HORMEL FOODS CORP /DE/, 10-K, 1999-01-29

HORMEL FOODS CORP /DE/
10-K, 1999-01-29
MEAT PACKING PLANTS

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended October 31, 1998, Commission File No. 1-2402

HORMEL FOODS CORPORATION
(Exact name of registrant as specified in its charter)

Delaware 41-0319970
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)

1 Hormel Place AUSTIN, MINNESOTA 55912-3680
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (507) 437-5611 Securities
registered pursuant to Section 12 (b) of the Act:

COMMON STOCK, PAR VALUE $.1172 PER SHARE NEW YORK STOCK EXCHANGE
TITLE OF EACH CLASS Name of Each Exchange
on Which Registered

Securities registered pursuant to Section 12 (g) of the Act:

NONE
(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days. Yes X No

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendments to this Form 10-K. ( )

The aggregate market value of the voting stock held by non-affiliates of the
Corporation at December 2, 1998, was $1,296,307,733 based on the closing

price of $30.9375 per share. As of December 2, 1998, the number of shares
outstanding of each of the Corporation's classes of common stock was as
follows:

Common Stock, $.1172 Par Value--73,426,446 shares
Common Stock Non-Voting, $.01 Par Value--0 shares

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Stockholders' Report for the year ended October 31,
1998, are incorporated by reference into Part I and Part II Items 5-9, and
included as a separate section in the electronic filing to the SEC.

Portions of the proxy statement for the Annual Meeting of the Stockholders
to be held January 26, 1999, are incorporated by reference into Part III,
Items 10-13 and included as a separate section in the electronic filing to
the SEC.

-1-
<PAGE>

PART I

Item 1. BUSINESS

(a) General Development of Business
-------------------------------

Hormel Foods Corporation, a Delaware corporation, was founded by George A.
Hormel in 1891 in Austin, Minnesota as George A. Hormel & Company. The
Company started as a processor of meat and food products and continues in
this line of business. The Company name was changed to Hormel Foods
Corporation on January 31, 1995. The Company is primarily engaged in the
production of a variety of meat and food products and the marketing of
those products throughout the United States. Although pork remains the
major raw material for Hormel products, the Company has emphasized for
several years the manufacture and distribution of branded, consumer
packaged items rather than the commodity fresh meat business. New product
introductions the past few years have emphasized a variety of branded
turkey products produced and sold under the Jennie-O label, the fast
growing ethnic food market with Chi-Chi's line of Mexican foods, House of
Tsang oriental sauces and food products, and Mediterranean food products
under the Marrakesh Express and Peloponnese labels.

In 1996, the Company purchased Stagg Foods, Inc., a leading West Coast
producer of chili and stew products through an exchange of stock. Stagg
Foods is operated as part of the main Hormel business.

The Company's larger subsidiaries include Jennie-O Foods, Inc., Hormel
Foods International Corporation and Vista International Packaging, Inc.

Jennie-O, a Minnesota based turkey processor, markets its products
nationwide through its own sales force and brokers, providing the Company
with a significant presence in this important category of the industry.

The Company markets its products internationally through Hormel Foods
International Corporation. Hormel Foods International has been increasing
its presence in the international marketplace through joint ventures and
placement of personnel in strategic foreign locations. Significant joint
ventures have been established in Mexico, China, and Australia. Investment
of personnel and capital in foreign operations is expected to continue for
the foreseeable future. Minority investments in food companies in Spain
and the Philippines have resulted in an increased Hormel presence in those
areas.

Vista International Packaging, Inc., imports, customizes and distributes
a variety of natural and artificial casings for the meat and food
processing industry.

During fiscal 1998, the Company sold its bulk gelatin/specialized protein
plant and business in Davenport, Iowa, to Goodman Fielder Limited of
Sydney, Australia.

-2-
<PAGE>

Item 1. BUSINESS-Continued

(a) General Development of Business-Continued
-----------------------------------------

The Company has not been involved in any bankruptcy, receivership or
similar proceedings during its history. Substantially all of the assets of
the Company have been acquired in the ordinary course of business.

The Company had no significant change in the type of products produced or
services rendered, nor in the markets or methods of distribution since the
beginning of the fiscal year.

(b) Industry Segment
----------------

Hormel Foods Corporation is engaged in a single industry segment "Meat and
Food Processing". The meat and food processing industry is very
competitive with respect to price, marketing and customer service. In
addition to meat processing firms, the Company competes with consumer
packaged food manufacturers as well as seafood, poultry and vegetable
protein processors.

The principal products of the Company are meat and food products which are
sold fresh, frozen, cured, smoked, cooked and canned.

The percentage of total revenues contributed by classes of similar
products for the last three fiscal years of the Company are as follows:

Year Ended
October 31, 1998 October 25, 1997 October 26, 1996
---------------- ---------------- ----------------
Meat Products 50.8% 54.1% 52.6%
Prepared Foods 28.4 26.5 28.1
Poultry, Other 20.8 19.4 19.3
----- ---- ----
100.0% 100.0% 100.0%
====== ====== ======

Meat Products includes fresh meats, sausages, hams, wieners and bacon.
Prepared Foods products include canned luncheon meats, shelf stable
microwaveable entrees, stews, chilies, hash, meat spreads and frozen
processed products. Jennie-O turkey products are included in the Poultry,
and Other category.

There are numerous trademarks and patents which are important to the Com-
pany's business. Some of the trademarks are registered and some are not.
In recognition of the importance of these assets, the Company during 1998
created a subsidiary, Hormel Foods LLC, to create, own, maintain and
protect trademarks and patents. Some of the more significant trademarks
owned or licensed are: HORMEL, ALWAYS TENDER, AMERICAN CLASSICS, BLACK
LABEL, CHI-CHI'S, CURE 81, CUREMASTER, DI LUSSO, DINTY MOORE, DUBUQUE,
FAST `N EASY, HERB-OX, HOMELAND, HOUSE OF TSANG, JENNIE-O, KID'S KITCHEN,
LAYOUT, LITTLE SIZZLERS, MARRAKESH EXPRESS, MARY KITCHEN, OLD SMOKEHOUSE,
PATAK'S, PELOPONNESE, PILLOW PACK, QUICK MEAL, RANGE BRAND, ROSA GRANDE,
SANDWICH MAKER, SPAM, STAGG, THICK & EASY, and WRANGLERS. The Company
holds 14 foreign and 17 U. S. patents.

