Exclusive outtakes from industry leaders
Food and agriculture companies, having weathered the global economic meltdown, are now facing the prospects that renewed growth will spur renewed inflation.
With costs poised to rise for commodities like wheat and already high for items like sugar and cocoa, packaged foods makers face the task of trying to preserve profits at a time while retailers and consumers are balking at price increases.
Trade battles over U.S. meat and regulatory issues like a tax on soft drinks and push for more accurate disclosure of calories and fat on restaurant boards and food package are also concerns for the industry.
from Shop Talk:
The global economic meltdown has the World Bank on high alert.
As the financial crisis deepens, the World Bank is issuing even bleaker warnings about rising poverty and hunger in the developing world. Initially, it estimated that 46 million people in developing countries could be pushed into poverty. Now, that level is up another 7 million.
"We estimate that about 130 million people were pushed into poverty from the food crisis and if you add the financial crisis on top of that we are estimating that about 53 million more people could be pushed into poverty as a result of the financial crisis," World Bank Managing Director Ngozi Okonjo-Iweala told the Reuters Food and Agriculture Summit.
Children and women are being hardest hit, she said. The World Bank estimated that the current financial downturn may add between 200,000 and 400,000 additional infant deaths per year on average in the 2009 to 2015 period. That means a total of 1.4 million to 2.8 million more infant deaths, if the financial strain continues.
"The one big piece we need to look at in this financial crisis and its translation into the food crisis is that we're talking about human beings," said Okonjo-Iweala. "Remember that 923 million people are malnourished the world over. When you talk about the financial crisis becoming an unemployment crisis in the developed world, in the developing world for many poor people it's not an issue of unemployment, it's an issue of life and death."
(Reuters photos of Ngozi Okonjo-Iweala, Jan. 2009/Girls waiting for drinking water in Kathmandu, March 2009)
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The weakening of the U.S. dollar and other currencies has led farmers around the world to value their crops more highly than they do money, said Dan Basse, president of agricultural research firm AgResource Co.
“In Argentina, for example, farmers down there are more anxious to hold onto soybeans than pesos. When they need currency they’re willing to take a bag of beans and trade it for whatever they need during that particular day or week.
Sara Lee Chief Executive Brenda Barnes is looking to expand the reach of the food maker. But one thing she isn’t looking to do is sell tea in China.
Geographic expansion is a key strategy for the company through its coffee, tea and household products brands, she said at the Reuters Food and Agriculture Summit. However, business in Western Europe has suffered over the past eight months from recession.
from LEGACY Reuters Summits:
This week we've got a double dose of stories for you with both the Food Summit taking place in Chicago and the Funds Summit kicking off Tuesday in Luxembourg. Both summits come at a time when both sectors are in the spotlight. For food, one key question will be: How will cash-strapped consumers spend their hard earned cash if the current economic environment continues to deteriorate. We spent last week putting together a few stories ahead of the Food and Agriculture Summit.
Hormel shines as consumers eat at home:
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