16°c Overcast
14°c Cloudy periods
Winnipeg Free Press - PRINT EDITION
Prepare for higher food prices, says Maple Leaf boss
TORONTO -- Grocery shoppers may need to dig deeper into their pockets as drought conditions inflate food prices well into next year and maybe beyond, Maple Leaf Foods president and CEO Michael McCain warned Wednesday.
Because Maple Leaf (TSX:MFI) buys ingredients in advance, consumers likely won't see higher prices for its products until the end of this year, McCain said.
"Rising grain markets, specifically corn, affect the entire food chain," McCain said in an interview.
"Broadly, we've got a good track record of responsibly passing on those cost increases in the marketplace and I think this won't be any exception."
McCain said it is too early to guess just how much of a squeeze consumers will feel on their wallets.
"We don't know exactly what the extent or the timing is of any price increases attached to this because the story of this year's crop conditions is still not fully told," said McCain.
"As this unfolds into the fall we'll have a much better picture."
The food processor reported a good quarter but said it will have to be "prudent" in its spending as it faces a challenging commodity market due to higher global prices for ingredients and drought conditions throughout North America.
The Toronto-based company's net income was $32.5 million in the three months ended June 30, up 32 per cent from $24.6 million in the second quarter of 2011.
Total sales from Maple Leaf's four business groups edged up to $1.26 billion from $1.24 billion, helped by price increases and strength in the company's fresh bakery and prepared meats businesses.
Maple Leaf says its adjusted operating earnings fell to $71.9 million or 28 cents per share from $77.5 million or 30 cents per share a year earlier.
The results were slightly ahead of analyst expectations, although there were relatively few estimates.
The consensus estimate compiled by Thomson Reuters before Maple Leaf's announcement was for $33.35 million of net income, 23 cents of adjusted earnings and $1.25 billion of revenue.
Maple Leaf shares rose 72 cents, or 7.2 per cent, to close at $10.72 Wednesday.
Derek Dley, an analyst at Canaccord Genuity, said more aggressive marketing during the quarter helped the company's sales. "They're ahead of my expectations, especially on the bakery side," said Dley.
"Margins were a lot stronger than I expected. It looks like the company was able to have a positive impact on volumes with greater promotional and marketing activities which seemed to be well targeted."
The company said earnings from its prepared meat business grew, helped by price increases and the closure of two facilities last year in an effort to simplify its meat-processing operations.
-- The Canadian Press
Republished from the Winnipeg Free Press print edition August 2, 2012 B5
More Latest News
- Back to Top
- Return to Latest News
More Latest News
(1 of 35 articles for today)
PST hike a 'difficult decision' but necessary, NDP official says
12:33 PM 0View Related
Poll
Most Popular Latest News
- Police searching for suspect who woke sleeping teen
- Rare comic book featuring debut of Superman found insulating abandoned house in Minnesota
- Evidence ignored in dangerous driving acquital, appeal court told
- Doctor charged with sexually assaulting teen at HSC
- Teachers vote to donate $1.5M to human rights museum
- Driver horrified by scene in rearview mirror after load hits I-5 bridge, road falls into river
- Systemic approach to voter interference 'extremely worrisome': Trudeau
- Overnight stabbings probed
- After LA synchronizes all stoplights traffic moves a bit better but the road war endures
- Armed forces buys buses from Motor Coach
- Man dies after being pulled from vehicle submerged in Winnipeg retention pond
- 87-year-old woman tells jurors, 'Somebody had to stand up to' Donald Trump
- Chiropractor guilty of sexually assaulting, beating ex-girlfriend
- Crash claims two young women, RCMP say
- 2 dead in crash near Portage la Prairie
- Grocer Joe Cantor dies at 88
- Winnipeg woman camps out in front of legislature to protest child welfare
- Rainfall warning issued for southern Manitoba
- Two men now facing first-degree murder charges in Tim Bosma test drive death
- Flood money paid for CEO's romantic trip
- Seattle man dribbling soccer ball to Brazil killed by car on Oregon Coast
- Man dies after being pulled from vehicle submerged in Winnipeg retention pond
- 87-year-old woman tells jurors, 'Somebody had to stand up to' Donald Trump
- Driver crashes into tree near golf course
- Arrests made after raids on local head shops
- Aboriginal leader Elijah Harper dies
- News of city's $17-million winner leaks out on FB
- Passengers from diverted flight to leave Winnipeg Thursday night
- No threat from bag found at Winnipeg Square
- Chiropractor guilty of sexually assaulting, beating ex-girlfriend
- Driver horrified by scene in rearview mirror after load hits I-5 bridge, road falls into river
- Youth faces murder charge in Pauingassi First Nation death
- Charges laid against Sharon Home over resident's death
- Grocer Joe Cantor dies at 88
- Famous city grocer loved job, customers
- Chiropractor guilty of sexually assaulting, beating ex-girlfriend
- Unjust justice: Still no aboriginal court in Manitoba
- Islamic life showcased
- PC white grape juice recalled nationally over undeclared sulphites
- Protesters to 'March Against Monsanto' across US, around globe in collective anti-GMO rally
- New owner for lumber stores
- Chiropractor guilty of sexually assaulting, beating ex-girlfriend
- Grocer Joe Cantor dies at 88
- MTS to sell Allstream to Egyptian investment group, focus on Manitoba market
- Famous city grocer loved job, customers
- Prominent Canadians back petition to rename Victoria Day to honour aboriginals
- First Nation celebrates groundbreaking on city's first urban reserve
- Marsh Madness: Photographers Fred Greenslade and Joe Bryksa capture spring migration's grandeur at Delta Marsh
- Skin picking gets status as distinct disorder, should help sufferers access help
- Order of Manitoba recipients announced
- New owner for lumber stores
- Aboriginal leader Elijah Harper dies
- Chiropractor guilty of sexually assaulting, beating ex-girlfriend
- Dogs can experience separation anxiety and depression just like humans
- 'Revenge of the redheads': Ginger-haired Montrealers gather in celebration
- Grocer Joe Cantor dies at 88
- An uncommon phenomenon
- Passengers from diverted flight to leave Winnipeg Thursday night
- Hundreds pitch in to dig out houses damaged, destroyed by Ochre Beach ice floe
- MTS to sell Allstream to Egyptian investment group, focus on Manitoba market
Ads by Google
You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.
Have Your Say
New to commenting? Check out our Frequently Asked Questions.
The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.