-3-
<PAGE>

Item 1. BUSINESS-Continued

The Company for the past several years has been concentrating on
processed, consumer branded products with year round demand to minimize
the seasonal variation experienced with commodity type products. Pork
continues to be the primary raw material for Company products. Although
live pork producers are moving toward larger, more efficient year-round
confinement operations, there is still a seasonal variation in the supply
of fresh pork materials. The expanding line of processed items has reduced
but not eliminated the sensitivity of Company results to raw material
supply and price fluctuations.

The Company has various lines of credit with a maximum available
commitment of $27,200,000. On October 31, 1998, unused lines of credit
were $16,700,000. A fee is paid for the availability of fixed credit
lines. Long-term debt consists of unsecured notes for $110,000,000
maturing October 15, 2002, and October 15, 2006; and $59,222,000 of
medium-term unsecured notes used to purchase a 21.4 percent equity
interest in Campofrio Alimentacion, S.A. (Campofrio), Madrid, Spain. The
notes denominated in Spanish Pesetas provide a hedge against currency
fluctuations on the investment in Campofrio. Other long-term debt includes
$5,700,000 in small issue Industrial Revenue Bonds of varying maturities;
$8,528,000 of promissory notes through 2008 secured by limited partnership
interests in the Federal Affordable Housing Program; $16,106,000 in
medium-term notes with variable rates, principal and interest due annually
through 2005 secured by various equipment in our China operations; and
$10,551,000 in variable rate revolving credit debt.

Financial resources and anticipated funds from operations are considered
adequate to meet normal operating cash requirements in 1999.

The Company has no customers the loss of which would have a significant
effect on the Company's business. During fiscal year 1998, no customer
accounted for more than 6.0% of sales. Backlog orders are not significant
due to the perishable nature of a large portion of the products and orders
are accepted and shipped on a current basis.

The Company continues to develop and introduce new products each year. No
new product in 1998 required a material investment of Company assets.
Research and development expenditures for fiscal 1998, 1997 and 1996,
respectively, were $9,037,000, $8,580,000, and $8,022,000. There are 29
professional employees engaged in full time research; 18 in the area of
improving existing products and 11 in developing new products.

As of October 31, 1998, the Company had over 11,200 active employees.

Livestock slaughtered by the Company is purchased by Company buyers,
commission dealers, sale barns, and terminal markets or under long-term
supply contracts at locations principally in Minnesota, Iowa, Nebraska,
Colorado and South Dakota. The level of pork production in the United
States has an impact on Hormel's raw material cost as well as facility
utilization. The live pork industry has been rapidly moving to very large,
vertically integrated, year-round confinement operations.

-4-
<PAGE>

Item 1. BUSINESS-Continued

During 1998, hog producers brought the largest supply of live hogs to
market in history. This huge supply of hogs has produced near-record,
low-market prices for live hogs on the spot cash market. A significant
portion of the resulting positive effect of lower raw material prices on
Company margins was offset by long-term supply agreements designed to buy
hogs through purchasing contracts rather than the spot cash market. While
the Company's cost for live hogs declined from 1997, it did not reach
levels which would be expected from the spot cash market. Long-term supply
contracts are used by the Company as a means of assuring a stable supply
of raw materials while minimizing extreme fluctuation in costs over the
long-term.

During much of 1998, live market prices were below the floor levels
guaranteed by our contracts. Contract costs have been fully reflected in
the Company's reported financial results. As live hog prices rebound
during the term of these contracts, the Company's cost for hogs will be
less than the spot market to the extent that it exceeds contract prices.

Products are sold under the Hormel label in all 50 states. Hormel products
are sold by approximately 575 Company sales personnel operating in
assigned territories coordinated from district sales offices located in
most of the larger United States cities, and by approximately 450 brokers
and distributors. Distribution of products to customers is by common
carrier.

The Company has plants in Austin, Minnesota; Fremont, Nebraska; and
Rochelle, Illinois that slaughter livestock for processing. The slaughter
facility at Austin is leased to Quality Pork Processors of Dallas, Texas
under a custom slaughter arrangement.

Facilities that produce manufactured items are located in Algona, Iowa;
Austin, Minnesota; Beloit, Wisconsin; Aurora, Illinois; Osceola, Iowa;
Fremont, Nebraska; Knoxville, Iowa; Oklahoma City, Oklahoma; Stockton,
California; Tucker, Georgia; and Wichita, Kansas. Custom manufacturing for
Hormel is performed by several companies including Owatonna Canning
Company, Owatonna, Minnesota; Lakeside Packing Company, Plainview,
Minnesota; and Pierre Foods of Claremont, North Carolina. Power Logistics,
Inc., operates a distribution center for the Company at Osceola, Iowa.

JENNIE-O FOODS
--------------

Jennie-O Foods, Inc., a Willmar, Minnesota, based turkey processor, has
turkey raising, slaughter and processing operations at various locations
within Minnesota. Jennie-O contracts with turkey growers to supplement the
turkeys it raises to meet its raw material requirements for whole birds
and processed turkey products.

-5-
<PAGE>

Item 1. BUSINESS-Continued

HORMEL FOODS INTERNATIONAL
--------------------------

Hormel Foods International Corporation markets the Company's products in
international areas including the Philippines, Japan and various European
countries. The Company, through Hormel Foods International, has licensed
companies to manufacture SPAM luncheon meat overseas on a royalty basis;
principally, Tulip International in Denmark. Hormel Foods International
owns Hormel FSC, Inc., a foreign sales corporation, which engages in
export related activities.

Hormel Foods International has offices in England and China to increase
sales and marketing support in the international marketplace. During 1997,
a minority investment was made in Campofrio Alimentacion, S.A.,Madrid,
Spain. Joint ventures have been established in Mexico, China and
Australia.

VISTA INTERNATIONAL PACKAGING
-----------------------------

Vista International Packaging, Inc., is a food packaging company located
in Kenosha, Wisconsin, which imports, customizes and distributes a variety
of natural and artificial casings for the meat and food processing
industry.

