Hormel Foods is repurposing its Jennie-O Turkey Store Plant in Barron, Wisconsin, ceasing turkey harvest operations there and focusing completely on the production of value-added products within the Hormel Foods portfolio.
Hormel Foods CEO Jim Snee explained those plans on November 29 during the company’s year-end earnings call. The 2023 fiscal year for Hormel ended on October 29.
The Barron plant currently operates both turkey harvest operations and value-added production lines, Snee said, but the CEO said in order “to support growth across our broader portfolio, harvest operations are expected to case during the second quarter of fiscal 2024.”
Making those facility adjustments are consistent with goals the company established in 2021, he said, when the company announced a companywide transformation that included integrating the Jennie-O Turkey Store business into the rest of Hormel’s business operations. It also aligns with the plans to make the turkey business less of a commodity-driven business and put more emphasis on value-added turkey products.
“We are committed to building a more demand-oriented and optimized turkey portfolio that is better aligned to the changing needs of our customers, consumers and operators,” Snee said. “The actions at the Barron plant further right-size our turkey supply chain, supporting top-line growth, improved profitability and decreased exposure to commodity volatility.
“We’re also committed to optimizing the Jennie-O Turkey Store system, including freeing up plant space to support growth across the broader Hormel Foods portfolio. The Barron plant is expected to support high-demand and high-growth product lines across all areas of the organization.”
Impact of avian influenza
Snee and Hormel Foods Chief Financial Officer Jacinth Smiley both spent time during the call addressing the highly pathogenic avian influenza (HPAI) outbreak’s impact on Jennie-O Turkey Store.
“HPAI has reemerged again this fall, creating another unusual event affecting our vertically integrated supply chain,” Smiley said. “At the present time, we do not expect a supply impact to the degree we experienced in the first half of fiscal 2023. The situation remains fluid and the risk of additional cases creates a heightened level of uncertainty in the outlook of our turkey business.”
After being hit hard by HPAI in 2022, Jennie-O Turkey Store was eventually able to rebuild its supply and start promoting the Jennie-O business and products once again.
Whether Jennie-O can maintain the strong sales in the upcoming months, however, is unknown.
“We are in a unique situation right now because we had supply coming back,” Snee said. “And obviously as supply was coming back, there was a lot of work being done to restore the demand side of the business. I don’t think those were yet perfectly aligned. I do believe3 from the supply side as we sit here today, the supply is adequate to support the business. Now, how long does it support the business? How long do some of these outbreaks last? I think that those are the uncertainties and the volatility that we talk about.”
View our continuing coverage of the global avian influenza situation.