Hormel Foods is keeping a close eye on the hog industry as an increased harvest capacity is expected this summer, Jim Sheehan, the company’s senior vice president and chief financial officer said.
Speaking during Hormel Foods quarterly earnings call on February 23, Sheehan said there are three areas of focus as Hormel assesses the long-term future of the hog industry. Those are:
- Export demand
- Domestic consumption
- Total U.S. harvest capacity
“The majority of the new harvest capacity is reportedly coming online in late summer to early fall, representing an eventual capacity increase of about 8 percent,” said Sheehan, who became Hormel’s CFO in October 2016. “In our opinion, utilization of the additional capacity is dependent on increases in exports and domestic consumption. We will closely monitor the market dynamics as the new capacity comes online.”
Sheehan added that at the present time, Hormel Foods believes the company is at the right level of capacity, given the current market conditions, and adds, “We are well-positioned to make the necessary adjustments in our business to address changes in the pork industry.”
Hormel Foods, according to a Pig International survey of top pig producers and processors, is the seventh largest pig processor in the world, slaughtering 13 million head annually. The company is a multinational manufacturer of brand-name food and meat products. It is also the parent company of Jennie-O Turkey Store, the second largest turkey company in the United States.
During the first quarter of fiscal year 2017, Hormel Foods reported net earnings of $235 million, which was the same figure it reported during the first quarter of fiscal year 2016.
