There's little question that food prices are heading higher. According to the Bureau of Labor Statistics, food prices rose 0.4 percent in February, the most since September 2011. The higher costs cover the gamut of foods from meats and dairy products to fruits and vegetables.
It's a safe bet that consumers won't like feeling the economic pinch at the checkout stand. But does food inflation mean boon times for the stocks of food-producing companies like Archer Daniels Midland, and Hormel? How about retailers like McDonald's and Albertson's. Not likely say experts.
"Depending on where you are in the food chain, rising food commodity prices are not an indication of rising commodity revenues for companies," said Jack Plunkett, head of his own market research firm, Plunkett Research. "Inflation actually scares them."
He explained that unless a company dominates its food item, it has little if any power to control prices along the production line—prices that usually go up along with prices at the retail store.
Food companies know that consumers these days are highly sensitive to increased costs for what they eat and there's little benefit from price increases for anyone, Plunkett added.
"Before 2008 and the recession, people were a little less sensitive to higher food prices," he said. 'But now they are more wary of what it costs to buy food and companies have a difficult time passing on their rising costs and charge more because of that."