-6-
<PAGE>

Item 1. BUSINESS-Continued

(d) Executive Officers of the Registrant
------------------------------------

Year
First
Elected
Name Office Age Officer
---- ------ --- -------

Joel W. Johnson Chairman of the Board, 55 1991
President and Chief
Executive Officer

Don J. Hodapp Executive Vice President, 60 1969
and Chief Financial
Officer

Gary J. Ray Executive Vice President 52 1988

Eric A. Brown Group Vice President, 52 1987
Prepared Foods

James W. Cole Group Vice President, 64 1990
Foodservice Group

David N. Dickson Group Vice President, 55 1989
International and
Corporate Development

Stanley E. Kerber Group Vice President, 60 1977
Meat Products

Michael J. McCoy Vice President and 51 1994
Controller

Steven G. Binder Vice President, 41 1998
Foodservice

Mahlon C. Schneider Vice President and 59 1990
General Counsel

Richard A. Bross Vice President, 47 1995
Grocery Products

Forrest D. Dryden Vice President, Research 55 1987
and Development

Ronald W. Fielding Vice President, Hormel 46 1997
and President Hormel
Foods International

Jerry C. Figenskau Vice President, 58 1994
Specialty Products

James A. Jorgenson Vice President, 53 1990
Human Resources

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<PAGE>

Item 1. BUSINESS-Continued

(d) Executive Officers of the Registrant-Continued
----------------------------------------------

Year
First
Elected
Name Office Age Officer
---- ------ --- -------

Gary C. Paxton Vice President, 53 1992
Manufacturing

Kenneth P. Regner Vice President, 61 1989
Engineering

James N. Rieth Vice President, Hormel 58 1981
and President and
Chief Executive Officer
Jennie-O Foods

Robert A. Slavik Vice President, 53 1993
Meat Products Sales

Jeffrey M. Ettinger Treasurer 40 1998

Thomas J. Leake Corporate Secretary 53 1990

No family relationship exists among the executive officers.

All of the above executive officers have been employed by the Registrant
in an officer capacity for more than the past five years except Mr.
Richard A. Bross, Director of Grocery Products Marketing until January 3,
1994 when he was named General Manager of Grocery Products, on January 30,
1995 he was elected Vice President, Grocery Products; Mr. Michael J. McCoy
Vice President, Treasurer of FDL Foods, Inc. until being employed by the
Company on special assignment Treasury Division on October 3, 1994, on
November 21, 1994 he was appointed Assistant Treasurer, on January 1, 1996
he was elected Treasurer, on January 27, 1997 he was elected Vice
President, Treasurer, and on April 17, 1998 he was elected Vice President
and Controller; Mr. Ronald W. Fielding, Regional Manager, Oscar Mayer
Foods Corporation until being employed by the Company as Meat Products
Regional Sales Manager-Southwest Region on January 24, 1994, on June 5,
1995 he was elected Vice President, Hormel Foods International
Corporation, on January 1, 1996 he was elected President, Hormel Foods
International, and on January 27, 1997 he was elected Vice President,
Hormel and President, Hormel Foods International; Mr. Jeffrey M. Ettinger,
Senior Attorney until April 10, 1995 when he was named Product Manager,
Grocery Products, on November 24, 1997 he was appointed Assistant
Treasurer, and on April 27, 1998 he was elected Treasurer; Mr. Steven G.
Binder, Foodservice Regional Sales Manager until December 30, 1996 when he
was named Director Foodservice Sales, and on November 2, 1998 he was
elected Vice President Foodservice.

Executive officers are elected annually by the Board of Directors at the
first meeting following the Annual Meeting of Stockholders. Vacancies may
be filled and additional officers elected at any regular or special
meeting.

-8-
<PAGE>

Item 2. PROPERTIES

Approximate
Floor Space
(Square Feet) Owned or Expiration
Location Unless Noted Leased Date
-------- ------------ ------ ----

Hormel Foods Corporation
------------------------

Slaughtering and Processing Plants

Austin, Minnesota
Slaughter 217,000 Owned (Leased Out)
Processing 1,061,000 Owned

Fremont, Nebraska 637,000 Owned

Rochelle, Illinois 434,000 Owned
(Rochelle Foods, Inc.)

Processing Plants

Algona, Iowa 152,000 Owned
Austin, Minnesota-Annex 83,000 Owned
Beloit, Wisconsin 338,000 Owned
Ft. Dodge, Iowa 17,000 Owned (Leased out)
Houston, Texas 93,000 Owned (Closed)
Knoxville, Iowa 130,000 Owned
Oklahoma City, Oklahoma 57,000 Owned
Osceola, Iowa-Plant 333,000 Owned
Osceola, Iowa-Dist.Center 235,000 Owned
Stockton, California 139,000 Owned
Tucker, Georgia 259,000 Owned
Wichita, Kansas 75,000 Owned
(Dold Foods, Inc.)
Aurora, Illinois 71,000 Owned
(Creative Contract
Packaging Corp.)
Aurora, Illinois 70,000 Owned
(Herb-Ox Plant)

Research and Development Center

Austin, Minnesota 57,000 Owned

Corporate Offices

Austin, Minnesota 119,000 Owned

Stagg Foods, Inc.

Hillsboro, Oregon 100,000 Owned (Closed)

Dan's Prize, Inc.
-----------------

Long Prairie, Minn.-Plant 77,840 Owned
Browerville, Minn.-Plant 52,400 Owned

-9-
<PAGE>

Item 2. PROPERTIES-Continued

Approximate
Floor Space
(Square Feet) Owned or Expiration
Location Unless Noted Leased Date
-------- ------------ ------ ----

Jennie-O Foods, Inc.
--------------------

Willmar, Minnesota-
Airport Plant 333,000 Owned

Willmar, Minnesota-
Benson Ave. Plant 79,000 Owned

Melrose, Minnesota-Plant 119,000 Owned
Turkey Farms - Acres 9,365 Owned

Henning, Minnesota-
Feed Mill 5,200 Owned

Atwater, Minnesota-
Feed Mill 14,000 Owned

Montevideo, Minnesota 83,000 Owned

Pelican Rapids, Minnesota-
West Central Turkeys
Plant 185,000 Owned

Marshall, Minnesota
Heartland Foods Plant 142,000 Owned

Vista International Packaging, Inc.
-----------------------------------

Kenosha, Wisconsin-Plant 60,940 Owned

Algona Food Equipment Company (AFECO)
-------------------------------------

Algona, Iowa-Plant 45,000 Owned

The Company has renovation projects in progress at Austin, Minnesota;
Fremont, Nebraska; Rochelle, Illinois; and at various Jennie-O
locations.

The Company believes its operating facilities are well maintained and
suitable for current production volumes and all volumes anticipated in
the foreseeable future.

Item 3. LEGAL PROCEEDINGS

The Company knows of no pending material legal proceedings.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to shareholders during the fourth quarter of the
1998 fiscal year.

