March 24/Minneapolis/The Toronto Star -- General Mills Inc. said it expects commodities inflation to accelerate, and in turn, the maker of Cheerios cereal and Progresso soups will continue to raise its own prices to keep pace.

General Mills, which reported a higher quarterly profit due in large part to a surge in international sales that offset a drop in U.S. cereal buying, was being squeezed by higher costs for ingredients such as grains, meat and dairy.

The company expects inflation on such items to be even higher in the fiscal year starting in late May than the 4-5% rise it has forecast for the current fiscal year.

General Mills said it had little choice but to pass those costs on to stores that sell its products, and by extension, to consumers.

"We need some list pricing (increases), and I think that our retail partners understand that," chief executive Ken Powell said in a conference call, citing the "magnitude" of commodity and energy inflation.

From the March 25, 2011, Prepared Foods' Daily News
For more of the latest news from the food and beverage industry, visit Prepared Foods' Daily News