Kevin Jones – Director of IR Jeff Ettinger – Chairman, President & CEO Jody Feragen – SVP & CFO

Farha Aslam – Stephens Inc. Bill Chappell – SunTrust Robinson Humphrey Christina McGlone – Deutsche Bank Diane Geissler – Merrill Lynch Jonathan Feeney – Wachovia Securities Robert Moskow – Credit Suisse Tim Ramey – D.A. Davidson & Co. Ann Gurkin – Davenport & Company Chris Pritzel [ph] – Lehman Brothers

Good morning, ladies and gentlemen, thank you for standing by. Welcome to the Hormel Foods third quarter earnings conference call. During today’s presentation all parties will be in a listen-only mode. Following the presentation the conference will be opened for questions. (Operator instructions) This conference call is being recorded today, Thursday, August, 21st of 2008. I would now like to turn the conference over to Kevin Jones, Director of Investor Relations. Please go ahead, sir.

Good morning. Welcome to the Hormel Foods conference call for the third quarter of fiscal 2008. We released our results this morning before the market opened around 6.30 AM Central Time. If you did not receive a copy of the release, you can find it on our website at www.hormelfoods.com under the Investors section. On our call today is Jeff Ettinger, Chairman of the Board, President and Chief Executive Officer, and Jody Feragen, Senior Vice President and Chief Financial Officer. Jeff will provide a review of the operating results and an outlook for the remainder of fiscal year 2008. Then Jody will provide detailed financial results for the quarter. The line will be opened for questions following Jody’s remarks. And audio replay of this call will be available beginning at 11:00 AM Central Time today, August 21, 2008. The dial-in number is 800-405-2236 and the access code is 11118122. It will also be posted to our website and archived for one year. Before we get started with the results of the quarter, I need to reference the Safe Harbor statement. Some of the comments made today will be forward-looking and are made under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed in or implied by the statements we will be making. Among the factors that may affect the operating results of the Company are fluctuations in the cost and availability of raw materials and market conditions for finished products. Please refer to Pages 25 through 30 in the Company's 10-Q for the fiscal quarter ended April 27, 2008 for more details. It can be accessed on our website. Now, I will turn the call over to Jeff.

Good morning everyone. We continue to generate strong top line growth at Hormel Foods as all five of our operating segments delivered both volume and dollar sales gains during the quarter. Overall, sales for the quarter reached $1.68 billion, up 10% from the prior year and up 8% excluding acquisitions. As indicated in our preannouncement on August 8th, our bottom line results were less satisfying. Our earnings per share for the quarter were $0.38 compared to $0.41 last year, a decrease of 7%. Feed and fuels costs continue to rise during the quarter, squeezing profitability at our Jennie-O Turkey Store segment. In addition, after generating strong double digits earnings growth for the first half of the year, our Refrigerated Foods segment ended Q3 with relatively flat segment profits versus year ago. Finally, Q3 earnings were also impacted by an $8 million decline in investment income. I will now take you through each segment. The Grocery Products segment had another excellent quarter reporting 10% dollar sales and 11% operating profit growth. Sales of our Hormel and Stagg chili products registered strong double-digit gains during the quarter as a result of improved retail promotional program and gains over competitive brands. Our Dinty Moore stews also performed very well with strong double-digit sales growth aided by the sales of the Big Bowl microwave product and a solid consumer market and in-store effort. Sales of our SPAM family of products and Hormel Compleats microwave meals also helped drive results for Grocery Products in Q3. In Refrigerated Foods, operating profit decreased by 1% while dollar sales were up 8%, up 4% excluding acquisition. The delivery of solid margins in fresh pork and pricing taken by our Meat Products and Foodservice Divisions were insufficient to overcome some sharp increases in meat cost experienced by those divisions during the quarter. Rapidly increasing demand in export markets helped drive those higher pork cost. Retail products with particularly strong sales growth included Di Lusso deli products, Hormel Pepperoni, and Hormel Refrigerated Entrees, all of which posted double-digit sales increases compared to a year ago. Our Foodservice Division, within Refrigerated Foods continued to see softness in the casual dining segment, offset in part by increased sales in other channels. Jennie-O Turkey Store sales dollars were up 11% reflecting a combination of price increases and volume gain. Operating profit was down 61% for the quarter. Increased feed and fuel input costs pressured margins throughout the business. An excess supply of commodity turkey breast meat also kept pricing at a low level, exacerbating the cost-price differential. While the Jennie-O Turkey Store team continued to implement price increases across the retail, foodservice, and deli divisions, these increases were not adequate to offset the approximately $53 million increase in feed and fuel input costs incurred during the quarter. Jennie-O Turkey Store was not without its bright spots for the quarter. In particular, sales of Jennie-O Turkey Store burger, retail tray pack products and marinated tenderloins all registered double-digit sales gains during the quarter. The Specialty Foods segment had a strong quarter with dollar sales up 14% and operating profit up 205. Each of the three business units in this segment reported higher net sales and operating profits for the quarter. The Specialty Products business unit experienced higher contract manufacturing volume, while Century Foods International significantly expanded its sales of ready-to-drink products as well as generating increased sales of ingredients and nutritional powders. We made a small acquisition during the quarter, which will become part of the Diamond Crystal business unit. This Company, doing business as Boca Grande Foods, is a small liquid packet manufacture. This acquisition will add approximately $22 million per year in sales to the Specialty Foods segment and provides Diamond Crystal with additional capacity and customer for liquid portion products. In the All Other segment our international business team delivered another excellent quarter with sales up 33% and operating profit up 19%. Strong export sales of the SPAM family of products and fresh pork were the key drivers, more than offsetting a decline in equity in earnings primarily related to the weaker Philippine peso and decreased royalty income. In terms of our outlook going forward, as stated in our preannouncement on August 8th, 2008, and again in our earnings release this morning, we have adjusted our full year guidance to $2.22 to $2.28 per share. This is still solidly above our GAAP results last year of $2.17 per share, $2.14 excluding the sale of assets in the fourth quarter of 2007, though this level is admittedly not at our targeted level of earnings growth. It is our view that the longer term outlook is favorable for improvement in the turkey complex. Grain prices have moderated in recent weeks and the industry would certainly benefit from a leveling out of feed cost after two years of dramatic increases. Similarly, we believe there will be a reduction in the amount of turkey meat on the market in 2009 in light of our previously announced 5% production cut and those we anticipate from others in the industry based on macro conditions. It is important to note, however, that the benefit of lower grain cost and the production cut may not be fully realized in our Jennie-O Turkey Store operating results until the spring of next year. On the grain side we still need to cycle through turkeys with feed cost higher than today’s level and to finish the task of getting pricing up to these levels. On the commodity meat side, our cutback will not impact pounds until November and it will likely take the traditional pickup in demand in the spring to finish working down the existing meat inventories. All told, the combination of these turkey industry conditions, and expected volatility in the pork complex will likely present continued challenges to our business in the early part of fiscal 2009. We believe we should see a return to more historical earnings growth for the latter part of 2009 and beyond. In the mean time, we remain focused on growing the business by increasing our brand strength, continuing to enjoy success in new product innovation, and building upon our market share position in key categories. At this time, I will turn the call over to Jody Feragen to discuss the financial information.

