Falling Commodity Costs Won’t Lower Food Prices

CHICAGO—Food prices will remain high despite the falling cost of commodities, Reuters reported. According the news source, "while the headlines talk about how corn and wheat and soy have all been dropping, sugar is up 40-50 pct, and so is rice," Kellogg's CEO David Mackay said. Kellogg's forecast a 5 percent increase in its commodity costs for 2009, in part because hedges it has used to lock in lower commodity costs will end.

Kraft CEO Irene Rosenfeld told Reuters, "We will continue to be sensitive to the marketplace," she said. "Our pricing decisions will reflect a balance of our cost profile, our revenue growth, our share performance and our profit growth."


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