Hormel Foods Corp said it continues to face high commodity prices, though prices were stabilizing which helped earnings for the third quarter ended July 26 improve.
The stabilizing prices compare to a rapid jump in prices a year ago, Hormel said.
"This year, while commodity prices have been high, they have been relatively stable," Mike McCoy, Hormel treasurer, said. "That has allowed for some margin recovery.
Still prices have not returned to 1994 and 1995 levels, Hormel said.
"Our input costs remain higher than normal," Joel Johnson, chairman and chief executive officer, said in a news release. "For Hormel Foods, pork prices stayed relatively high which, combined with reduced hog supplies and excess industrywide capacity, forced our plants to operate below optimum efficiency."
Corn prices moderated, but soybean meal prices remained relatively high, slowing returns at Hormel's Jennie-O Foods unit to more normal operating margins, Johnson said.
Earlier, Hormel reported net income of $18.2 million, or $0.24 a share in the third quarter, up from $4.0 million, or $0.05 a share, a year ago.
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