Maple Leaf Foods , the Canada-based food group, has seen first-quarter profits drop by over a third due to high grain and wheat prices.

The company today (24 April) posted underlying operating profits of C$33.1m (US$32.6m) for the three months to the end of March – down 34% on the year.

Sales were down 8.5% to C$1.2bn but higher grain and wheat prices further depressed earnings. Wheat costs hit margins from Maple Leaf ’s bakery business. Higher feed costs meant profits from Maple Leaf’s meat products group stayed flat, despite growth from packaged meats.

Maple Leaf admitted it had incurred “significant” losses from its hog production due to higher grain prices but president and CEO Michael McCain said he expects the upward momentum in commodity costs to be “temporary”.

McCain said: “We fully expect these to be difficult but transitory market conditions. Our underlying operations, in particular the value-added meats and bakery businesses, are very well positioned and early successes in the company’s protein restructuring is building a solid base for higher earnings.”