NEW YORK (Associated Press) - Standard & Poor's Ratings Services yesterday warned it may lower its credit ratings on food maker Kraft Foods Inc. after the company's third-quarter profit sank 20 percent, partly due to high dairy costs.
S&P noted that the company's margins will likely remained pressured through the fourth quarter and into 2008 by higher commodity costs, particularly for dairy. Dairy costs have skyrocketed due to international demand for milk and higher animal feed costs. Animal feed is made from corn, which has risen to record levels due to demand for the alternative fuel ethanol. Corn is also used to make the fuel.
(HT: Ray Wallace)