Are All Food Companies Hostage to Commodity Prices in 2008 ?

Implications: Wheat prices are up 100% in 12 month's. Dairy prices continue to climb, increasing the costs of most food manufacturers.Is this a temporary phenomenon or is food inflation here to stay ?  Both Kellogg's and Kraft have provided disappointing guidance in the last few weeks blaming wheat and dairy along with other commodity prices as the chief culprits.Does this mean all food companies will underperform for the next year or two ? What companies are best positioned to withstand the increasing cost pressures ?

Analysis:   I firmly believe that not all food companies will be affected the same by rising commodity costs.Increases in raw materials have occurred forever in the food industry and there are many ways to offset rising producer costs.Some companies like Unilever,Nestle & Campbell Soup are less impacted by wheat & dairy price increases.Others have more room to take pricing and to improve productivity in their operations and sales systems to offset rising prices.Lastly, commodity increases impact all food companies so raising prices has never been more easy because all food companies have to raise prices.Ever try to take a price increase into the Walmart buyer ? I have and its never been pretty.This time around the Walmart buyer will shrug and ask when will it go into effect.
 The fact is commodity prices hurt private label manufacturers and price competitors with less known brands more than they do the major brands.The major food companies have the ability to grow share or maintain profits within this environment.The tough part is deciding which one profit or share is more important !