Thank you, Jeff. Good morning everyone. Earnings for the fiscal 2008 third quarter totaled $51.9 million or $0.38 per share compared to $57.4 million or $0.41 a share a year ago. Earnings for the nine months of fiscal 2008 totaled $217.7 million or $1.58 a share compared to $200.7 million or $1.44 a share a year ago. Dollar sales for the third quarter totaled $1.7 billion compared to $1.5 billion last year, a 10% increase, as Jeff mentioned. Acquisitions added about $38 million to the top line in the third quarter. For the first three quarters of 2008, dollar sales increased 8% to $4.9 billion. Acquisitions added $106 million to the top line in the first nine months. Volume for the third quarter was 1.1 billion pounds, up 7% from 2007. Acquisitions added 24 million pounds to the quarter. Volume for the first three quarters of the year was 3.5 billion, up 6% from fiscal 2007. Acquisitions added about 73 million pounds in the first nine months of 2008. Selling and delivery expenses in the third quarter were 12.2% of sales this year compared with 12.4% last year. Year-to-date, the expenses were 12.7% of sales compared to 12.8% last year. We expect selling and delivery expenses to be above last year’s level for the remainder of the year due to higher freight and warehousing costs as well as increased marketing expenses. Advertising expenses were 1.5% of sales for the quarter compared to 1.6% last year, and year-to-date the expenses were 1.6% of sales compared to 1.7% in fiscal 2007. Advertising expenditures for the full year are expected to exceed those of fiscal 2007 as we continue media (inaudible) campaigns on several product lines. Administrative and general expense was 2.8% of sales for the quarter and year-to-date compared with 2.7% for last year’s quarter and year-to-date. We expect administrative and general expenses to remain at their current levels for the remainder of this year. The decline in investment income was attributable primarily to performance of our rabbi trust assets. This decline reflects the overall challenging investment environment. Interest expense for the quarter was $7.5 million compared to $6.6 million last year and year-to-date interest expense is $20.6 million compared to $20 million last year. We expect interest expense to be approximately $27 million for the full year. Our total long-term debt at the end of the quarter was $350 million and we ended with $75 million outstanding on our short-term line of credit related primarily to working capital needs. Depreciation and amortization for the quarter was $31 million, which is even with last year. For the first nine months of the year depreciation and amortization was $95 million compared to $94 million last year. We expect the full year depreciation and amortization to be about $125 million to $130 million. Our effective tax rate in the third quarter was 35.2% versus 36.5% in fiscal 2007. The year-to-date effective tax rate is 36.1% compared to 36.2% last year. For the full year we expect the effective tax rate to be between 36% and 36.5%. Capital expenditures for the quarter totaled $28 million compared to $27 million last year. For the first nine months of the year, capital expenditures totaled $96 million compared with $97 million last year. For the full year we have lowered our expected capital expenditures to be about $125 million to $135 million. Construction of our new microwave plant in Dubuque, Iowa is progressing on schedule. The basic weighted average number of shares outstanding for the third quarter was 135 million and for the first nine months of 2008 was 136 million. The diluted weighted average number of shares outstanding for the third quarter and the first nine months of the year were 137 million. We repurchased 951,000 shares of common stock during the third quarter at an average price of $36.34. We have 2.6 million shares remaining to be repurchased from the 10-million share authorization in place. We processed 2.3 million hogs in the quarter, about even with last year, and for the first nine months of the year we processed 7.1 million hogs compared to 7 million last year. The actual live hog cost in the third quarter was $57 per live 100 weight, at the top end of the forecasted market we provided on our second quarter conference call. This compared with an average live price of $55 in the same period a year ago. At this time, I would like to turn the call over to the operator for question and answers. Operator?