-10-
<PAGE>

PART II

Item 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS

The high and low closing price of the Company's Common Stock and the
dividends per share declared for each fiscal quarter of 1998 and 1997,
respectively, are shown below:

1998 High Low Dividend
---- ---- --- --------
First Quarter 32-15/16 28-5/8 $.16
Second Quarter 38-7/8 32-11/16 $.16
Third Quarter 36-15/16 32-1/16 $.16
Fourth Quarter 34-1/2 26-3/16 $.16

1997 High Low Dividend
---- ---- --- --------
First Quarter 27-7/8 23-1/2 $.155
Second Quarter 27 23-7/8 $.155
Third Quarter 28-7/16 23-7/8 $.155
Fourth Quarter 32-1/2 28-1/16 $.155

Additional information about dividends, principal market of trade and
number of stockholders on page 33 of the Annual Stockholders' Report for
the year ended October 31, 1998, is incorporated herein by reference. The
Company's Common Stock has been listed on the New York Stock Exchange
since January 16, 1990.

Item 6. SELECTED FINANCIAL DATA

Selected Financial Data for the ten years ended October 31, 1998, on pages
18 and 19 of the Annual Stockholders' Report for the year ended October
31, 1998, is incorporated herein by reference.

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Management's Discussion and Analysis of Financial Condition and Results of
Operations on pages 31 and 32 of the Annual Stockholders' Report for the
year ended October 31, 1998, is incorporated herein by reference.

Item 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information on the Company's exposure to market risk is included in the
Management's Discussion and Analysis of Financial Condition and Results of
Operations on page 32 of the Annual Stockholders' Report for the year
ended October 31, 1998, incorporated herein by reference.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Consolidated Financial Statements, including unaudited quarterly data, on
pages 20 through 30 and the Report of Independent Auditors on page 30 of
the Annual Stockholders' Report for the year ended October 31, 1998, is
incorporated herein by reference.

Item 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

-11-
<PAGE>

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information under "Election of Directors", contained on pages 3 through 5
of the definitive proxy statement for the Annual Meeting of Stockholders
to be held January 26, 1999, is incorporated herein by reference.

Information concerning Executive Officers is set forth in Item 1(d) of
Part I pursuant to Instruction 3, Paragraph (b) of Item 401 of Regulation
S-K.

Item 11. EXECUTIVE COMPENSATION

Information for the year ended October 31, 1998, under "Executive
Compensation" on pages 8 through 13 and "Compensation of Directors" on
page 5 of the definitive proxy statement for the Annual Meeting of
Stockholders to be held January 26, 1999, is incorporated herein by
reference.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

Ownership of securities of the Company by certain beneficial owners and
management for the year ended October 31, 1998, as set forth on pages 6
and 7 of the definitive proxy statement for the Annual Meeting of
Stockholders to be held January 26, 1999, is incorporated herein by
reference.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information under "Other Information Relating to Directors, Nominees, and
Executive Officers" for the year ended October 31, 1998, as set forth on
page 15 of the definitive proxy statement for the Annual Meeting of
Stockholders to be held January 26, 1999, is incorporated herein by
reference.

PART IV

Item 14. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K

(a) (1) and (2)--The response to this portion of Item 14 is submitted
as a separate section of this report.

(3)--List of Exhibits--The response to this portion of Item
14 is submitted as a separate section of this report.

(b) No Form 8-K'S were filed in the fourth quarter.

(d) The response to this portion of Item 14 is submitted as a separate
section of this report.

-12-
<PAGE>

SIGNATURES
----------

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

HORMEL FOODS CORPORATION

By /s/ Joel W. Johnson January 26, 1999
---------------------------------------------------------
Date
Joel W. Johnson, Chairman of the Board,
President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated:

Chairman of the Board,
/s/Joel W. Johnson 1/26/99 President, Chief Executive
----------------------------------------- Officer and Director
Joel W. Johnson Date (Principal Executive Officer)

Executive Vice President,
/s/ Don J. Hodapp 1/26/99 Chief Financial Officer
----------------------------------------- and Director
Don J. Hodapp Date (Principal Financial and
Accounting Officer)

/s/ Gary J. Ray 1/26/99
----------------------------------------- Executive Vice President
Gary J. Ray Date and Director

/s/ Eric A. Brown 1/26/99 Group Vice President
----------------------------------------- Prepared Foods Group
Eric A. Brown Date and Director

Group Vice President
/s/ David N. Dickson 1/26/99 International and
----------------------------------------- Corporate Development
David N. Dickson Date and Director

/s/ Stanley E. Kerber 1/26/99 Group Vice President
----------------------------------------- Meat Products Group
Stanley E. Kerber Date and Director

-13-
<PAGE>

/s/ John W. Allen 1/26/99 Director
-----------------------------------------
John W. Allen Date

/s/ John R. Block 1/26/99 Director
-----------------------------------------
John R. Block Date

/s/ William S. Davila 1/26/99 Director
-----------------------------------------
William S. Davila Date

/s/ E. Peter Gillette Jr. 1/26/99 Director
-----------------------------------------
E. Peter Gillette Jr. Date

/s/ Luella G. Goldberg 1/26/99 Director
-----------------------------------------
Luella G. Goldberg Date

/s/ Geraldine M. Joseph 1/26/99 Director
-----------------------------------------
Geraldine M. Joseph Date

/s/ Joseph T. Mallof 1/26/99 Director
-----------------------------------------
Joseph T. Mallof Date

/s/ Dr. Robert R. Waller 1/26/99 Director
-----------------------------------------
Dr. Robert R. Waller Date

-14-
<PAGE>

F-1

ANNUAL REPORT ON FORM 10-K

ITEM 14 (a) (1), (2), AND (3) AND ITEM 14 (c) AND (d)

LIST OF FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE

FINANCIAL STATEMENT SCHEDULE

LIST OF EXHIBITS

YEAR ENDED OCTOBER 31, 1998

HORMEL FOODS CORPORATION

Austin, Minnesota

-15-
<PAGE>

F-2

Item 14(a) (1), (2) and (3) and Item 14 (c) and (d)

LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

HORMEL FOODS CORPORATION

October 31, 1998

The following consolidated financial statements of Hormel Foods
Corporation included in the Annual Report of the Registrant to its
stockholders for the year ended October 31, 1998, are incorporated
herein by reference in Item 8 of Part II of this report:

Consolidated Statements of Financial Position--October 31, 1998 and
October 25, 1997.

Consolidated Statements of Operations--Years Ended October 31, 1998,
October 25, 1997 and October 26, 1996.

