Foodmakers feel the pricing pinch

By Dave Hannon -- Purchasing, 2/21/2007 7:43:00 AM

With the costs of corn and soy beans going higher, food makers are pushing price increases to recoup higher costs. Soup giant Campbell said it raised prices in the fourth quarter to offset higher materials costs.

Hormel Foods also said it raised prices in the fourth quarter to offset higher grain costs. Hormel CEO Jeffrey Ettinger said in a statement that higher grain prices would probably continue to pressure the turkey business, which represents less than a quarter of Hormel's operating profit. He added the company would try to find ways to offset the higher costs, including by raising prices.

JM Smucker CEO Richard Smucker said, “We expect the cost environment to remain difficult and we will continue to take actions to mitigate the cost increases.”

U.K.-based Cadbury in October scrapped its profitability goal citing increases in the cost of oil-based raw materials as the cause.