Thank you. And ladies and gentlemen, at this time we will begin the question-and-answer session. (Operator instructions) And our first question comes from the line of Farha Aslam with Stephens Inc. Please go ahead. Farha Aslam – Stephens Inc.: Hi, good morning.

Good morning, Farha. Farha Aslam – Stephens Inc.: Hey, turning up with a big picture question, I want to ask you yours – your operating margin has been around 7.5% to 8%. Kind of looking out just do you anticipate that margin to change at all via acquisitions or innovation? Is there a particular goal that you have for that number?

We have talked in the past about trying to move operating margins to sort of the 25 basis point range on an annual basis. obviously though that is subject to fluctuations depending on what we are confronting in any given year, and so we – in certain divisions we are clearly not doing that right now. We do believe there is that kind of an opportunity for advancement within Grocery Products, in particular. We talked before about trying to get back up on a long-range basis into the more 18% in that group. We think Refrigerated over time has an opportunity to be delivering margins that are above what – the last three or four year tracking range has been. And we continue to expect overall it’s – what we are driving for is kind of the 10% segment profit growth from each area with one exception to that being the international group where in the long run we would expect it to be able to grow at a longer – faster rate. Farha Aslam – Stephens Inc.: Okay, that’s helpful. And then could you share with us your thoughts on the hog market currently? Do you anticipate that the hog herd in the U.S. will contract going forward and if so when?

That’s a tough one to call for. Things have certainly changed a lot since the last quarter that we have been on with the run – decline in the grain markets, and it seems the ever demand from our exports. The big question I guess that we are facing is what is going to happen with the export market year-over-year and I think USTA is calling 2009 to be stronger than this year. That obviously will depend on availability of product sales through in the world as well as what the U.S. seller does. I would expect that for our fourth quarter we will see hog prices higher than a year ago. Farha Aslam – Stephens Inc.: So you are looking for it to be higher than a year ago. Would you venture to guess a range?

You noticed I didn’t provide one this time. Farha Aslam – Stephens Inc.: Yeah, exactly.

I would probably say in the $58 to $62 range on a live 100 basis. That’s the way we look at it. Farha Aslam – Stephens Inc.: Okay, that’s helpful. And then my final question is on your margins in the pork products or the Refrigerated Foods area. Those margins were pressured more than I had anticipated especially given that fresh pork is doing so well. Could you just explain to us how pricing in that segment works for Hormel?

Really, Farha, there were two things operating in the Refrigerated Food results that ended up having them be down flat to slightly down for the quarter, which was below what our expectations had been. We had said we really didn’t expect them to keep moving along at a 20% plus clip in earnings growth like they did in the first half but we had expected at least for a solid single digit growth. The first thing that occurred was we really got off to a difficult start in terms of the hog markets and I think even when we were on the call the last time we were already three weeks into the quarter and we had seen that early spike in the market in terms of the live hog cost. And so any time there is a quick run up like that an unanticipated early run up like that, that did end up pressuring overall margin performance for the unit. There was – it did abate somewhat in June and then kind of ended up a little higher in July when all told we were at – as Jody had mentioned, at the upper end of what we had predicted for hogs. But that first period got us off to tough start in the quarter. Secondly, this whole picture with export demand seems to be causing some distortions in value within certain of the raw materials. You have certain items like hams that were anywhere from 15% to 30% above the five-year average during the quarter. Trim [ph] values were again 15% to 20% higher than normal. And these are items that we use in a big way to convert into value-added products. And so when those ran up as quickly as they did and really to levels that we hadn’t anticipated, we did not have full pricing in place to cover down those run ups. Farha Aslam – Stephens Inc.: And are they in place right now?

