The spread of a deadly strain of bird flu into an Iowa egg farm accelerated market concerns over how big of a bite the current outbreak could take from the United States' egg and poultry businesses, sending shares of several leading meat companies' down on Tuesday.
Hormel Foods Corp shares were down more than 3 percent in early afternoon trading after the Austin, Minn.-based company said the impact of the virulent strain of avian influenza may drag its fiscal 2015 earnings toward the lower end of forecasts. Flocks have been infected in 12 states.
The virus has been identified at a facility west of Minneapolis that is owned by a subsidiary of Hormel. Minnesota, the largest turkey-producing state in the country, has been the hardest hit so far, followed by farms in Arkansas, Missouri, the Dakotas, Wisconsin and Iowa.
Hormel Chief Executive Officer Jeffrey M. Ettinger said in a statement on Monday the company was seeing "significant challenges" to its turkey supply chain because of the highly pathogenic avian influenza outbreaks in Wisconsin and Minnesota, where its Hormel and Jennie-O Turkey Store units are based.
The company said that while it expected the outbreak to potentially ease as the weather turned warmer, tight meat supplies and operational challenges in its turkey business as a result of the bird flu outbreak would put pressure its earnings.
The company said it now expected its fiscal 2015 non-GAAP adjusted earnings to be toward the lower end of its $2.50 to $2.60 per share outlook.
Poultry producer Pilgrim's Pride share prices were down 1.2 percent, and leading chicken producer Tyson Foods Inc and Sanderson Farms were down less than 1 percent.