Exclusive Interview: General Mills CEO Steve Sanger Speaks with Erin Burnett on "Street Signs" Today at 2 PM ET (Transcript Included)

street_signs_200x107.jpg

When: FRIDAY, SEPTEMBER 7 AT 2:00 PM ET
Where: CNBC'S "STREET SIGNS"

The following is the unofficial transcript of a CNBC interview with General Mills CEO Steve Sanger on CNBC's "Street Signs" today at 2:00 PM ET. All references must be sourced to CNBC.

In the CNBC exclusive interview with CNBC's Erin Burnett, Sanger discusses food prices, global export markets and the state of the global economy overall, among other topics.

ERIN: AS YOU CAN SEE, THAT'S THE BOARD AT THE NEW YORK STOCK EXCHANGE, WE'RE DOWN ABOUT 221, A LOW TODAY, A DECLINE FOR THE DOW WHICH FELL ABOUT 100 OUT OF THE GATE AND TRENDING LOWER EVER SINCE ON THE BACK OF THAT SHOCKING JOBS NUMBER THAT WE HAD. AND A BIG QUESTION FOR WHAT THE FED SHOULD DO THIS MONTH, IT'S ABOUT THE STRENGTH OF THE ECONOMY AND ALSO ABOUT TIPPING QUESTIONS ABOUT INFLATION. ONE PLACE THAT WE HAVE CONTINUED TO SEE INFLATION IS ACTUALLY IN FOOD PRICES WHICH AS WE JUST SAID ARE MORE IMPORTANT TO AVERAGE AMERICANS THAN ENERGY PRICES ARE. SO WHAT'S HAPPENING WITH FOOD PRICES? IT'S A CRUCIAL PART OF THE EQUATION FOR THE FED AND WE'VE GOT MEN TO ANSWER THESE QUESTIONS. STEVEN SANGER CHAIRMAN AND CEO OF GENERAL MILLS AND JOINING ME NOW, STEVE, THANK YOU FOR TAKING YOUR TIME OUT TO JOIN US FOR THE SPECIAL SHOW, WE REALLY APPRECIATE IT AND I HAD A HE LOVE TO START OUT WITH YOUR REACTION OVERALL TO THE ECONOMY RIGHT NOW WHERE YOU SIT FACING RISING COMMODITY COSTS WHEN YOU COME IN AND QUESTIONABLE ABILITY TO BE ABLE TO PASS THAT ALONG. HOW STRONG OR WEAK IS THE U.S. ECONOMY?

STEVE SANGER: WELL, I CAN SPEAK FOR OUR BUSINESS, WHICH IS VERY GOOD RIGHT NOW. DESPITE THE FACT THAT PRICES HAVE RISEN. AND AS I TALK TO OUR RETAILERS, THEIR FOOD BUSINESSES ARE STRONG SO, THE CONSUMER SEEMS TO BE CONTINUING TO HANG IN THERE AS IT RELATES TO BUYING FOOD.

ERIN: AND, I KNOW THAT YOU TRIED TO DEAL WITH YOUR RISING COMMODITY COSTS IN A LOT OF WAYS IN SORT OF THE FINAL THING YOU WANT TO BE FORCE TODAY DO IS ACTUALLY RAISE PRICES ON THE SHELF. HOW MUCH ARE PRICES GOING UP ON THE SHELVES RIGHT NOW, IF I GO TO THE GROCERY STORE?

SANGER: WELL, IF YOU LOOK AT OVERALL FOOD INFLATION OVER THE PAST THREE MONTHS, IT'S RUN IN THE FOUR TO 5% RANGE, WHICH IS ABOUT DOUBLE WHAT IT WAS RUNNING MAYBE SIX, SIX OR EIGHT MONTHS AGO, BUT WE, WE'RE ABLE TO PASS ALONG SOME OF OUR COSTS, BUT OUR GOAL IS TO ALSO OFFSET SOME OF THOSE COST WAS PRODUCTIVITY ACTIVITY, PRODUCTIVITY MEASURES SO THAT WE CANNOT PASS ALL OF THEM ALONG AND WE'VE BEEN QUITE SUCCESSFUL IN DOING THAT.

