Food estimates that capital spending by the top 20, publicly held, US food and beverage companies will decline 2.9% this year. Eleven of the 20 firms plan to increase capital spending in 2009. In some cases, the companies are planning to do so because of acquisitions, including Ralcorp and J.M. Smucker. Of the 11 companies increasing capital budgets this year, eight plan double-digit percentage increases, led by Ralcorp which plans to increase capital spending 130% to $145 million. Four of the companies planning capital spending decreases overspent their capital budgets last year. Tony Perazzo, an audit partner at Grant Thornton, believes that food companies are being cautious and postponing capital projects until next year due to economic and credit conditions. Particularly hard hit have been animal protein firms due to declining margins.


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