Jennie-O Turkey Store (18% of Net Sales, 9% of Total Operating Profit)
Operating profit declined 16 percent in the Jennie-O Turkey Store segment in the quarter despite an 8 percent increase in sales. Grain-related costs were $39 million higher compared to fiscal 2007. The increase in corn prices during the second quarter added a new layer of costs that were not fully recovered. Given the current market dynamics, we will be reducing our poult placements in our grow-out facilities by approximately 5%. We will also continue to pursue manufacturing efficiencies, customer and product rationalization, and pricing to improve profitability. Sales of value-added retail products continued to grow during the quarter, led by fresh tray pack, turkey burgers and marinated tenders. This helped offset softer sales of certain other value-added retail products, including pan roasts and turkey franks.
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