It's nearly time for reuters food and agriculture summit that's taking place in chicago, usa, dealing with the domestic and global market. In the article below you'll see common areas of concern as the uk food and farming industry. It's a reminder that we're in a global market adapting to a post-credit crunch market.
Reuters reported today, 17 march 2009, that:
'companies like Campbell Soup Co, Sara Lee Corp and Unilever Plc prepare discuss their strategies at next week's Reuters Food and Agriculture Summit in Chicago, food makers are fighting to hold onto those price increases as stressed consumers tighten household budgets.
"That is probably going to be one of their greatest challenges -- how can they maintain pricing they have taken at this juncture," said Wesley Moultrie, a Fitch Ratings analyst who follows food companies. Worries about pricing and brand loyalty are evident in the weakened share prices of name-brand food manufacturers as retailers push their own cheaper private label offerings.
'The Standard & Poor's 1500 Packaged Foods & Meats index is down 13.5 percent this year, though that is not as steep a drop as the 16.9 percent decline in the Standard & Poor's 500 over that period.
'Perhaps most worrying for the manufacturers, Wal-Mart Stores Inc, a Summit participant, is revamping its own private-label efforts. The world's No.1 retailer, which is also the largest grocery seller in the United States, is relaunching its Great Value brand this month.
'The move could not only put price pressure on manufacturers that sell through Wal-Mart but could reduce the amount of shelf-space available for their products. Commodity prices have fallen from the record highs of last year, but the food companies note that these costs remain high by historical standards.
'Many manufacturers are also still locked into last year's higher prices through hedges and won't benefit from falling prices until later this year. Grain and oilseed prices have fallen about 40 percent in the past year as the global recession has sapped demand, the dollar has soared, and as many investors and speculators who had piled into commodities deserted the market.
'World wheat and corn supplies are mounting as record high prices in 2008 encouraged farmers to plant more. At the same time, demand for grains has been reduced by a big drop in U.S. livestock numbers -- forecast by the USDA to be down about 2 percent in 2009.'
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