June 20, 2008

Poultry prices this year will rise beyond expectations due to accelerating costs for grain and fuel, according to the USDA.

The USDA said retailers are passing the costs to consumers as global food demand boosts US exports, production disrupted by bad weather and more crops are used to make fuel.

Grain prices have hit new records this year while beef, pork and chicken prices are also spiking up.

Poultry prices may inch up 3-4 percent, up from 2.5-3.5 percent from the previous inflation estimations, the USDA said.

The USDA said egg prices are left unchanged at about 11 percent; dairy products were forecast to rise as much as 6 percent; and beef may increase 3 percent.

Wesley Moultrie, senior director of Fitch Ratings, said ratings for most packaged food companies are expected to remain stable in the near term, while protein processors more affected by rising grain costs are at a greater risk of downgrades.

Wesley Moultrie, senior director of Fitch Ratings, said in a note to investors yesterday. Ratings for most packaged food companies are expected to remain stable in the near term, while protein processors more affected by rising grain costs are at a greater risk of downgrades, the note said.

Corn futures rose to a record US$7.9 per bushel on CBOT on June 16 as the Midwest floods hurt yield prospects. Soy futures also jumped by 13 percent this month to a record of US$15.86 per bushel on March 3.