Articles in this document:

· Livestock Producers Spike on Falling Grain Prices -Bloomberg (PPC, SFD, TSN)

· Shares Of Tyson, Dean Foods Higher On Lower Commodity Prices

· Jump in pork shares a good sign

· High On Smithfield Hog

· The Motley Fool: Sector Snap: Meat producers soar on optimism

Livestock Producers Spike on Falling Grain Prices -Bloomberg (PPC, SFD, TSN)

Street Insider

August 5, 2008

Bloomberg reports that stocks in the food processing industry, such as Pilgrim's Pride (NYSE: PPC), Smithfield Foods (NYSE: SFD) and Tyson Foods (NYSE: TSN), are seeing upside today on the back of sharply lower corn and soybean prices.

Amid a recent sell-off in the broader commodities, grain prices are sinking, making it cheaper to feed poultry, hogs and cattle. Bloomberg points out that corn prices have fallen four days in a row, down 12% over this period, while soybean prices were down 8.3% in the last several days of trading. These downside moves are just a drop in the bucket, however, as corn has risen more than 59% in the last year, at the same time soybean prices were up about 56%.

Shares of Pilgrim's Pride are currently up about 17%, or $2.15, to $14.50, shares of Smithfield are up 12%, or $2.68, to $24.96, and Tyson's stock is up 9.2%, or $1.38, to $16.38.

streetinsider.com

Shares Of Tyson, Dean Foods Higher On Lower Commodity Prices

DOW JONES NEWSWIRES

August 5, 2008 12:18 p.m.

Wall Street Journal

Shares of Tyson Foods Inc. (TSN) and Dean Foods Co. (DF) rose Tuesday as commodity prices dipped, giving meat and dairy processors a little relief following months of mounting grain costs.

Tyson shares were recently trading up 9.2% at $16.36 while Dean Foods rose 5.2% to $22.70. Both companies' share prices have fallen more than 20% in the past year as they've struggled to offset costs.

Tyson, the world's largest meat processor by revenue, barely broke even in its latest quarter, weighed by its poultry unit. Chief Executive Dick Bond told investors he expected corn and soybean costs to be about $550 million higher this year than last.

So far Tyson hasn't been able to pass along the higher costs to consumers, but Bond warned that higher prices are on the horizon. The company also said its U.S. chicken business will take longer than expected to recover from the high feed costs. For the second consecutive quarter, soaring grain costs sent Tyson's chicken operations to a loss.

Dean Foods - the nation's largest dairy processor and distributor - has had more success passing on rising costs to consumers. In late June, the company boosted its second-quarter earnings forecast citing its cost-cutting measures and the ability to pass on costs.

But profits at Dean Foods, which reports its quarterly results Wednesday, have been squeezed for much of the past year by surging energy costs and an oversupply of organic milk. When reporting first-quarter earnings at the end of April, Chief Executive Gregg Engles said it was clear Dean's results this year would "largely be driven by the commodity markets, which remain highly unsettled and inflationary."

Dean Foods will likely face higher business costs in the near term. The U.S. Agriculture Department has projected higher Class 1 milk prices, which serve as a barometer of the company's raw milk costs.

Both food and meat companies have been hit with higher fuel and ingredient costs as the world supply of grains hasn't kept pace with demand in markets like China and India.

Packaged food manufacturers have been able to cover much of their high energy, packaging and ingredient costs with price increases, but because of an oversupply of meat, companies like Tyson haven't been able to raise prices as quickly. The average retail price of cereals and bakery products in the U.S. rose 10.4% in June 2008 versus June 2007, according to the Bureau of Labor Statistics. But the average retail price of meats, poultry, fish and eggs rose just 2.9% during that period.

-By Lauren Pollock, Dow Jones Newswires

online.wsj.com

Jump in pork shares a good sign

Pig Progress

06 Aug 2008

Meat producers’ shares have vastly increased recently due to analyst predictions of an expected curtailed supply of pigs lifting pork prices.

Pork producers, such as Smithfield Foods, are cutting back on how many pigs they produce, causing a reduced supply that will lift pork prices in stores, said JPMorgan's Ken Goldman. Consumers, who are feeling the pinch from a softening US economy, are unlikely to push back on higher prices, he continued.

Goldman did warn however, that the industry shouldn’t celebrate too early. Meat producers have faced higher costs for grain, especially corn, which is needed to make animal feed as well as ethanol, which continue to be in strong demand. If producers have to pay more for corn to feed their animals these higher costs could impact their earnings.

In afternoon trading, shares of Smithfield Foods rose over 10%. Goldman said the company is poised for an "operational turnaround," as the industry works its way through the higher feed costs.

pigprogress.net

High On Smithfield Hog

Barron's \ Stocks to watch today

August 5, 2008

PIGGING OUT ON HOG PRODUCERS

That peculiar brand of procine flu that caused investors to stay far away from hog producers might be finally clearing the system. Shares of hog concern Smithfield Foods (SFD) increased 11% in Tuesday’s trading, after JPMorgan suggested that investors who want to participate hog-wild in the trade get in early, rather than wait until signs that the market has righted its problems have appeared.

Over-supply of hogs left the market for processed protein over-saturated for much of this year. But JPM noted that companies like Smithfield have pledged to curtail supply, helping to give pork prices some clearance. The sector would still face some headwinds from higher costs, even though products like cornfeed and grain could tick down as commodity prices have deflated recently.

The whole sector has gotten a lift Tuesday.

blogs.barrons.com

Sector Snap: Meat producers soar on optimism

By Associated Press August 5, 2008

The Motley Fool

Shares of meat producers soared on Tuesday after a JPMorgan analyst predicted that an expected curtailed supply of pigs will lift pork prices.

JPMorgan's Ken Goldman said pork producers, such as Smithfield Foods Inc., are cutting back on how many pigs they produce, causing a reduced supply that will lift pork prices in stores.

Goldman also said it's unlikely that consumers, who are feeling the pinch from a softening U.S. economy, will push back on higher prices.

However, Goldman warned that the industry isn't out of the woods yet.

Meat producers have faced higher costs for grain, especially corn, that is needed to make animal feed and the alternative fuel ethanol, which is in strong demand. These higher costs may cut into earnings for producers, if they have to pay more for corn to feed their animals.

"The industry still needs to work through the headwind of feed costs," Goldman wrote in a client note. "Though corn and soy have come well off their peaks, both remain high year-on-year."

Still, in afternoon trading, shares of Smithfield Foods Inc. rose $1.07, or 10.3 percent, to $24.57.

Goldman started coverage of Smithfield at "Neutral," and said the company is poised for an "operational turnaround," as the industry works its way through the higher feed costs.

"We believe that longer-term investors, particularly those who would rather be early than late, may want to look at Smithfield with a more constructive view," Goldman wrote.

Elsewhere in the sector, Pilgrim's Pride Corp.'s stock jumped $2.19, or 17.7 percent, to $14.55, and shares of Sanderson Farms Inc. rose $2.09, or 5.3 percent, to $41.55.

Shares of Tyson Foods Inc. rose $1.08, or 7.2 percent, to $16.07.

fool.com