We feel we are in a better position in the fourth quarter to be able to recover against those kind of the – the market we are seeing – and the markets are still quite high as we sit here in August for a couple of these raw materials. But they are starting to drop and given some of the hog number expectations we have we would expect the continuation of getting down to more normal levels. Farha Aslam – Stephens Inc.: Okay, thank you. I will pass it on. Okay, thanks Farha.

Thank you. Your next question comes from the line of Bill Chappell with SunTrust Robinson Humphrey. Please go ahead. Bill Chappell – SunTrust Robinson Humphrey: Good morning.

Hi Bill. Bill Chappell – SunTrust Robinson Humphrey: I guess on the turkey side, where do we need prices to be to kind of get back to the normalized margins? And do you think you can get there as you work through the – through the spring kind of inventory into the back half of next year?

I think we indicated last quarter that we are now in a position I think probably not different from others in the industry where breakevens on cost against the breast meat component is certainly north of $2, it’s $2.10, $2.20 in that range. And so – that was another element of the Jennie-O’s story the quarter. We knew it was going to be a difficult quarter but we really hadn’t expect breast meat to just sit there at $1.74 the entire quarter. We had anticipated a run up over the $2 range and getting close to breakeven on that. Typically, the strong time of the year is going to summer or potentially early fall and we haven’t been seeing that run up this year. And so that was kind of what I was getting at in the comments it’s the timing of when we would expect a recovery. If production cuts come through at kind of levels we would anticipate seeing, then we would think that next year when you get into the stronger season, we should see values that will – that would recover cost and potentially provide some commodity margin. You know our focus is always on value-added products and we have very strong branded position. And so we kind of look – as long the commodity side of the business is not being detrimental to our results, we are satisfied with that, but that was not the picture obviously during this quarter and it won't be next quarter either. Bill Chappell – SunTrust Robinson Humphrey: But just to make sure I understand I mean your thought of why the prices didn’t rise during the quarter had more to do with just inventory out there or was it production cuts kind of slower than you expected to happen?

Well, we really frankly didn’t production cuts in this summer. I may take a certain amount – we announced ours in May and we said at that stage, I mean it takes 22 weeks basically to cycle in and so we wouldn’t start seeing those reduced numbers in our facilities until November and we hadn’t heard of any others at that stage. So we really didn’t expect cuts to take effect in the summer. What has happened is it’s just been a robust year in terms of meat availability, the bird health has been good, livability in the industry have been strong, weights have been up. And so those kind of things have increased total meat supply by a couple of percent that’s been enough to hold the value down. And it just so happens okay those are down. Last year in August breast meat values were in the $2.80s, the year before in the $2.90s, this year $1.74, and obviously we are in a much different cost scenario right now than we were in those years too. So, it’s really the combination of having the commodity meat not be worth what we had expected and the added cost that have caused the squeeze going on at Jennie-O. Bill Chappell – SunTrust Robinson Humphrey: Okay. And then just one last kind of for your full year guidance or your fourth quarter expectations, are you assuming the rabbi trust post a similar type performance as it did in the July quarter?

We traditionally just assumed flat for that and that’s what we are looking at for the fourth quarter. Bill Chappell – SunTrust Robinson Humphrey: Great. Thank you.

Thank you. Your next question comes from the line of Christina McGlone with Deutsche Bank. Please go ahead. Christina McGlone – Deutsche Bank: Good morning.

Hi, Christina. Christina McGlone – Deutsche Bank: Jeff, just following on Farha’s question, in Refrigerated, if we look at year-over-year operating profit performance, it seems you now have more pricing in place and you commented that you think pricing is coming down. Do you think that we should see a better performance year-over-year in the fourth quarter and then how does that look as we head into next year?

Oh, Christina, I don’t have an outlook for you at this time for ’09 but I – but in terms of Q4 my expectation right now is that we should see a better quarter from Refrigerated Foods. We should see some growth there. I don’t – again, don’t expect high double digit growth that we were generating in the early part of the year, but I do expect that they will be able to have a positive quarter in Q4. Christina McGlone – Deutsche Bank: Okay. And then on the retail side (inaudible) I don’t think there was any pricing on the top line and I remember that you had implemented a price increase earlier this year, so I am curious why that didn’t show through.

When you say – what are you referring to when you say the retail side? Christina McGlone – Deutsche Bank: I am sorry, on – in Grocery Products.

Within Grocery? Christina McGlone – Deutsche Bank: Grocery, yeah.

Well there it’s really an item-by-item basis. There were some items within the portfolio that we did take pricing and did show through. SPAM and Compleats would be two in particular. We didn’t do it on every item in the portfolio. So net-net, yeah, it ended up with the volume and the net sales were both similar, both up on a strong basis. Christina McGlone – Deutsche Bank: So, the pricing that you implemented did flow through, it wasn’t dealt [ph] back, it’s just – it just netted out with the different products, that’s what you are saying?

Yes, and the other thing that goes on when you look at a total division is the mix. I mean you end up – we had very strong quarters for, chili for example, which are excellent franchises for us, but on a dollar sales basis they are not as high as some of the other items within the mix. So that can create a little bit of a distortion too, but – our tracking would show that we are not – we have not been dealing effect [ph]. Christina McGlone – Deutsche Bank: Okay. And then just sticking on Grocery, the run up in port prices will that impact some of those products that produced now for the winter? Would that kind of have a lag in the Grocery segment in terms of profitability later on in the calendar year?

It’s – margins as we produce products today are being squeezed somewhat on the pork-based products, SPAM and Bacon Bits, for example. We think we have got strong enough volume momentum in those areas that we are still going to be in good shape to deliver a strong quarter though for overall Grocery Products and of course we have a lot of items within Grocery that are not affected by pork cost. Christina McGlone – Deutsche Bank: Okay. And then, Jody, last question, on the CapEx, how much of the Iowa plant is – how much of that expenditure is in ’08 versus ’09?

The majority of it’s going to be in 2009, but we do have some sealing stuff being delivered as we (inaudible) about less than a third 25 million. Christina McGlone – Deutsche Bank: Okay. And with your reduction in CapEx shall we consider that just a shift or an overall reduction?

It’s more of a shift. Christina McGlone – Deutsche Bank: Okay, thank you.

Thank you. Your next question comes from the line of Diane Geissler with Merrill Lynch. Please go ahead. Diane Geissler – Merrill Lynch: Good morning.

Hi Diane.

Good morning. Diane Geissler – Merrill Lynch: Hi. I have a question on the advertising. I think you said that it was 1.5% of sales. Will that be down on a year-over-year basis then versus--?

On a percentage basis it probably is. In total dollars our expectation is going to be up. I mean when you factor in the various price increases going on in certain segments that we had – we weren’t pricing up our advertising expenditure to match the price increases. And so that would distort that number. Diane Geissler – Merrill Lynch: Okay. Because I have it down on an absolute basis in the third quarter and I remember from the last quarter you talked about some marketing initiatives you had around the complete swine and I just wondered was there a shift in the spend between the third quarter and fourth quarter or have you curtailed the advertising behind that pending rollout of the new plant next year or -- could you help me out there?

I am showing that advertising expenses are up year-over-year on an absolute dollar basis. Diane Geissler – Merrill Lynch: On an absolute basis.

Yeah, yeah. Diane Geissler – Merrill Lynch: On an absolute basis. Okay. Perfect.

It is down on a percentage because as Jeff had indicated as we take sales price increases we have kind of already planned our advertising for the year. So-- Diane Geissler – Merrill Lynch: Sure.

We do have several brand being full featured in advertising both in Q3 and Q4. We have a Hormel program that features Compleats, the Refrigerated entrees, the Natural Choice. We have a very successful SPAM campaign. We have had the first Dinty Moore campaign in several years. And so – and we have a Chi-Chi's campaign going on right now. Diane Geissler – Merrill Lynch: Okay. Terrific. And then on the – on -- just to get back on the Turkey segment, the fourth quarter is usually your largest quarter given the seasonality I guess between the first quarter and the fourth quarter. Those are generally your larger quarters. Can you just – you know it sounds like a lot of what’s going on with the Jennie-O would be on the either the deli side or the breast meat side. Can you talk a little bit about the wholebird? Obviously that’s sold in early with the run up in cost can you give us some help there?

Sure. Yeah, there are situations with the wholebirds where we are not achieving full margin recovery both in terms of pre-booking and cost and just in terms of the – even though some of the values are at a high quoted level. I mean the cost have gone up significantly. I mean I guess the best picture I can give you overall is that we are – our expectation in terms of the – you are right about quarter-to-quarter in terms of total dollar delivery. Our fourth quarter will be significantly higher than the third but on a year-over-year basis we are looking at the same kind of 50% decline potentially on a year-over-year basis in Jennie-O Turkey Store, but that is built into our annual – new annual guidance range that we provided. Diane Geissler – Merrill Lynch: Okay. Terrific. Thank you.

Thank you. Next question comes from the line of Jonathan Feeney with Wachovia Securities. Please go ahead. Jonathan Feeney – Wachovia Securities: Good morning. thank you.

Hi John. Jonathan Feeney – Wachovia Securities: Hi Jeff. I wanted to dig into your Refrigerated Foods segment, let’s think you had a mix shift out at Foodservice, is that just related to what’s going on in the macro environment and is there a margin shift in when Foodservice grows or contracts while the rest of the business grows?

