Experts: Processed Meat/Cancer Link No Concern For Investors - Sysco (NYSE:SYY), Hormel Foods (NYSE:HRL)

A pair of experts are downplaying the impact of the WHO study linking processed meats to cancer.

According to Angie Setzer, the true problem lies with the processing chemicals, not the meat.

She predicts that consumers are unlikely to change their behavior as a result of the study.

The World Health Organization (WHO) has released a new study that backs up previous data linking consumption of processed meats with cancer.

While millions of meat consumers could be affected by the study, experts are downplaying the potential impact the news will have on meat processors themselves.

Risk Versus Reward

According to MaxYield Cooperative analyst, Karl Setzer, consumers must remember the benefits of meat consumption as well. “What needs to be considered is the risk of cancer versus the benefits red meat provides: protein, minerals, vitamins, etc.,” Setzer told Benzinga. “Even the WHO claims the risk from developing cancer from eating red meat is low.”

It’s Not The Meat

When Benzinga asked Angie Setzer, vice president of Grain for Citizens, about the impact that this study will have on the meat industry, she said that consumers shouldn’t be too quick to judge the meat itself. “To me, I feel this is somewhat of a non-issue for the livestock suppliers themselves, considering the higher incidence of cancer is more directly correlated with the chemicals associated with processing the meat rather than the meat itself,” she explained.

A. Setzer went on to praise companies that are already producing meat products that are free of these types of chemicals. “Those companies are a step ahead of their competition and have been prepared for something like this to come down the pipe.”

Outlook

In the long term, A. Setzer believes that this story will have an insignificant lasting impact on the livestock industry. “I think once we get past the initial shock of the report, people will move on and the markets impacted will correct.”

In terms of consumer behavior, she predicts very little change. “In all honesty, I feel most consumers have known processed meats are and have been unhealthy but still choose to purchase and eat them as taste and habits in many occasions will trump health,” she concluded.

The WHO study is, in fact, not the first study that has found a link between processed meats and cancer. A 1994 study found a link between hot dogs and leukemia, and a 2009 study linked leukemia to a range of processed meats.

Shares of meat producers Tyson Foods, Inc. TSN, SYSCO Corporation SYY and Hormel Foods Corp HRL are all trading down in Monday’s session.

Disclosure: The author holds no position in the stocks mentioned.

Image Credit: Public Domain

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