This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

15 Food Stocks Hit by Commodity Inflation

(Food stocks hit by commodity inflation report updated with news that Hershey(HSY) raised wholesale prices to help offset rising input costs.)
NEW YORK ( TheStreet) -- Consumer food stocks from Hershey (HSY) and Kraft Foods (KFT) to McDonald's (MCD - Get Report) and Starbucks (SBUX - Get Report) say that rising commodity costs are eating into their bottom lines.

Food inflation -- from corn and cocoa to sugar and wheat -- is an increasingly important global issue and unlikely to go away anytime soon. The United Nation's Food and Agriculture Organization (FAO) said its index of global food prices was at record highs, spiking 25% internationally in 2010, higher even than where the index was in 2007-8 during the last food price inflation crisis.

In March the United Nations' food body reported that world food prices rose 2.2% month-over-month in February to a record peak.

The UN also warned that volatility in the oil markets could send global food prices even higher.

February's rise marked the eighth consecutive increase since June, and was the highest since the group began monitoring food prices more than 20 years ago.

The quick rise in food inflation started around seven months ago, Nicholas Colas, ConvergEx Group's chief market strategist, told TheStreet recently, building off long-term trends like the growing middle class in China and India where demand for beef and vegetable-based proteins grew disproportionately to demand for grain-based diets. Converting soft commodities like corn and wheat into protein -- think cows and poultry -- is inefficient, costly and time-consuming.

Rising food prices signal producers should produce more, Colas said, but "you can't just turn a switch." It takes time to plant the corn, it must be the right time of year, and it takes time for the crop to grow.

For food and beverage companies, that means many will have to pass higher costs onto already cash-strapped consumers -- and some, like Kellogg (K), Sara Lee (SLE) and Panera Bread (PNRA - Get Report), already have.

Here then is a rundown of major consumer food stocks , and how rising commodity costs are affecting their performance.
1 of 16

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
MCD $96.25 0.00%
PEP $93.53 0.00%
PNRA $180.56 0.00%
SJM $117.59 0.00%
SBUX $55.63 0.00%

Markets

Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs