AUSTIN, MINN. — During a Nov. 29 earnings conference call for its fiscal fourth quarter, Hormel Foods Corp. executives detailed recent developments of its Jennie-O Turkey Store business.

The company said it would convert its Barron, Wis., plant into a value-added-only facility and expects to stop the turkey harvest operation by the second quarter of fiscal 2024.

“These actions at the Barron facility are consistent with the goals we laid out in late 2021 and when we first announced transformational efforts at Jennie-O Turkey Store,” said James P. Snee, chairman, president and chief executive officer of Hormel Foods. “We are committed to building a more demand-oriented and optimized turkey portfolio that is better aligned to the changing means of our customers, consumers and operators. The actions at the Barron plant further rightsized our turkey supply chain supporting consistent top-line growth, improved profitability and decreased exposure to commodity volatility.”

Snee added that the company is committed to optimizing the Jennie-O Turkey Store system, which includes freeing up plant space to support growth across the Hormel Foods portfolio.

“The Barron plant is expected to support high demand and high growth product lines across all areas of the organization,” he said.

Later in the call, Jacinth Smiley, chief financial officer for Hormel, addressed how the turkey markets continue to move lower during the fourth quarter, which pressured prices across the company’s channels.

“We have assumed prices will remain depressed in our fiscal 2024 outlook,” Smiley said. “We do expect to partially offset these pricing headwinds with lower feed costs.”

Smiley also acknowledged the return of more cases of highly pathogenic avian influenza (HPAI) outbreaks and how they impact Jennie-O.

“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 supply impacts 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.”

Later in the call, Snee discussed Hormel’s strategy during another HPAI surge.

“I think the turkey supply situation is 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. And I don’t think those were yet perfectly aligned. So, I do believe, from a 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 in this outlook.”

Snee noted that in early 2023, whole-turkey prices were at all-time highs but have since fallen below the five-year average due to some these market factors.

More details about the Hormel fourth quarter earnings can be found here.