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Commodities & Metals

McDonald’s (MCD), Sara Lee (SLE) And Wheat

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By Douglas A. McIntyre Published
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The price of wheat has gone up three-fold in ten months. For something that looks like a weed, that is an impressive run.

Since a large number of business from McDonald’s (NYSE: MCD) to Sara Lee (NYSE: SLE) to Kraft (NYSE: KFT) have a lot of wheat-based products, inflation in the grain is hardly good news.

In many enterprises, the cost of commodities can be passed on to consumers. In a recession, that becomes somewhat more difficult. Who is willing to buy a $15 Big Mac or $20 box of cake mix? All the money that might go toward those items is already being spent on $4 a gallon gas.

Since the price of wheat is not going to drop, at least not any time soon, it is worth reconsidering investments in fast food chains like Starbucks (NASDAQ: SBUX) and Burger King (NYSE: BKS). Supermarkets may see some margin hit as well.

Even prison stocks like Corrections Corp (NYSE: CXW) may be bothered. The cost of bread and water has just gone up.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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