This year get ready to open your wallet wider and expect higher credit card bills for the basics like food, clothing and energy. You are probably wondering what is going on. While you weren't paying much attention, the price raw commodities surged in 2010. Corn, sugar, wheat, cotton, coffee and soybeans prices soared last year, as reported in the Wall Street Journal.

A confluence of factors pushed prices up. We had and still have demand explosion from China and India. The United Nations Food and Agriculture Organization's monthly food index which monitors a basket of commodities including meat, dairy and sugar rose for the sixth straight month to a record.

Those Cheerios commercials must be working. General Mills (NYSE: GIS) reported on Wednesday that its profit for the first quarter of its fiscal year spiked 51%, thanks to a hefty dose of product demand and lower costs for ingredients. Of course, this beat the hell out of analyst expectations. And, it caused General Mills to boost its outlook for the year.

For the quarter, General Mills posted $420.6 million in earnings ($1.25 per share). For the same quarter a year ago, earnings reached only $278.5 million ($0.79 a share). The company's profit was a tad higher when an expense related to commodity positions is excluded, pushing earnings per share up to $1.28. Analysts had expected earnings of $1.03 a share.

Looking back at the first month of the new year, I realize that the wife and I did quite a bit of "uncluttering": bags of old clothes donated to the local Goodwill, a complete makeover of the toy storage in the kids' room, a new home office, and a total restructuring of closets. Sound like fun to you? I know, it wasn't a blast, but the new space is nice.

Seems like cereal producer Kellogg (NYSE: K) is looking to help unclutter grocery store shelves and your cabinets by producing what is called a space-saving cereal box. Think about it, where do you store your cereal boxes? We have an older house with smaller cabinets, so the cereal boxes have found their way to the top of the refrigerator; however, Kellogg's new offering certainly seems as if it would work with our storage space. The shorter and fatter (which is how many people compare me to this guy) box will hold the same amount of your corn flakes or mini wheats, but with a smaller carbon footprint (Al Gore will certainly thank the company).

Kraft Foods Inc. (NYSE: KFT) announced a definitive agreement to merge its Post cereals business into Ralcorp Holdings (NYSE: RAH). The transaction is tax-efficient and worth approximately $2.6 billion to Kraft and its shareholders. For purposes of comparison, to have achieved an equivalent amount in a taxable transaction, Kraft would have needed to receive approximately $4.0 billion in cash for the business.

The Post cereals business had net revenues of about $1.1 billion in 2006, and includes such popular cereals as Honey Bunches of Oats, Pebbles, Shredded Wheat, Selects, Grape Nuts and Honeycomb. The brands in this transaction are distributed primarily in North America.

Douglas A. McIntyre is an editor at 247wallst.com.