Avian Flu Hits Hormel's Jennie-O Turkey Business

US - Discussing the impact of recent avian influenza outbreaks, Hormel Foods says it is “experiencing significant challenges" in its turkey supply chain.
calendar icon 21 April 2015
clock icon 3 minute read

Hormel Foods Corporation has provided additional information regarding the anticipated impact of recent avian influenza outbreaks on its Jennie-O Turkey Store segment.

Highly pathogenic H5N2 avian influenza (HPAI) has been detected at multiple turkey farms that supply Jennie-O Turkey Store, resulting in the loss of affected flocks and temporary quarantine of farms in the area until a full cleaning process is completed. Lower turkey supply is expected to impact plant operations and cause reduced sales volumes as the year progresses.

Jennie-O Turkey Store is managing the occurrences in full cooperation with the USDA Animal and Plant Health Inspection Service and state agency officials, and is collaborating closely with industry associations and other poultry companies in the region to ensure food safety and employee safety. All flocks are tested for influenza prior to processing. No birds diagnosed with HPAI are allowed to enter the food chain.

Jeffrey M. Ettinger, chairman of the board, president and chief executive officer, commented: “We are experiencing significant challenges in our turkey supply chain due to the recent HPAI outbreaks in Minnesota and Wisconsin.

“While Jennie-O Turkey Store has delivered strong financial performance so far in the first half, tight meat supplies and operational challenges will pressure earnings in the back half of our fiscal year. We are currently maintaining our fiscal 2015 non-GAAP adjusted earnings guidance range of $2.50 to $2.60 per share, with the assumption that farm outbreak occurrences will decline as the weather improves, but expect turkey supply challenges to push our full year earnings toward the lower end of this range.

“We expect the financial impact of HPAI to be partially offset by favourable hog prices benefitting the Refrigerated Foods segment and portions of the Grocery Products segment.”

Hormel Foods will announce second quarter earnings and share additional information on Jennie-O Turkey Store segment performance on 20 May 2015.

According to the company's web site, 17 confirmed cases of HPAI involved flocks owned or processed by Jennie-O Turkey Store as well as those being raised by contract and/or independent growers. Ten of these were announced in the last week.

Further Reading

You can visit the Avian Flu page by clicking here.

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