Let’s answer the second question first; it’s really not a significant margin shift. I think we have talked in the past where it is sometimes focusing – the Foodservice sales are on an inferior sale to the grocery sales and we have always given the focus we have placed on Foodservice, our expectations are really quite similar in terms of returns from both segments. So, that one in and of itself causes a shift. We clearly are seeing some effects in terms of the economy within the Foodservice segment, the casual dining aspect that I sighted in my earlier comments would be one area where we have enjoyed sales in the past where you can definitely see some softness in some of the customers we are selling to. We have seen some offset in the non-commercial side of the Foodservice business. The institutional feed providers are seeing actually increases in business because they are kind of an efficient way of delivering meals to folks and we do a good job in selling into that segment. Jonathan Feeney – Wachovia Securities: Thinking back over the past couple of years, I remember Café H was a big push for you guys and you had a lot of success getting products on menus, have you sort of ramped back your investment again in Foodservice given a tougher environment?

Not at all. I think those kind of innovative solution based items are still doing well. Café H was a single-digit gainer during the quarter, Austin Blues was always a double-digit gainer, we continued to do all of our Bread Ready franchise. Where you are seeing a little more of the softness would be in kind of more of the traditional products, the bacon, ham and so forth where there is an element of competition and an element of consumers potentially just not frequenting some of those establishments is much where those items are sold. Jonathan Feeney – Wachovia Securities: Great. I know it’s a regular question for you folks but Jody is there any update about – clearly there is a high cash retention rate here and a very strong balance sheet, I mean is the primary use of cash here your acquisitions still or has anything changed about your outlook there?

Our focus still remains on investing in our businesses and certainly we are doing that in a big way with the initiative on the new plants. We also continue to look at acquisitions and we are only able to get a small one done this quarter. Then we will look at returning to shareholders and we had some more progress on our share repurchase and we continued to pay out the nice dividends. Jonathan Feeney – Wachovia Securities: Could you clarify Jody the constraints on your ability to repurchase shares, there is some limitations, could you just refresh my memory about that, about the foundation or something?

Right now, I have a 10 million share authorization approved by our board of directors of which I have about 2.6 million shares left and that is my constraint right now. Jonathan Feeney – Wachovia Securities: Okay, thank you.

Thanks John.

Thank you and our next question comes from the line of Robert Moskow of Credit Suisse. Please go ahead. Robert Moskow – Credit Suisse: Hi, thank you. Just kind of a broader question, one of the competitive strengths I have also attributed to Hormel is your value-added capabilities in Refrigerated. Have you seen any kind of cash up from your competition on what they are doing in value added and whether they are getting more adept or do you think that there is still a big gap there in what you could do? Then secondly, I remember at your Analysts’ Day there was an interesting Foodservice initiative you had in the DELI counter, I think you were branding some DELIs at a major customer under the DiLUSSO name, can you tell us how that tested and whether it could be expanded? Thanks.

Okay. On the first question in terms of our value-added capabilities, we have really always looked at frankly the competitive setting being sort of in two categories. I mean there are other players that are sort of full protein companies like we have that element of our portfolio, those are some of the companies that have been working to migrate more into some of the value-added categories and they have had certainly some areas where they have been successful in doing that and some areas where it has been more of a challenge for them. The second area of competitors would be the ones that really are focused almost solely on those kind of items, the Sara Lees, the Oscar Meyers, the Boar’s Heads and (inaudible) folks in the marketplace in various categories on a regular basis as well. We are having good success in creating innovative items that build over time. We are enjoying excellent top line growth in our protein-based businesses and so we are confident that we are more than holding our own against both sets of competitors. In terms of DiLUSSO DELI company, that has been very successful for us. We continue to find new customers and new regions of the country to bring that program and even within some of the existing customers we have been able to partner with them to broaden the portfolio and going to sandwiches and salads and other types of items utilizing that brand. So, we do consider that to be a good growth franchise for us. Robert Moskow – Credit Suisse: What percent of your sales do you think in Foodservice gets sold under that kind of format, is it big or small, is it a $100 million idea or how big of an idea is it?

It’s under $100 million now but it is gaining some scale. Although we don’t break out separate sales numbers for the units underneath Refrigerated, I just wanted to clarify though, we don’t count that as a Foodservice sale, we count that as a DELI sale since it goes through the grocery channel and the grocery sales for us, so it would technically be part of our meat products group is where we would reference it. Robert Moskow – Credit Suisse: Okay. Thank you very much.

It is a hybrid kind of product line we recognize. Robert Moskow – Credit Suisse: Right.

