Food Deflation Could Drive EPS Growth For Labeled Food Producers

Grain prices are set to drop after historically high yields, giving big food producers a chance to expand their margins and bolster their brand. But since those same companies are currently facing low volumes from the 2012 drought, and most analysts haven’t priced in the effects of food deflation, now is a good time to buy, explains Citi analyst David Driscoll. “The U.S. harvest will produce a record for field crop production, which has resulted in grain inventory replenishment and declining future agricultural prices,” Driscoll writes. “We expect grain and oilseed deflation of 20 percent in 2014, which is expected…