Avian flu is whacking overseas demand for chicken, while overproduction at home is hurting prices. Japan has reinstated a ban on American beef. Hog prices have come off significantly from their highs. All in all, a bad time to be in the animal protein business, right?

Well, not necessarily. While it's true that many meat producers like Sanderson Farms (NASDAQ:SAFM), Pilgrim's Pride (NYSE:PPC), Smithfield (NYSE:SFD), and Tyson (NYSE:TSN) have gotten whacked, Hormel (NYSE:HRL) has been in the green for the past twelve months and still growing.


Reported revenue grew 11% in this fiscal first quarter, but organic growth was only about 1% atop flat organic volume performance. Likewise, operating income grew just 1% in the period. Jennie-O turkey was once again the leader in operating profit and margins, while refrigerated foods led in terms of total sales.

As with most companies that have several operating units, Hormel's latest quarter brought a mixture of good and bad news. Hormel is seeing higher turkey prices and lower feed costs, but management still believes that margins are destined to fall. In the refrigerated business, case-ready product growth is still very good, but energy and packaging costs are a drag. In grocery products, microwave food sales are up, while chili sales are down.

To be honest, I feel a little weird about this stock. On one hand, I think it may be the best-run meat company out there. On the other hand, its stock price reflects a lot of that, and it doesn't seem to be quite as interesting as an oversold value idea (unlike some other meat companies). I'm left to say this: If you hold it, keep holding it. If you don't already own it, though, you might want to at least take a look at some of the rivals before paying up for these shares.

For more meaty Foolishness:

Sanderson Farms is a Motley Fool Stock Advisor recommendation.

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).