Consolidated Statements of Changes in Shareholders' Investment--Years
Ended October 31, 1998, October 25, 1997 and October 26, 1996.

Consolidated Statements of Cash Flows--Years Ended October 31, 1998,
October 25, 1997 and October 26, 1996.

Notes to Financial Statements--October 31, 1998.

Report of Independent Auditors

The following consolidated financial statement schedule of Hormel Foods
Corporation required pursuant to Item 14(d) is submitted herewith.

Schedule II -- Valuation and Qualifying Accounts and Reserves..F-3

All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and
therefore have been omitted.

FINANCIAL STATEMENTS AND SCHEDULES OMITTED

Condensed parent company financial statements of the registrant are
omitted pursuant to Rule 5-04(c) of Article 5 of Regulation S-X.

-16-
<PAGE>

<TABLE>

F-3

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

HORMEL FINANCIAL SERVICES CORPORATION

(Dollars in Thousands)

- ------------------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL D COL.E
- ------------------------------------------------------------------------------------------------------------------------------------
Additions
-----------------------------------
(1) (2)
Balance at Charged to Charged to Balance at
Beginning Costs and Other Accounts- Deductions- End of
Classification of Period Expenses Describe Describe Period
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>

Valuation reserve deduction
from assets account:

Fiscal year ended
October 31, 1998
Allowance for
doubtful accounts $729 (1)
receivable .................. $1,273 ............ $691 ............ $-0- ............. $(38)(2) ....... $1,273

Fiscal year ended
October 25, 1997
Allowance for
doubtful accounts $822 (1)
receivable .................. $1,413 ........... $757 ............. $(140)(3) ....... $(65)(2) ...... $1,273

Fiscal year ended
October 26, 1996
Allowance for
doubtful accounts $542 (1)
receivable .................. $1,413 ........... $453 ............. $-0- ............ $(89)(2) ...... $1,413

- ------------------------------------------------------------------------------------------------------------------------------------

Note (1) - Uncollectible accounts written off.

Note (2) - Recoveries on accounts previously written off.

Note (3) - Reserve on records of Farm Fresh Catfish Company before the sale
occurred during Fiscal 1997.

</TABLE>

-17-
<PAGE>

LIST OF EXHIBITS

HORMEL FOODS CORPORATION

Number Description of Document

*(3) A-1 Certification of Incorporation as amended to date.
(filed as Exhibit 3A-1 to Annual Report on Form 10-K
for fiscal year ended October 26, 1996.)

*(3) B-1 By-laws as amended to date.

(4) Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K,
copies of instruments defining the rights of holders
of long-term debt are not filed. The Company agrees
to furnish a copy thereof to the Securities and
Exchange Commission upon request.

(9) None.

(10) None.

(12) None.

**(13) Pages 17 through 33 of the Annual Report to
Stockholders for fiscal year ended October
31, 1998.

(18) None.

(19) None.

(22) None.

**(23) Consent of Independent Auditors.

(24) None.

(25) None.

**(27) Financial Data Schedule.

**(99) Proxy Statement for the Annual Meeting of Stockholders
to be held January 26, 1999.

* Document has previously been filed with the Securities and Exchange
Commission and is incorporated herein by reference.

** These Exhibits transmitted via EDGAR.

-18-
<PAGE>

The following pages numbered Page 17 through 33 reflect the page numbers
from the Annual Report to Stockholders' which has been incorporated by
reference into Form 10-K.

<PAGE>

Beginning of Page 17 of the Annual Report to Stockholders'

OFFICERS AND DIRECTORS

<S> <C>

Joel W. Johnson (4*,5,7*) Ronald W. Fielding
Chairman of the Board Vice President
President President of Hormel Foods
Chief Executive Officer International
Director since June 1991
James A. Jorgenson
Don J. Hodapp (4,6*) Vice President
Executive Vice President Human Resources
Chief Financial Officer
Director since April 1986 Michael J. McCoy
Vice President
Gary J. Ray (3*,4) Controller
Executive Vice President
Operations Gary C. Paxton
Director since November 1990 Vice President
Manufacturing
Eric A. Brown (3,4)
Group Vice President James N. Rieth, Ph.D.
Prepared Foods Vice President
Director since January 1997 President and
Chief Executive Officer
David N. Dickson (4,6) Jennie-O Foods
Group Vice President
International and Mahlon C. Schneider
Corporate Development Vice President
Director since November 1990 General Counsel

Stanley E. Kerber (3,4) Robert A. Slavik
Group Vice President Vice President Sales
Meat Products Meat Products
Director since November 1990
Jeffrey M. Ettinger
Steven G. Binder Treasurer
Vice President
Foodservice Thomas J. Leake
Secretary
Richard A. Bross
Vice President James W. Cavanaugh
Grocery Products Assistant Secretary

Forrest D. Dryden, Ph.D. Kevin C. Jones
Vice President Assistant Secretary
Research and Development

John W. Allen, Ph.D. (1,7 Geraldine M. Joseph (1*,5)
East Lansing, MI Minneapolis, MN
Professor and Director Former U.S. Ambassador to The Netherlands
Food Industry Alliance Chair, Advisory Committee
Michigan State University Hubert H. Humphrey Institute of Public Affairs
Director since October 1989 Director, Minnesota International Center
Director August 1974-July 1978
John R. Block (1,5) Reelected April 1981
Falls Church, VA
Former U.S. Secretary of Agriculture Joseph T. Mallof (2,7)
President Racine, WI
Food Distributors International President
Director since October 1997 Americas and South Asia
S.C. Johnson & Sons, Inc.
William S. Davila (1,2*) Director since October 1997
Los Angeles, CA
President Emeritus Robert R. Waller, M.D. (5*,7)
The Vons Companies, Inc. Rochester, MN
Director since January 1993 Professor of Ophthalmology
Mayo Medical School
E. Peter Gillette, Jr. (2,6) President Emeritus
Minneapolis, MN Mayo Foundation
Retired President Director since January 1993
Piper Trust Company
Director since July 1996
(1) Audit Committee
Luella G. Goldberg (5,6) (2) Compensation Committee
Minneapolis, MN (3) Contributions Committee
Trustee Emerita (4) Executive Committee
Wellesley College (5) Nominating Committee
Member Board of Overseers (6) Employee Benefits Committee
University of Minnesota (7) Personnel Committee
Carlson School of Management * Denotes Chairperson
Director since September 1993

