Monday.
A spokesman for ConAgra Foods Inc. (NYSE:CAG - News), the maker of Healthy Choice meals and Hunt's ketchup, said the company is "going to be passing along pricing actions when and where appropriate," but added that the company has not yet made plans to raise prices on specific products.
Many top foodmakers, including Tyson Foods Inc. (NYSE:TSN - News), General Mills Inc. (NYSE:GIS - News) and Kellogg Co. (NYSE:K - News), declined to comment on Tuesday on future pricing moves.
Others, like Dreyer's Grand Ice Cream Inc. (NasdaqNM:DRYR - News), said they are in a "wait and see" mode for now.
"We are sensitive to it, but we don't have any broad-based plans to raise prices right now," said Dreyer's spokeswoman Diane McIntyre. (Additional reporting by Bob Burgdorfer in Chicago) |