Thank you. Our next question comes from the line of Tim Ramey with D. A. Davidson & Co. Please go ahead. Tim Ramey – D.A. Davidson & Co.: Good morning. Jeff, I think you were running the turkey business in the last margin downturn and pulled it out of that, and my memory is failing but I think that was occurring about concurrent with the acquisition of Jennie-O Turkey Store or maybe a little bit after it, how should we think about the margins in kind of the traditional fresh product versus the value-added product, clearly you were losing money in the fresh product piece of the business this quarter and should in the next quarter as well, but how does that relate to kind of how the business felt before the Turkey Store acquisition?

Okay Tim, I certainly remember it well. We made the acquisition of the Turkey Store in 2001 and the real downturn year was 2003, that was when the various export markets kind of dried up in terms of being a source for meat sales to not align the turkey industry but buy even more significantly the chicken and we ended up with breast meat at $1.13 for that summer as the peak price. So, it wasn’t exactly concurrent with it but it was fairly soon after the acquisition. What we feel we have done over time is migrate the overall performance of the business upward by attaining efficiencies between the Minnesota-based operations at Jennie-O and the Wisconsin-based operations at the Turkey Store by combining the brand and the two by being able to better utilize meat between the system, but as we are seeing today, the business still does have some susceptibility to cyclicality in terms of macro conditions. I think we have talked in terms of kind of normal earnings expectations for Jennie-O Turkey Store being maybe in the 8% to 9% range but looking at historical results, we probably still are in a mode where our low is probably 5% and our high is over 12% like we did a couple of years ago, and so we’ll continue to work on value adding more and more to that portfolio and trying to take some of that volatility out but for night now, obviously their focus is on honing in on those types of items and then getting the best return they can on the commodity-based items. Tim Ramey – D.A. Davidson & Co.: How is the export market behaving there with exports of protein and general fairly strong, are you starting to see anything in the Turkey business as well for exports?

It is mixed. Markets have been fairly solid for the dark meat side of the business that tends to be the component that the export markets are more interested in. They are not much up on breast meat. That really just doesn’t interest in that type of raw material, it doesn’t go into the products well that they intend to make and historically or even with somewhat higher prices of dark meat (inaudible) is a little over a $1 and if your breast meat is reconsidered depressed at $1.70, what they are looking at it is the one raw material is still better valued than the breast meat and our consumers are really aren’t looking for that. So, it is a mixed result in terms of the operating performance for Jennie-O. Tim Ramey – D.A. Davidson & Co.: Terrific. Thanks.

Thank you. Your next question comes from the line of Ann Gurkin with Davenport and Company. Please go ahead. Ann Gurkin – Davenport & Company: Good morning.

Hi Ann. Ann Gurkin – Davenport & Company: Just wondering is there a little more discussion on pricing given the production cost of Turkey and the tightening pork market, is there momentum building at retail for higher prices for products or is that still lagging?

We’ve certainly have been taking pricing in a lot of different segments of our business not just the retail but within the Foodservice component of the business as well. We have to weigh in each case what type of products they are within some of the Foodservice and DELI areas you have a little bit longer contract commitment sometimes. We have been obviously in recent times not putting out such long commitments but it has historically more of a pattern in that area of the business and all retailers are obviously quite highly interested giving the best value proposition they can to their consumers and we certainly are interested in that as well, but as everyone recognizes when you start seeing raw material cost run up in 5%, 10% and 15% range in some cases, the pricing has to follow and so overall in the value-added areas of our business, we have been tracking reasonably well with that. Ann Gurkin – Davenport & Company: But commodities still seem to be lagging?

Certainly on the turkey side it has. Ann Gurkin – Davenport & Company: Turkey side, okay great. Are you looking at any additional pricing in your grocery product segment over the next six months?

Yes. We have some within certain branded items. We have already announced some to the trade there. We have also announced some on the branded meat product side and within the Refrigerated foods that are sold to the retail trade. So, we’ll continue to look at those as we need to. Ann Gurkin – Davenport & Company: Okay, that’s great. Thank you.

Thank you. (Operator instructions) Our next question comes from the line of Chris Pritzel [ph] with Lehman Brothers. Please go ahead. Chris Pritzel – Lehman Brothers: Good morning.

Hi Chris. Chris Pritzel – Lehman Brothers: Hi there, just a clarification on Turkey. It sounds like that you are kind of anticipating a turn maybe in the cycle in thinking spring could be that time frame but I guess I am just wondering if that is based on what you are seeing in profitability in the industry right now and anticipating that it is just not sustainable at these levels or if it is based on actual actions that you are seeing taking place today, I know – I think Smithfield had blasted that they were thinking about pork reductions in (inaudible) but actually haven’t committed to it so I am just curious if it is based on what you are actually seeing or just more on what you are anticipating?