</TABLE>

End of Page 17

<PAGE>

Beginning of Pages 18/19

SELECTED FINANCIAL DATA

(In Thousands, Except Per Share Amounts) 1998* 1997 1996 1995
---------- ---------- ---------- ----------
OPERATIONS
<S> <C> <C> <C> <C>
Net Sales ................................. $3,261,045 $3,256,551 $3,098,685 $3,046,195
Net Earnings Before Cumulative
Effect of Accounting Changes ............ 139,291 109,492 79,408 120,436
Percent of Sales ........................ 4.27% 3.36% 2.56% 3.95%
Cumulative Effect of Accounting Changes
Net Earnings (Loss) ....................... 139,291 109,492 79,408 120,436
Wage Costs ................................ 498,973 435,789 398,824 373,901
Total Taxes (Excluding Payroll Tax) ....... 89,816 73,115 56,992 84,329
Depreciation and Amortization ............. 60,273 52,925 42,700 37,220

FINANCIAL POSITION

Working Capital ............................ $449,714 $410,774 $456,850 $441,452
Properties (Net) ........................... 486,907 488,738 421,486 333,084
Total Assets ............................... 1,555,892 1,528,535 1,436,138 1,223,860
Long-term Debt
Less Current Maturities .................. 204,874 198,232 127,003 16,959
Shareholders' Investment ................... 813,315 802,202 785,551 732,047

PER SHARE OF COMMON STOCK

Net Earnings Before Cumulative Effect
of Accounting Changes-- Basic ............ $1.86 $1.43 $1.04 $1.57
Net Earnings Before Cumulative Effect
of Accounting Changes-- Diluted .......... 1.85 1.43 1.04 1.57
Cumulative Effect of Accounting Changes
Net Earnings (Loss)-- Basic ................ 1.86 1.43 1.04 1.57
Net Earnings (Loss)-- Diluted .............. 1.85 1.43 1.04 1.57
Dividends .................................. 0.64 0.62 0.60 0.58
Shareholders' Investment ................... 11.07 10.59 10.13 9.54

*53 Weeks
**Adoption of SFAS No. 106 and No. 109

</TABLE>

SELECTED FINANCIAL DATA

(In Thousands, Except Per Share Amounts) 1994 1993 1992* 1991
---------- ---------- ---------- ----------
OPERATIONS
<S> <C> <C> <C> <C>
Net Sales .................................. $3,064,793 $2,853,997 $2,813,651 $2,836,222
Net Earnings Before Cumulative
Effect of Accounting Changes ............. 117,975 100,770 95,174 86,393
Percent of Sales ......................... 3.85% 3.53% 3.38% 3.05%
Cumulative Effect of Accounting Changes .... (127,529)**
Net Earnings (Loss) ........................ 117,975 (26,759) 95,174 86,393
Wage Costs ................................. 351,096 325,115 304,696 278,537
Total Taxes (Excluding Payroll Tax) ........ 82,915 70,026 64,968 60,035
Depreciation and Amortization .............. 36,611 32,174 38,972 36,269

FINANCIAL POSITION

Working Capital ............................ $443,298 $392,846 $401,216 $346,164
Properties (Net) ........................... 270,886 244,987 216,390 231,817
Total Assets ............................... 1,196,718 1,093,559 913,015 856,835
Long-term Debt
Less Current Maturities .................. 10,300 5,700 7,624 22,833
Shareholders' Investment ................... 661,089 570,888 644,284 583,408

PER SHARE OF COMMON STOCK

Net Earnings Before Cumulative Effect
of Accounting Changes-- Basic ............ $1.54 $1.31 $1.24 $1.13
Net Earnings Before Cumulative Effect
of Accounting Changes-- Diluted .......... 1.54 1.31 1.24 1.12
Cumulative Effect of Accounting Changes .... (1.66)**
Net Earnings (Loss)-- Basic ................ 1.54 (0.35) 1.24 1.13
Net Earnings (Loss)-- Diluted .............. 1.54 (0.35) 1.24 1.12
Dividends .................................. 0.50 0.44 0.36 0.30
Shareholders' Investment ................... 8.62 7.45 8.41 7.61

*53 Weeks
**Adoption of SFAS No. 106 and No. 109

</TABLE>

SELECTED FINANCIAL DATA

(In Thousands, Except Per Share Amounts) 1990 1989 1988
---------- ---------- ----------
OPERATIONS
<S> <C> <C> <C>
Net Sales .................................. $2,681,180 $2,340,513 $2,292,847
Net Earnings Before Cumulative Effect
of Accounting Changes .................... 77,124 70,114 60,192
Percent of Sales ......................... 2.88% 3.00% 2.63%
Cumulative Effect of Accounting Changes
Net Earnings (Loss) ........................ 77,124 70,114 60,192
Wage Costs ................................. 267,391 254,449 253,937
Total Taxes (Excluding Payroll Tax) ........ 51,990 48,983 44,541
Depreciation and Amortization .............. 35,554 36,863 35,517

FINANCIAL POSITION
Working Capital ............................ $293,818 $232,941 $156,476
Properties (Net) ........................... 235,026 244,362 263,056
Total Assets ............................... 799,422 727,429 706,548
Long-term Debt
Less Current Maturities .................. 24,535 19,228 20,399
Shareholders' Investment ................... 513,832 470,929 418,716

PER SHARE OF COMMON STOCK

Net Earnings Before Cumulative Effect
of Accounting Changes-- Basic ............ $1.01 $0.91 $0.79
Net Earnings Before Cumulative Effect
of Accounting Changes-- Diluted .......... 1.00 0.91 0.78
Cumulative Effect of Accounting Changes
Net Earnings (Loss)-- Basic ................ 1.01 0.91 0.79
Net Earnings (Loss)-- Diluted .............. 1.00 0.91 0.78
Dividends .................................. 0.26 0.22 0.18
Shareholders' Investment ................... 6.70 6.14 5.46

*53 Weeks
**Adoption of SFAS No. 106 and No. 109

</TABLE>

End of Pages 18/19

<PAGE>

Beginning of Page 20

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

October 31, October 25,
(In Thousands) 1998 1997
------------ -----------
ASSETS

CURRENT ASSETS
Cash and cash equivalents ..................... $203,934 $146,853
Short-term marketable securities .............. 34,098 5,533
Accounts receivable ........................... 222,919 233,966
Inventories ................................... 239,548 265,346
Deferred income taxes ......................... 8,894 12,204
Prepaid expenses .............................. 7,972 7,450
-------- --------

