MEAT+POULTRY - October 2015 - 10

BUSINESS NOTES

CARGILL TO SELL TEXAS PLANT

JENNIE-O POISED FOR BEEF BATTLE
Ground turkey is not a new product, but current market
conditions have given the management of Hormel Foods'
Jennie-O Turkey Store business unit optimism to make
inroads into the market for ground meats.
"Even if there are a few more cattle around in the next
year or two as that cattle cycle tends to move a little bit,
we really don't expect a significant (price) reduction at
retail," said Glenn Leitch, president of Jennie-O Turkey
Store during a Sept. 11 presentation at the annual
Barclays Back-to-School Consumer Conference. "That
cattle business hasn't been terribly profitable, and
somebody is going to need a margin there at some point
in time going forward."
Leitch added that Jennie-O is determined to drive
ground turkey sales growth and the company's target
market is younger consumers.
"We know we've got to hit that millennial set and one
thing we found about millennials is they value fresh, and
at Jennie-O Turkey Store we do fresh better than anyone
else," he said.
Leitch defined the ground beef category as having 2
billion lbs. in volume and approximately $7 billion in sales.
"If we can steal one share point, that's 21 million lbs. of
conversion to turkey," he said. "Now, we're not quite at a
point a year, but we have been making inroads and there's
no reason for us to expect that will change."
To achieve his goals, Leitch will have to overcome
several hurdles. For starters, Hormel's turkey business is
in the process of recovering from the outbreak of highly
pathogenic avian influenza that was devastating to the
egg industry. While AI struck with the most force in Iowa,
it had a similar effect in Minnesota, where many of the
turkey flocks that supply Jennie-O are based.
Flock repopulation is on track, Leitch said. As of
Sept. 1, 85 percent of the company's farms had been
repopulated.

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MEAT+ POULTRY | 10.15 | www.meatpoultry.com

Cargill announced it will sell its Plainview, Texas,
beef plant, which has been closed for two years.
The company retained the Dallas office of CBRE, a
commercial real estate broker to market the site and
evaluate potential offers.
"For the past two-and-a-half years we've closely
monitored the cattle supply in the US, hoping for
a faster recovery from the drought," John Keating,
president of Cargill's Wichita, Kan.-based beef business,
said in a statement. "We don't see conditions in the
Texas panhandle improving to the point where it
would make sense to reopen our Plainview beef plant,
especially with excess processing capacity remaining in
the region."     
Cargill closed the plant on Feb. 1, 2013, citing
tight supplies of cattle, the impact of country of
origin labeling and the controversy surrounding finely
textured beef. Approximately 2,000 employees worked
at the plant. Cargill redirected cattle that were destined
for processing at the Plainview facility to the company's
remaining beef processing plants in Friona, Texas,
Dodge City, Kan., and Fort Morgan, Colo.
The company noted that plant closures continue as
beef-processing overcapacity persists - even as market
conditions have improved in some regions. The US
cattle herd dropped to its lowest number since 1951, and
rebuilding of the nation's herd currently is underway.
Herd rebuilding is a slow process because each heifer/
cow produces a single calf yearly, Cargill said. 

INDIANA PACKERS TO EXPAND PORK PLANT
Indiana Packers Corp., a pork processor and bacon
manufacturer, plans to invest $40.6 million to expand
its pork processing operations in Delphi, Ind. The
announcement came from Indiana Gov. Mike Pence
during a trade mission to Japan.
The expansion will facilitate increased production
of bacon, ham, pork sausage and other pork products.
Additionally, the expansion is expected to create up
to 91 new jobs. Indiana Packers employs more than
2,000 workers at the company's two processing plants
in Delphi and Frankfort, Ind. The Indiana Economic
Development Association will grant the company up to
$475,000 in state tax credits and another $28,000 for job
training grants.
Mitsubishi Corp. owns the Delphi facility as part
of a joint venture with Itoham Foods. Indiana Packers
sells processed pork in the United States, Japan
and Mexico. Gov. Pence was joined in Tokyo with
executives from Mitsubishi and Indiana Packers for
the announcement.
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MEAT+POULTRY - October 2015

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