As families prepare for their annual Thanksgiving dinner this week, they may want to look to food processing companies for answers as to why their grocery bills will be higher than last year.
"When corn was nearly $8 per bushel this summer, food manufacturers began an expensive and dishonest PR campaign to convince Americans that food prices were high due to the demand for corn-based ethanol. Now that corn prices are below $4 per bushel, and we're grinding even more corn for ethanol than earlier this year, these same food companies are proving that good prices are high because they want them to be high," said Brian Jennings of the American Coalition for Ethanol.
Companies such as General Mills, Del Monte, and ConAgra have all reported a double-digit increase in sales during the last quarter, partly due to price increases.
An Associated Press article (http://www.google.com/hostednews/ap/article/ALeqM5i7bcgQyokxAYSLttY7nF6jtG8_CAD94JDBN00) had an interesting statement by Chief Executive William R. Johnson: he said "commodity costs are coming down and Heinz will leave pricing in place, which will help boost margins. Heinz will invest in marketing and innovation to push its message of value to consumers, he said. The company is also looking at changing sizes of packages and providing new offerings to keep consumers wanting its products."
Posted by KB 11/24/08