TOTAL CURRENT ASSETS ............................ 717,365 671,352

DEFERRED INCOME TAXES ........................... 65,606 68,629

INTANGIBLES ..................................... 105,244 112,358

INVESTMENTS IN AFFILIATES ....................... 111,364 132,724

OTHER ASSETS .................................... 69,406 54,734

PROPERTY, PLANT AND EQUIPMENT
Land .......................................... 13,080 11,467
Buildings ..................................... 275,445 242,124
Equipment ..................................... 616,109 594,159
Construction in progress ...................... 33,947 72,179
-------- --------
938,581 919,929
Less allowance for depreciation ............... (451,674) (431,191)
-------- --------
486,907 488,738
-------- --------
TOTAL ASSETS .................................... $ 1,555,892 $ 1,528,535
=========== ===========

End of Page 20

<PAGE>

Beginning of Page 21

October 31, October 25,
(In Thousands) 1998 1997
---------- ----------
LIABILITIES AND SHAREHOLDERS' INVESTMENT

CURRENT LIABILITIES
Accounts payable ............................. $ 119,836 $ 120,385
Accrued expenses ............................. 33,699 34,564
Accrued marketing expenses ................... 26,140 21,543
Employee compensation ........................ 54,314 46,275
Taxes, other than federal income taxes ....... 14,599 16,524
Dividends payable ............................ 11,774 11,980
Federal income taxes ......................... 1,172 4,712
Current maturities of long-term debt ......... 6,117 4,595
---------- ---------
TOTAL CURRENT LIABILITIES .................... 267,651 260,578

LONG-TERM DEBT-- less current maturities ....... 204,874 198,232

ACCUMULATED POSTRETIREMENT BENEFIT OBLIGATION .. 248,201 243,343

OTHER LONG-TERM LIABILITIES .................... 21,851 24,180

SHAREHOLDERS' INVESTMENT
Preferred Stock, par value $.01 a share --
authorized 40,000,000 shares; issued -- none
Common Stock, nonvoting, par value $.01 a share --
authorized 40,000,000 shares; issued -- none
Common Stock, par value $.1172 a share --
authorized 200,000,000 shares;
issued 73,614,546 shares October 31, 1998
issued 75,776,510 shares October 25, 1997 .. 8,628 8,881

FOREIGN CURRENCY TRANSLATION ADJUSTMENT ........ (2,034)

RETAINED EARNINGS .............................. 810,280 793,321
---------- ---------
816,874 802,202
SHARES HELD IN TREASURY ........................ (3,559)
---------- ---------
TOTAL SHAREHOLDERS' INVESTMENT ................. 813,315 802,202

TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT . $1,555,892 $1,528,535
========== ==========

See notes to consolidated financial statements.

End of Page 21

<PAGE>

Beginning of Page 22

CONSOLIDATED STATEMENTS OF OPERATIONS

Fiscal Year Ended
-------------------------------------
October 31, October 25, October 26,
(In Thousands, Except Per Share Amounts) 1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Sales, less returns and allowances ............. $3,261,045 $3,256,551 $3,098,685
Cost of products sold .......................... 2,400,333 2,497,662 2,398,272

GROSS PROFIT ................................... 860,712 758,889 700,413

Expenses and gain on plant sale:
Selling and delivery ......................... 328,050 297,294 294,087
Marketing .................................... 276,826 217,637 209,021
Administrative and general ................... 72,331 75,788 75,659
Gain on plant sale ........................... (28,379)
Restructuring charges ........................ (5,176) 8,659
---------- ---------- ----------
OPERATING INCOME ............................... 211,884 173,346 112,987

Other income and expense:
Interest and investment income ................ 14,821 9,156 14,106
Equity in earnings of affiliates .............. 4,323 3,402
Interest expense .............................. (13,692) (15,043) (1,619)
---------- ---------- ----------

EARNINGS BEFORE INCOME TAXES .................. 217,336 170,861 125,474
Provision for income taxes .................... 78,045 61,369 46,066
---------- ---------- ----------

NET EARNINGS .................................. $ 139,291 $ 109,492 $ 79,408
========== ========== ==========

Net Earnings Per Share (basic) ................ $ 1.86 $ 1.43 $ 1.04

Net Earnings Per Share (diluted) .............. $ 1.85 $ 1.43 $ 1.04

See notes to consolidated financial statements.

</TABLE>

End of Page 22

<PAGE>

Beginning of Page 23

CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS' INVESTMENT

<TABLE>
<CAPTION>
Foreign
Additional Currency Total
COMMON STOCK TREASURY STOCK Paid-in Retained Translation Shareholders'
Shares Amount Shares Amount Capital Earnings Adjustment Investment
(In Thousands, Except Per Share Amounts)-------- --------- -------- -------- ---------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>

Balance at October 28, 1995 ........... 76,852 $ 9,007 (150) $( 3,922) $ 16,624 $ 710,338 $ 0 $732,047
-------- -------- ------- -------- -------- --------- ------- --------
Purchases of Common Stock ............. (1,015) (24,334) (24,334)
Exercise of stock options ............. 114 3,013 (1,114) 1,899
Shares retired ........................ (1,027) (120) 1,027 24,708 (24,588) 0
Issuance of stock for Stagg Foods, Inc. 1,709 200 39,800 40,000
Tax benefit of stock options .......... 378 378
Adjustment in minimum pension liability 2,254 2,254
Net earnings .......................... 79,408 79,408
Cash dividends-- $.60 per share ....... (46,101) (46,101)
-------- -------- ------- -------- -------- --------- ------- --------
Balance at October 26, 1996 ........... 77,534 9,087 (24) (535) 32,214 744,785 0 785,551
Purchases of Common Stock ............. (1,748) (45,457) (45,457)
Exercise of stock options ............. 15 368 (132) 236
Shares retired ........................ (1,757) (206) 1,757 45,624 (32,281) (13,137) 0
Tax benefit of stock options .......... 67 67
Adjustment in minimum pension liability (140) (140)
Net earnings .......................... 109,492 109,492
Cash dividends-- $.62 per share ....... (47,547) (47,547)
-------- -------- ------- -------- -------- --------- ------- --------
Balance at October 25, 1997 ........... 75,777 8,881 0 0 0 793,321 0 802,202
Purchases of Common Stock ............. (2,372) (80,104) (80,104)
Exercise of stock options ............. 91 3,074 (1,562) 1,512
Shares retired ........................ (2,162) (253) 2,162 73,471 (73,218) 0
Foreign currency translation adjustment (2,034) (2,034)
Adjustment in minimum pension liability (79) (79)
Net earnings .......................... 139,291 139,291
Cash dividends-- $.64 per share ....... (47,473) (47,473)
-------- -------- ------- -------- -------- --------- ------- --------
Balance at October 31, 1998 ........... 73,615 $ 8,628 (119) $(3,559) $ 0 $ 810,280 $(2,034) $813,315
======== ======== ======= ======== ======== ========= ======= ========

See notes to consolidated financial statements.

