General Mills to raise food prices to offset costs

General Mills Inc. will raise prices on some cereals and snacks to reflect higher ingredient and shipping costs, as food companies battle inflationary pressures that are eating into profits.

The maker of Cheerios cereal and Yoplait yogurt said freight costs in North America were near 20-year highs in February and food prices were also higher than expected, prompting the conglomerate to lower its earnings expectations for the year.

"We are seeing an unprecedented rise in logistics costs," Chief Executive Jeff Harmening said in an interview.

For food costs, he said, "the inflation is not unprecedented, but we are a quarter late in reacting."

General Mills shares fell 9% on Wednesday to $45.06, their lowest price in five years.

The stock is down nearly 25% over the past year while the S&P 500 is up 16%.

Shares in other food makers including Campbell Soup Co., Kellogg Co. and Conagra Brands Inc. fell about 3% as well.

Campbell, Hershey Co., Mondelez International Inc. and J.M. Smucker Co. in recent months have said they are struggling to protect profits while freight and food costs rise.

Fourteen of the last 15 packaged food makers to reporter earnings... More...

thumbnail courtesy of

Want the the best stuff from our resource library delivered straight to your inbox?
We respect your privacy. That means no spam, ever.