WHEREAS:  The World Health Organization (WHO) deems antibiotic resistance one of the top 10 global health threats of 2019.[i] Antibiotic resistance renders life-saving drugs useless; by 2050, the phenomenon could cause an estimated 300 million premature deaths and up to $100 trillion in global economic damage.[ii]

A major contributor to antibiotic resistance in humans is the misuse and overuse of medically important antibiotics in meat and poultry production. Over 70 percent of medically important antibiotics in the U.S. are sold for use in animal agriculture. Rather than being used only to treat sick animals, these drugs are often deployed for routine uses, such as to prevent disease in crowded, unsanitary farm conditions. When antibiotics are administered to healthy animals, bacteria can adapt and spread to humans.

Recognizing these risks, the FAIRR initiative's $5 trillion investor network has called on the food companies to minimize the use of medically important antibiotics in global livestock supply chains.

According to Hormel’s 2018 10-K, turkey and pork are the major raw materials for its products. On average, turkey and pork are also the two most antibiotic intensive animal proteins (on a milligram of antibiotic per kilogram of livestock basis) in the United States.[iii]

One of the four pillars of Hormel’s Antibiotic Stewardship program is “reducing the use of antibiotics”, including a claim of reductions in antibiotic use, but Hormel does not currently report quantitative data to demonstrate progress on this pillar to shareholders.[iv] This lack of transparency represents a significant gap for investors concerned about the business risks posed by antibiotic misuse corporate supply chains.  

Our company recently faced a lawsuit arguing that the “natural” label on products misleads consumers to believe the animals have been raised without the use of antibiotics, and internal court documents revealed that the animals raised for Hormel’s “Natural Choice” products are raised no differently than those for the Spam brand.[v]

Smithfield Foods, Inc., which has received significant pushback for its animal welfare practices, reports annually on antibiotic use within its supply chain. Smithfield reports a reduction in total antibiotic use by nearly fifty percent since 2013.[vi]

To demonstrate to shareholders that the Company is adequately addressing the risks associated with the use of medically important antibiotics in its supply chain, it is vital that Hormel increase its disclosures to shareholders. 

RESOLVED:  Shareholders request that Hormel report annually, at reasonable expense and omitting proprietary information, providing quantitative metrics tracking any measurable progress toward the reduction of medically important antibiotic use in the Company’s supply chain. 

SUPPORTING STATEMENT:  Although we defer to management for the precise contents, investors believe that meaningful disclosure within the report could include: 

• Metrics tracking the class of antibiotic used, the purpose for its use, and the quantity administered for different categories of protein sources (swine, turkey, etc.)   
• As assessment of alternative production practices utilized to enable the reduction in medically important antibiotic use

[i] https://www.who.int/emergencies/ten-threats-to-global-health-in-2019

[ii] https://amr-review.org/  

[iii] https://www.nrdc.org/experts/david-wallinga-md/analysis-high-intensity-antibiotics-us-beef-pork

[iv] https://www.hormelfoods.com/responsibility/animal-care/raising-our-animals/

[v] https://www.law.com/2019/04/12/hormel-lawsuit-exposes-the-beef-over-natural-labeling/?slreturn=20190403165224

[vi] https://www.smithfieldfoods.com/integrated-report/2017/animal-care/antibiotics-use