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Hormel Cites Fatal Bird Flu as Potential New Source of Inflation

The maker of SPAM also warns disagreement with labor unions may result in higher costs.

March 9, 2022

Hormel Foods (HRL), maker of Jenie-O Turkey and SPAM among other products, is signaling potential trouble ahead on the labor front. On the heels of a month-long strike that resulted in 10% wage increases and $8.5k bonuses at agriculture equipment manufacturer John Deere, Hormel says a key labor contract is set to expire in nine days.

In a filing for the quarter ending January 30, 2022, Hormel inserted new language revealing it has has not come to terms on a new deal with the United Food and Commercial Workers Union which represents hundreds of Hormel employees:

“The union contract at the Company's facility in Rochelle, Illinois, covering approximately 700 employees, will expire on March 18, 2022. Negotiations are ongoing.”

Separately, Hormel is warning of another inflationary threat that has not received much attention thus far. In addition to boilerplate language the company always includes regarding disease outbreaks, Hormel added new language warning of Highly Pathogenic Avian Influenza (HPAI), a fatal and highly contagious bird flu:

“HPAI has been detected within the United States in 2022. Spreading of the disease by wild birds during the spring migration poses a risk which could adversely impact the Company's poultry business.”

Related: CAG, TSN, SAFM, PPC

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