St. Louis, MO, Dec 01, 2008 - In order to maintain a consistent level of service and innovation, Solae is announcing a global price increase, effective immediately, or as contracts allow.
Solae, like other food companies, has been affected by record-high increases on inputs, including raw material, energy, transportation, packaging and labor. The following are significant global market dynamics affecting food manufacturers:
-- Increased global demand for protein is placing pressure on agricultural and food markets. Middle classes are taking hold in China, India and Latin America, and those families are including more meat and dairy in their diets, forcing those industries to step up production.
-- Higher commodity prices increase feed costs for the livestock and dairy industries, impacting the meat and dairy protein markets.
-- While grain prices have declined over the past few months, this year's soybean crop prices are still nearly double what they were in 2005 and are anticipated to continue rising in 2009.
-- Protein levels from this year's North American soybean crop are significantly lower than in previous years, dramatically impacting our input costs and reducing factory capacity. While Solae is accelerating network capacity programs to mitigate the reduction in effective capacity and maintain its commitment to support the growing demand for soy protein, there is no near term solution for how to avoid the cost increase impact.
"Solae is not immune to these pressures and this new pricing is critical to our business and our ability to serve our customers," said Michele Fite, Solae vice president of global strategy and marketing. While market conditions are putting pressure on much of the food chain, Solae continues to be in a great position to help customers through these challenges by providing innovative, economical solutions. With animal protein prices at record levels, Solae's customers can count on our complete line of high-quality soy proteins and technical expertise to provide what many ingredient companies cannot -- more economical protein solutions to offset rising costs. "Solae's dedication to customer service, product quality, innovation and safety will remain unparalleled in the food industry," says Fite. "Solae is the brand that food marketers can trust to deliver consistent, quality ingredients that help lower total formulation cost and improve profitability."