Check out higher commodity costs taking a big bite out of corporate profits.

On Wednesday, Kraft Foods posted a lower quarterly profit after higher costs for dairy products and other ingredients offset an 11 percent increase in sales.

While the sales jump showed Kraft is having some success with new products like Oscar Mayer packaged sandwich kits and Crystal Light drink powder sticks, the food maker could not overcome higher costs for ingredients and energy.

Meanwhile, Kellogg’s  fourth-quarter profit fell after the world’s largest breakfast cereal maker was hurt by rising costs for wheat and other commodities. Although Kellogg,  the maker of Frosted Flakes cereal, Eggo waffles and Keebler cookies, has increased prices and looked for ways to cut costs to try to offset higher commodity costs, it continues to be hit by soaring costs for ingredients and energy.

But for 2008, Kellogg stood by its earnings forecast of $2.92 to $2.97 a share. Analysts, on average, had forecast $3.01 a share. 

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(Photo: Reuters)