LIVESTOCK HIGHLIGHTS: Top Stories of the Day

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05/21/2020 | 05:11 pm

TOP STORIES

 

Hormel Reports Smaller 2Q Profit, in Line With Expectations

Hormel Foods Corp. recorded a second-quarter profit in line with analysts' expectations as the company faced some temporary costs associated with operations during the Covid-19 pandemic.

The Austin, Minn.-based meats and foods company reported a profit of $227.7 million, or 42 cents a share, compared with $282.4 million, or 52 cents a share, for the same period a year earlier.

 

Covid-19 Testing Is Meatpacking Plants' Savior -- Market Talk

10:19 ET - Hormel Foods CEO Jim Snee says coronavirus testing for meatpacking plant workers has helped get employees more comfortable returning to the facilities and getting them up and running again. More widely available testing has helped companies like Hormel know "who's positive, who's negative, who has to sit out and who can come to work," says Snee, speaking on a quarterly conference call. US meat production took a big hit in late April, with pork and beef down nearly one third, though that has rebounded as more workers return to plants. Hormel says all its plants are running. Shares fall 4.1% to $46.04. (jacob.bunge@wsj.com; @jacobbunge)

 

Coronavirus Likely to Lift Thanksgiving Turkey Prices -- Market Talk

0958 ET - Thanksgiving is still six months away, but Hormel Foods executives expect that turkey prices are going to stay higher for the rest of the year partly due to the coronavirus pandemic. Surging supermarket demand for turkeys drew down stockpiles in cold storage facilities, Hormel CFO Jim Sheehan says on the Spam maker's quarterly conference call, and fewer young turkeys are being placed onto farms as processing plants -- including some of Hormel's Jennie-O Turkey Store Facilities -- have temporarily closed due to Covid-19. Turkey profits surged 54% for the quarter ended April 28 at Hormel, though overall profits fell due to higher costs. (jacob.bunge@wsj.com; @jacobbunge)

 

STORIES OF INTEREST

 

McDonald's Expects Coronavirus Challenges to Remain -- Market Talk

10:05 ET - McDonald's CEO Chris Kempczinski says changes in customer behavior brought by the coronavirus bring ongoing uncertainty to its business. "We expect our performance will remain challenged," Kempczinski says in the burger chain's annual shareholder meeting. The Chicago-based company is suspending share repurchases, reducing capital spending and opening fewer stores in most markets in response, Kempczinski says. Its long-term growth plan will also need to change as a result of the crisis, he says. (heather.haddon@wsj.com; @heatherhaddon)

 

Hilton Food to Benefit From Changing Consumer Behavior -- Market Talk

0936 GMT - Hilton Food has reported strong demand so far this year, and Peel Hunt expects the increase to be maintained over much of the summer driven by more family meals and closed schools. In addition, the U.K. brokerage foresees a permanent shift from over-the-counter meat services to packaged products as consumers avoid products which have been handled, which would benefit the group. Peel Hunt hasn't updated its forecasts yet, but says Hilton's short and long-term prospects are enhanced and raises the target price to 1,350 pence from 1,150 pence. Shares are down 1.4% at 1,266 pence. (jaime.llinares@wsj.com)

 

Ruth's Down After Stock Sale -- Market Talk

12:58 ET - Ruth's Hospitality Group is off 12% after the steakhouse company sells $43.5M in stock to Jefferies LLC. Ruth's amends its covenant to guarantee a certain level of liquidity each month this year as part of new credit terms. The hard-hit steakhouse chain says it has reopened 11 of company-owned restaurants and hopes to add more this summer, but that the majority of its dining rooms will remain closed for now. (heather.haddon@wsj.com; @heatherhaddon)

 

FUTURES MARKETS

 

China Has Allowed More US Facilities to Export Meat -- Market Talk

13:30 ET - China has updated its list of US facilities allowed to export meat to China- - with 499 beef, 470 poultry, 457 pork, 397 seafood, and 253 dairy producing facilities now certified to export goods to China, says the USDA and USTR. "As a result of these actions, more U.S. facilities are eligible to export U.S. food and agricultural products to China than ever before," the agency said Thursday. Livestock futures on the CME are up Thursday, with live cattle futures up 0.3% and hog futures up 2%. (kirk.maltais@wsj.com; @kirkmaltais)

 

CASH MARKETS

 
Estimated U.S. Pork Packer Margin Index - May 21 
 
Source: USDA, based on Wall Street Journal calculations 
All figures are on a per-head basis. 
 
Date     Standard Margin       Estimated margin 
         Operating Index         at vertically - 
                             integrated operations 
 
May 21       +$114.66            +$ 75.69 
May 20       +$122.57            +$ 79.99 
May 19       +$117.45            +$ 75.34 
 
 
* Based on Iowa State University's latest estimated cost of production. 
A positive number indicates a processing margin above the cost of 
production of the animals. 
 
Beef-O-Meter 
This report compares the USDA's latest beef carcass composite 
values as a percentage of their respective year-ago prices. 
 
                                 Beef 
          For Today             Choice  182.8 
      (Percent of Year-Ago)     Select  185.9 
 
USDA Boxed Beef, Pork Reports 

Wholesale choice-grade beef prices Thursday fell $2.23 per hundred pounds, to $401.81, according to the USDA. Select-grade prices fell $8.65 per hundred pounds, to $382.53. The total load count was 136. Wholesale pork prices fell $2.00, to $96.94 a hundred pounds, based on Omaha, Neb., price quotes.

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