ERIN: STEVE, IT'S INTERESTING HERE, AND I'D LIKE TO BRING BOB IN, HE AND I DURING THE COMMERCIAL WERE SPEAKING ABOUT THE FOOD PRICE INFLATION ISSUE AND HOW THAT MIGHT AFFECT THE FED AND BOB, I'M CURIOUS, YOU'RE SAYING THIS MAKES THE FED'S JOB MORE DIFFICULT BECAUSE THERE IS INFLATION?

LANE: WELL, A LOT OF THE INFLATION IS COMING FROM THE WONDERFUL STORY ABOUT INDIA AND CHINA AND INDONESIA AND THOSE THREE COUNTRIES OR HALF THE WORLD AND THOSE 2 BILLION PEOPLE COME INTO THE ECONOMY, THERE'S A NATURAL DEMAND ON COMMODITIES. THEY ALSO ARE CREATING AN OPPORTUNITY TO KEEP PRICES LOWER SO, THE FED HAS A TOUGH, TOUGH CHALLENGE HERE TO BALANCE OUT.

ERIN: AND STEVE, WHAT IS YOUR REACTION TO THAT? I MEAN, DO YOU THINK THAT FOOD PRICES AND COMMODITY PRICES ARE RISING AT SUCH A RATE THAT IT SHOULD PUT A BIG QUESTION MARK ABOVE THE FED'S HEAD WHEN IT COMES TO A RATE CUT?

SANGER: WELL, CERTAINLY INFLATION IS HAPPENING IN FOODS, SO, TO THE EXTENT THAT THAT'S A CONSIDERATION FOR THEM, I THINK IT DOES MAKE THEIR JOB TRICKIER. OBVIOUSLY, THEY'RE DEALING WITH LIQUIDITY AS WELL, THE ECONOMY OVERALL, AND SO YOU KNOW, THEY'VE GOT A NUMBER THINGS TO BALANCE, BUT I WOULD SAY THAT I AGREE WITH BOB THAT THE STRONG GLOBAL ECONOMY IS ONE OF THE REASONS WHY WE'RE SEEING RISING COMMODITY PRICES ACROSS THE BOARD.

ERIN: AND STEVE, I GUESS I'LL THROW THIS QUESTION AT YOU AS WELL NOW THAT WE HAVE BOB WEIGHTED ON IT AND JOHN CHAMBERS DID THE OTHER DAY. WOULD YOU SAY THIS IS THE STRONGEST GLOBAL ECONOMY OF YOUR LIFETIME OR IS THERE SOME OTHER WAY THAT YOU WOULD DESCRIBE IT?

SANGER: WELL, IT'S CERTAINLY ONE OF THE STRONGEST AND I WOULD SAY THAT WE ARE BENEFITING FROM THAT. OUR BUSINESS IS NOW GLOBAL AND WE ARE GETTING OUTSTANDING GROWTH INTERNATIONALLY ACROSS OUR FOOD BRANDS AND VERY STRONG GROWTH IN THE U.S., TOO, SO DESPITE THE FACT THAT PRICES ARE GOING UP, DESPITE THE FACT THAT COMMODITIES, IF OUR COSTS ARE RISING, WE'VE BEEN ABLE TO OFFSET SOME OF THOSE AND OBVIOUSLY, WE'VE PLANNED FOR IT, BECAUSE IT'S NOT A NEW PHENOMENON. AGRICULTURAL COMMODITIES AND IN GENERAL HAVE BEEN GROWING THE PAST FOUR TO FIVE YEARS.

ERIN: BOTTOM LINE, STEVE, WHAT DO YOU THINK THE FED IS GOING TO DO? YOU'RE SAYING THAT BUSINESS IS PRETTY GOOD AND YOU'RE WORRIED ABOUT INFLATION, DOESN'T SOUND TO ME LIKE YOU NEED A FED RATE CUT?

SANGER: WELL, I'D SAY, AGAIN, IT DEPENDS ON WHAT THEIR PRIORITY IS. IS IT INFLATION OR IS IT LIQUIDITY AND DEALING WITH THE CONCERNS AROUND THE MORTGAGE MARKET AND I WOULD NOT TRY TO OUTGUESS THEM ON THAT. I WOULD JUST SAY THAT OUR BUSINESS IS GOOD, THE GLOBAL ECONOMY IS GOOD, AND WE-- AND THE CONSUMER SO FAR IS DOING WELL WITH THE RISING PRICES THAT THEY'RE SEEING.

