Hormel to sell less turkey due to flu

Published 9:07 am Tuesday, April 21, 2015

Hormel Foods Corp. says it will sell less turkey this year because of a spreading bird flu outbreak.

So far the virus has been found at several farms tied to Hormel subsidiary Jennie-O Turkey Store. Those arms housed 2.3 million turkeys, all of which have died of the disease, or have been killed or soon will be in order to stem the spread of avian flu. Most of the birds were in Minnesota, which is the largest turkey-producing state in the U.S.

“We are experiencing significant challenges in our turkey supply chain due to the recent HPAI outbreaks in Minnesota and Wisconsin,” Hormel CEO Jeffrey Ettinger said in a press release Monday.

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Big commercial farms have been hit hard, and Hormel said it is experiencing significant turkey supply-chain problems. It expects outbreaks to decrease as the weather improves.

Jennie-O had a big quarter in Hormel’s 2015 first quarter, accounting for 18 percent of net sales after increasing operating profit by 56 percent and dollar sales by 10 percent.

“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,” Ettinger said in the release.

Hormel Foods Corp., citing its upcoming second-quarter report, said that it can’t comment on how turkey prices or the Thanksgiving turkey season will be affected.

Hormel is scheduled to report its earnings May 20 and said it will provide more details about its turkey business then.

According to a Jennie-O Turkey Store website, the highly contagious H5N2 strain of avian flu has been confirmed at 19 farms that are either independent contract growers for Jennie-O or are company-owned. All but one of those are in Minnesota.

Hormel says Jennie-O is managing the situation in cooperation with the USDA Animal and Plant Health Inspection Service and state agency officials, and the company is collaborating 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, the release states.

The virus has been found in turkey flocks in six states. Scientists believe domestic poultry are getting the virus from wild migratory waterfowl, although security measures at farms are supposed to minimize the chances that will happen. Once the virus is confirmed at a particular farm, all of the turkeys at that farm are killed and the location is closed for a full cleaning.

Hormel says all of its flocks are tested for the virus.

About 46 million turkeys are raised in Minnesota annually. It’s not clear why that state has been particularly hard-hit by the disease. About 235 million turkeys were produced in the U.S. last year.

On Monday, the U.S. Department of Agriculture said the virus was also found at an Iowa farm holding 5.3 million hens, or almost 10 percent of the state’s egg-laying chickens.