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Avian flu, which already has killed 40 million turkeys in the U.S., has thinned flocks that Hormel Foods relies on for its Jennie-O turkey products.
As a result, Jennie-O sales will fall as much as 30 percent in the second half of this year, the company said, because it will be unable to get enough birds to meet demand, CFO Jacinth Smiley said in an analysts’ call last week.
As supplies fall, prices are rising; turkey breast meat is now about $6 a pound.
Prices are moving up not only because of the shortage.
Feed prices are up, with corn meal and soybean meal costing 40 percent and 125 percent more, respectively, than a year ago, Hormel said.
Feed prices will stay aloft for some time, due in part to a cold, wet spring in the U.S. that delayed planting this summer’s crops.
Hormel trimmed five cents from its 2022 earnings-per-share forecast, now pegging it between $1.87 and $1.97 a share.
TREND FORECAST: The avian flu epidemic is the worst in seven years and has spread across 36 states, devastating chicken flocks as well as turkeys and spiking prices for eggs and other poultry products. Therefore, this is another “wild card” event that is driving up prices, pushing inflation higher and putting more downward spending pressure on the working-class consumer sector.