St. Louis, Missouri-based Post Holdings, best known for its Honey Bunches of Oats and Raisin Bran cereals, is in the process of assessing the financial impact of this latest news, according to a press release issued on Wednesday.
The uncertainty of its current expectations was touched on in a statement released by the company on May 14 when the cereal maker said the avian flu constituted a “force majeure event” for its Michael Foods egg business. Declaring a force majeure event means the company can pull out of contractual obligations due to unpredictable events beyond their control.
In its statement earlier this month, the company said two of its chicken flocks had tested positive for the avian flu, affecting 25 percent of egg commitments. The news impacts on Michael Foods, which Post Holdings acquired in June 2014. Michael foods accounted for about 28 percent of Post Holdings’ sales in the fiscal year ending September 2014.
Michael Foods, a leading producer of value-added food products and service solutions available to food-service, retail and food ingredient channels, is taking a number of measures to ease the financial impact of the avian flu, including discontinuing some product lines and the implementation of “appropriate pricing actions,” Post said on Wednesday, according to Fox News.
Avian flu has been confirmed in 16 U.S. states and Canada and has devastated Midwestern egg producers and poultry farmers. So far, over 40 million birds have been destroyed as a result of the virus. Shares in Post’s stocks were down 1.2 percent Wednesday, closing at $45.48 on the NYSE.