ERIN: I'D LIKE TO GET BOTH OF YOU TO WEIGH IN ON THIS QUICKLY. YOU'VE TALKED ABOUT, STEVE, THE PAST FOUR OR FIVE YEARS WE'VE SEEN COMMODITY PRICES AND FOOD COSTS GOING UP. ARE THEY GOING TO KEEP GOING UP, THE WAY OF THE WORLD, PRICES ARE GOING TO KEEP GOING UP, THINGS LIKE WHEAT, CORN, SOY BEANINGS, YOU NAME IT.

SANGER: WE'RE PLANNING ON THEM CONTINUING TO GO UP. I THINK YOU REALLY WOULDN'T WANT TO PLAN ON ANYTHING DIFFERENT BECAUSE THAT MEANS WE'VE GOT TO MAKE THE RIGHT KIND OF INVESTMENTS IN PRODUCTIVITY AND MEANS FOR OFFSETTING THOSE COSTS. THE NOW, OBVIOUSLY OVER THE-- OBVIOUSLY OVER THE LONG-TERM THESE THINGS HAVE BEEN CYCLICAL. IN THE EVENT THAT THEY DO GO DOWN, THAT WORB BENEFICIAL FOR US, BUT WE'RE NOT COUNTING ON IT.

LANE: I WOULD AGREE WITH STEVE, THESE HAVE BEEN CYCLICAL OVER TIME AND THERE ARE NEW SECULAR TAIL WINDS THOUGH WHICH ARE GOING TO CREATE A LONG-TERM DEMAND AND LIKE STEVE, WE'RE REALLY WORKING ON PRODUCTIVITY AND ACTUALLY, THESE TOOLS HERE ARE PROVIDING OUR CUSTOMERS WITH PRODUCTIVITY ENHANCEMENTS FOR THEIR OWN OPERATIONS AS THEY SUPPLY FOOD TO THE WHOLE WORLD.

ERIN: ALL RIGHT, THANKS SO MUCH TO BOTH OF YOU, BOB IS STILL GOING TO BE HERE AND STEVE, I KNOW YOU HAD TO MOVE YOUR SCHEDULE AROUND AND I WANT YOU TO KNOW HOW MUCH WE APPRECIATE YOU DOING THAT.

SANGER: THANK YOU, AND BOB, GREAT LOOKING TRACTORS YOU HAVE THERE.

LANE: THANKS, STEVE, NICE TO TALK TO YOU, YOU'RE RIGHT UP THE MISSISSIPPI FROM US, SO ALL THE BEST TO YOU.

SANGER: THANK YOU.

ERIN: ALL RIGHT, WE'LL TAKE A BREAK. ON THE OTHER SIDE OF IT, THE OTHER PART OF THE EQUATION FOR THE FED ESPECIALLY WHEN WE TALK ABOUT INFLATION, THAT'S OIL, SO PRICES CONTINUE TO GO UP, THEY CONTINUE TO PUSH RECORD LEVELS, WHAT DOES IT MEAN FOR JOHN DEERE? JOHN DEERE IS MAKING A BIG BET ON ALTERNATIVE INVESTMENTS AND ALTERNATIVE ENERGY, WE'LL TALK ABOUT WHAT THAT IS, IT'S A WHOLE WORLD, OR IS IT, DIFFERENT WORLD FROM TRACTORS.



About CNBC:
CNBC is the recognized world leader in business news, providing real-time financial market coverage and business information to more than 340 million homes worldwide, including more than 95 million households in the United States and Canada. The network's Business Day programming (weekdays from 5:00 a.m.-7:00 p.m. ET) is produced at CNBC's headquarters in Englewood Cliffs, N.J., and also includes reports from CNBC news bureaus worldwide. Additionally, CNBC viewers can manage their individual investment portfolios and gain additional in-depth information from on-air reports by accessing http://www.cnbc.com.

Members of the media can receive more information about CNBC and its programming on the NBC Universal Media Village Web site at http://nbcumv.com/cnbc/.