The head of Nestle told the FT that long-term food prices were going up, perhaps sharply. He indicated that demand in China and India were one component this trend, and the need for corn in biofuels was the other.
Someone ought to tell Nelson Peltz about this. He has just put a bunch of money up to buy 3% of Kraft (KFT). Kellogg (K) and General Mills (GIS) should feel the pinch as well.
It should have occurred to the good companies that their investors long ago that the same supply pressure that are hitting oil and metals are coming to the food business as well. It may not be as easy to get consumers to pay a "China premium" on food as it has been on gasoline. They can always turn to Spam and Velveeta.
General Mills trades near its 52-week high. So does Kellogg (K).
That may not last.
Douglas A. McIntyre can be reached at [email protected].
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
