Dean Foods (NYSE:DF) declined this week after it withdraw its 2014 guidance. With milk price rising to unprecedented levels, the razor thin profit margins are being wiped out by rising costs.
Dean Foods also said that the cost of milk in the second quarter was the highest in U.S. dairy industry history. In the second quarter, Dean Foods said average Class I Mover, a measure of raw milk costs, was $23.66 per hundred-weight, up 31% from last year and up 6% from the first quarter.
Indeed, DF offers an insight into the food packaging companies heavily impacted by raw material input costs. I begin to question whether we have ignored the input costs volatile in the food industry...
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