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Futures (And Campbell) Killed The Cheap Lunch

Remember how Southwest was just killing everyone because they had something like 80% of their forward fuel requirements hedged at absurdly low prices for quarter after quarter? That worked wonderfully... until it didn't. It did, of course, earn Southwest the title of "The King of Fuel Hedging." Boosting their own hedging programs ended up costing a lot of other carriers (as well as Southwest) serious money later on. United Airlines had nearly half a billion in unrealized losses on fuel hedging not so long ago. (Anyone know how that turned out?) Of course, what looks smart at the time (does locking in years of prices when oil is at $102 a barrel ever look smart?) can look rather foolish later. These damn derivatives are tricky animals. Very tricky. And now their evil complexity has claimed another victim:
Cheap soup.

Consumers looking for relief from rising food prices are not likely to see any price cuts soon from Campbell Soup Co (CPB.N: Quote, Profile, Research, Stock Buzz), which is still dealing with high commodity costs under previously set contracts.

Pesky futures contracts!
Well, surely in these tough times, especially when derivatives have hit the typical family of four trying to pinch pennies by eating tomato soup and some toast for dinner where it really hurts, some price relief is in order, isn't it? In a word. No:

"Quite frankly, sales are growing, our marketplace presence is growing, consumer purchases are actually growing faster than sales," Conant said. "Clearly we're having a good year, we've had the best year in soup that I've experienced in my nine years here."

Does the evil of this system know no bounds?

One strategy the company has adopted is to offer some Pepperidge Farm bread loaves with smaller slices as a way to save money.

You want bread? THREE DOLLARS! (After the jump).

Campbell sees no price cuts near-term [Reuters]