also limit the Company’s ability to benefit from market gains  if commodity prices become more favorable than those that  have been secured under the Company’s hedging programs. Additionally, if a high pathogenic disease outbreak developed  in the United States, it may negatively impact the national  economy, demand for Company products, and/or the  Company’s workforce availability, and the Company’s financial  results could suffer. The Company has developed contin- gency plans to address infectious disease scenarios and the  potential impact on its operations, and will continue to update  these plans as necessary. There can be no assurance given,  however, that these plans will be effective in eliminating the  negative effects of any such diseases on the Company’s oper- ating results. Fluctuations in commodity prices of pork, poultry, feed  grains, avocados, peanuts, energy, and whey could harm the  Company’s earnings.  The Company’s results of operations  and financial condition are largely dependent upon the cost  and supply of pork, poultry, feed grains, avocados, peanuts,  and whey as well as energy costs and the selling prices for  many of our products, which are determined by constantly  changing market forces of supply and demand. The live hog industry has evolved to very large, vertically  integrated operations operating under long-term supply  agreements. This has resulted in fewer hogs being available  on the cash spot market. Additionally, overall hog production  in the U.S. has declined. The decrease in the supply of hogs  could diminish the utilization of harvest and production facil- ities and increase the cost of the raw materials they produce.  Consequently, the Company uses long-term supply contracts  based on market-based formulas or the cost of production  to ensure a stable supply of raw materials while minimizing  extreme fluctuations in costs over the long term. This may  result, in the short term, in costs for live hogs that are higher  than the cash spot market depending on the relationship of  the cash spot market to contract prices. Market-based pricing  on certain product lines, and lead time required to implement  pricing adjustments, may prevent all or part of these cost  increases from being recovered, and these higher costs could  adversely affect our short-term financial results. Jennie-O Turkey Store raises turkeys and also contracts with  turkey growers to meet its raw material requirements for  whole birds and processed turkey products. Additionally, the  Company owns various hog raising facilities that supplement  its supply of raw materials. Results in these operations are  affected by the cost and supply of feed grains, which fluctuate  due to climate conditions, production forecasts, and supply  and demand conditions at local, regional, national, and  worldwide levels. The Company attempts to manage some  of its short-term exposure to fluctuations in feed prices by  forward buying, using futures contracts, and pursuing pricing  advances. However, these strategies may not be adequate to  The Company’s operations are subject to the general risks  associated with acquisitions.  The Company has made several  acquisitions in recent years, most recently the acquisition of  CytoSport Holdings, Inc., and regularly reviews opportunities  for strategic growth through acquisitions. Potential risks  associated with acquisitions include the inability to integrate  new operations successfully, the diversion of management’s  attention from other business concerns, the potential loss of  Demand for the Company’s products is also affected by  competitors’ promotional spending, the effectiveness of the  Company’s advertising and marketing programs, and con- sumer perceptions. The Company may be unable to compete  successfully on any or all of these bases in the future. The Company is subject to risks associated with the outbreak  of disease in pork and beef livestock and poultry flocks,  including Bovine Spongiform Encephalopathy (BSE), pneu- mo-virus, Porcine Circovirus 2 (PCV2), Porcine Reproduction  & Respiratory Syndrome (PRRS), Foot-and-Mouth Disease  (FMD), Porcine Epidemic Diarrhea Virus (PEDv), and Avian  Influenza. The outbreak of disease could adversely affect the  Company’s supply of raw materials, increase the cost of pro- duction, reduce utilization of the Company’s harvest facilities,  and reduce operating margins. Additionally, the outbreak of  disease may hinder the Company’s ability to market and sell  products both domestically and internationally. Most recently,  PEDv has impacted the Company’s internal farm operations  and several of the Company’s independent hog suppliers. The  spread of PEDv in the industry continues to be a concern and  reduced the number of hogs through the Company’s harvest  facilities in the third quarter of the year. The Company has  developed business continuity plans for various disease sce- narios and will continue to update these plans as necessary.  There can be no assurance given, however, that these plans  will be effective in eliminating the negative effects of any such  diseases on the Company’s operating results. International trade barriers and other restrictions could result  in less foreign demand and increased domestic supply of pro- teins which could lower prices. overcome sustained increases in market prices due to alter- nate uses for feed grains or other changes in these market  conditions. • price; • product quality and attributes; • brand identification; • breadth of product line; and • customer service. 28 Market demand for the Company’s products may fluctuate.  The Company faces competition from producers of alternative  meats and protein sources, including pork, beef, turkey,  chicken, fish, peanut butter, and whey. The bases on which the  Company competes include: Outbreaks of disease among livestock and poultry flocks  could harm the Company’s revenues and operating margins. 