It seems the pressure from all sources (financial, political, consumer, global) points that this must happen. But the Fed wants to hold the line on inflation.
I mentioned in that post some grocery inflation due to Tyson Foods (TSN):
"But Tyson was able to diffuse cost pressures during the quarter by passing them along to consumers. It hiked chicken prices by 18.8% from a year ago, beef by 13.0%, and pork by 6.1%. That depressed the amount of meat the company sold but helped it boost margins."
Sanderson Farms (SAFM), another chicken producer had its earnings yesterday and some striking numbers - much of it due to this misguided attempt to force feed ethanol down people's throats (when studies show it uses more energy to produce, than it creates!) - via Forbes/Reuters:
- Increasing feed costs drove Sanderson's worse-than-expected performance. During the third-quarter prices for corn and soybean meal, Sanderson's primary feed ingredients for its chickens, increased 68.4 percent and 12.7 percent rom a year ago. Booming ethanol production has driven those prices higher by gobbling up corn supply and diverting other users to the corn fungible soybean.
- Sanderson's Chief Executive Joe F. Sanderson Jr. said the high price of grains will continue to pose a threat. "Looking ahead, we expect the market for both corn and soybean meal to remain high and volatile into fiscal 2008,” said Sanderson.
- During the quarter, prices for leg quarters were up 49.5 percent, while breast meat averaged 24 percent higher, and whole chicken prices were up about 17 percent.
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