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Commodity Prices Hit Margins

Airlines, ethanol producers and meat processors will feel the pinch, according to a Fitch report.

By staff Writer | Updated on March 01, 2011

As the economy slowly revives, companies face a new threat: rising commodity prices that could pressure corporate cash flows and margins. According to a recent study by Fitch Ratings, the industries that are likely to feel the biggest pinch are airlines, ethanol producers, and livestock and poultry processors, with packaged-goods companies and retailers also likely to feel some pain.

Fitch argues that the Federal Reserve’s stimulus, federal tax policies and the exuberant growth in emerging markets like China and Brazil are all reinforcing the increases in commodity prices.

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