It starts with the anticipation based on the economic realities that everyone is facing within the poultry side of the business. We certainly tried to get as much information as we can from neutral sources within the industry as to what they hear going on out there and we have some indications based on that but there are indeed others that would be following the pattern of looking to tighten up their production. In terms of the published egg numbers, we have seen now a couple of weeks in a row some down numbers there which would support the notion of it tightening up. So, it is a little bit of a combination Chris. Chris Pritzel – Lehman Brothers: Okay. Just thinking about some of our new products like COMPLEATS and if you can just give me maybe an update on where we are at in terms of ACV distribution nationally and also how high do you think you can get on national ACV on COMPLEATS?

For COMPLEATS, the ACV is quite high and really there the continued growth is going to come from acceleration of the sales rates of the items in the store and potentially not having bigger and bigger sections. We certainly saw quantum leads kind of within the last 12 to 18 months between the typical set and a lot of the retailers in the United States have COMPLEATS that were just a handful of items to now many of them carrying double digits worth of SKUs on the line. We also rolled out our four what we call our green label items, our more health oriented offerings within that segment and those have gotten good exceptions there. The ACV rate there is in the 60% to 70% range and is enjoying good sales success. So, we think there is a lot of run rate left and we certainly think we have put our money where our mouth is with our $90 million investment in the plant (inaudible) open till November of 2009 but we feel will definitely be warranted based on what we expect from the category. Chris Pritzel – Lehman Brothers: So, the run rate kind of where you still see you are ahead maybe has more to do with line extension and kind of faster turns in the category rather than just kind of ACV itself.

Yes. There are a lot of retailers that would be very interested in driving meal solution areas within the stores that would equate to those you see in frozen. You look at the kind of shelf space that is in the frozen case, it will by the way cost the retailer a lot more to maintain on energy and everything else that we think that we are ultimately going to be able to drive much larger meal-based sections within the dry good section than what you see today. Chris Pritzel – Lehman Brothers: Have you been surprised by acceptance in maybe a channel that you hadn’t anticipated on that or is it pretty much kind of more grocery oriented and you think that is kind of where it stays?

Without implying that these are big numbers, we have seen some acceptance within the convenience storage channels which I don’t [ph] think that fits that channel as well and then our Foodservice team has had some success on an account-by-account basis with some hotel chains and when you arrive at the hotel at 9 o’clock and it is not a hotel with a restaurant and you would rather have something other than microwaved popcorn to it, these are really excellent options for them to be able to provide their patrons and so we are looking at some growth there as well. Chris Pritzel – Lehman Brothers: Then switching gears just to the hog, the hog cost situation, are you still -- I think you had mentioned that you were seeing self slaughter facilities at one point running at full utilization levels and I am curious if you are still seeing that taking place in the industry?

I think the industry has slowed down a little bit with the grain crisis coming down and the future prices looking quite favorable. The producers are back in the black, so we have seen that slowdown and we are still expecting that there will be a 9% increase in hogs that will have come to market in 2008. Chris Pritzel – Lehman Brothers: Okay and that 58 to 62 per 100 (inaudible) I think it was the range that you provided for ’09, is that a level that allows the hog production industry to get back to a more normalized profit levels or is there kind of another leg up from there?

I have not looked at it in terms of what the producer would get. A lot depends on where the grain prices go, I would expect that that should still provide them a level of profitability. Chris Pritzel – Lehman Brothers: Then my last question is just more around what the right way to think about your use of balance sheet flexibility would be, it seems like you are taking a pretty measured and balanced approach to it, but if I think about sort of from an EPS growth trajectory standpoint, you have noted a number of head wins you have got coming up and in a lot of ways it seems like you kind of control your own destiny when it comes to EPS growth because of the balance sheet flexibility that you have, I am just not sure that is the way you approach the use of your balance sheet though. So, I would be curious if you do kind of looked at EPS growth in kind of providing an outlook kind of more consistent with the long term 10% EPS growth range and how your balance sheet could help you do that.

I think our balance sheet definitely will help us do that as we make investments both on the acquisition side or further expansion of the businesses we already have, and as we talked, we certainly would like to have more leverage down the balance sheet which we need to get that there by those investment modes.

I guess I would just add to that, we are not looking for quick hits, we are not looking to just pick up a business to kind of jab short-term results if we don’t think that is a franchise that we are adding value to and it has significant growth opportunities itself. And then I guess secondly on just the cash side, we don’t intend to sit on large quantities of cash for a long time. As years ebb and flow and as our repurchase and other acquisition activities ebbs and flows, the cash number may go up and down somewhat but we recognize we are not doing the shareholder any favors if we have large amounts of cash for too long a time. Chris Pritzel – Lehman Brothers: Great. Very helpful, thank you.

Thank you. There are no further questions, Mr. Jones I will turn it back to you for closing comments.

Thank you. We appreciate all of you participating in this conference call today and thanks for joining us. So, that’s the end of the call.

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