</TABLE>

End of Page 23

<PAGE>

Beginning of Page 24

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Fiscal Year Ended
-----------------------------------
October 31, October 25, October 26,
(In Thousands) 1998 1997 1996
----------- ----------- -----------
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net earnings ............................................................ $ 139,291 $ 109,492 $ 79,408
Adjustments to reconcile to net cash provided by operating activities:
Depreciation .......................................................... 53,159 44,915 38,280
Amortization of intangibles ........................................... 7,114 8,010 4,419
Equity in earnings of affiliates ...................................... (4,323) (3,402)
Provision for deferred income taxes ................................... 4,516 (444) (2,347)
Gain on investments ................................................... (4,627)
(Gain) loss on property/equipment sales and plant facilities .......... (15,346) 50 (3,767)
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable ............................ 11,047 (3,097) 2,773
Decrease (increase) in inventories and prepaid expenses ............... 25,276 4,864 (56,771)
Increase in accounts payable and accrued expenses ..................... 8,286 2,101 52,040
---------- ---------- ---------
Net cash provided by operating activities .......................... 229,020 162,489 109,408

INVESTING ACTIVITIES
Redemption of held-to-maturity securities ............................... 86,301 62,394
Sale of available-for-sale securities ................................... 13,116
Purchase of held-to-maturity securities ................................. (114,866) (53,285) (14,642)
Acquisitions of businesses .............................................. (140) (10,645)
Purchases of property/equipment ......................................... (75,774) (116,381) (122,942)
Proceeds from sales of property/equipment ............................... 39,792 4,163 5,410
Decrease (increase) in investments, equity in affiliates and other assets 4,052 (83,011) (20,618)
Dividends from affiliate ................................................ 1,670 1,206
---------- ---------- ---------
Net cash used in investing activities .............................. (58,825) (185,054) (150,321)

FINANCING ACTIVITIES
Proceeds from long-term debt ............................................ 17,589 77,625 110,553
Principal payments on long-term debt .................................... (4,312) (4,349) (3,393)
Dividends paid on Common Stock .......................................... (47,678) (47,178) (45,613)
Share repurchase ........................................................ (80,076) (45,457) (23,966)
Other ................................................................... 1,363 304 2,266
---------- ---------- ---------
Net cash (used in) provided by financing activities ................ (113,114) (19,055) 39,847
---------- ---------- ---------
Increase (decrease) in cash and cash equivalents ................... 57,081 (41,620) (1,066)
Cash and cash equivalents at beginning of year .......................... 146,853 188,473 189,539
---------- ---------- ---------
Cash and cash equivalents at end of year ........................... $ 203,934 $ 146,853 $ 188,473

See notes to consolidated financial statements.

</TABLE>

End of Page 24

<PAGE>

Beginning of Page 25

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
October 31, 1998

NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS OVERVIEW: Hormel Foods is engaged in a single business segment
designated as "meat and food processing." As a federally inspected food
processor, Hormel is engaged in the processing of meat and poultry products,
production of prepared foods and the marketing of those products to food
wholesalers, retailers and foodservice distributors in the United States. The
principal raw materials for the company's products are pork and turkey. The
company's earnings are influenced by the cyclical nature of these raw material
costs.

PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include
the accounts of Hormel Foods Corporation and all of its majority-owned
subsidiaries after elimination of all significant intercompany accounts,
transactions and profits. Certain reclassifications of previously reported
amounts have been made to conform with the current year presentation. The
reclassifications had no impact on the net earnings as previously reported.

USE OF ESTIMATES: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

FISCAL YEAR: The company's fiscal year ends on the last Saturday in
October. Fiscal year 1998 consisted of 53 weeks and fiscal years 1997 and 1996
consisted of 52 weeks.

INVENTORIES: Inventories are stated at the lower of cost or market.
Livestock and the materials portion of products are valued on the first-in,
first-out method with the exception of the materials portion of turkey products
which are valued on the last-in, first-out method. Substantially all
inventoriable expenses, packages and supplies are valued by the last-in,
first-out method. Allowances for slow-moving, obsolete, unsaleable or unusable
inventories are not material.

PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment are stated at
cost. The company generally uses the straight-line method in computing
depreciation for financial reporting purposes and generally uses accelerated
methods for income tax purposes. The annual provisions for depreciation have
been computed principally in accordance with the following ranges of asset
lives: buildings 20 to 40 years, machinery and equipment 5 to 10 years.
Beginning in 1996, the company capitalized certain software development and
implementation costs. Prior to 1996, such costs were not significant.
Development and implementation costs are expensed until the company has
determined that the software will result in probable future economic benefits
and management has committed to funding the project. Thereafter, all direct,
external implementation costs and purchased software costs are capitalized and
amortized using the straight-line method over the remaining estimated useful
lives, not exceeding five years.

INTANGIBLES: Goodwill and other intangibles are recorded at their estimated
fair values at date of acquisition and are amortized on a straight-line basis
over periods ranging up to 40 years. Accumulated amortization at October 31,
1998, and October 25, 1997, was $35.4 million and $28.2 million, respectively.

IMPAIRMENT OF LONG-LIVED ASSETS: The company reviews the long-lived assets,
including identifiable intangibles and associated goodwill, for impairment when
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. If impairment indicators are present and the estimated
future undiscounted cash flows are less than the carrying value of the assets
and any related goodwill, the carrying value is reduced to the estimated fair
value as measured by the discounted cash flows.

FOREIGN CURRENCY TRANSLATION: Assets and liabilities denominated in foreign
currency are translated at the current exchange rate as of the balance sheet
date, and income statement amounts are translated at the average monthly
exchange rate. Translation adjustments resulting from fluctuations in exchange
rates are recorded as a "cumulative translation adjustment" in shareholders'
investment. Gains and losses from foreign currency transactions are not
material.

EQUITY METHOD INVESTMENTS: The company has a number of investments in joint
ventures and other entities where its voting interests are in excess of 20
percent but no greater than 50 percent. The company accounts for such
investments under the equity method of accounting, and its underlying share of
each investee's equity is reported in the consolidated balance sheet as part of
investments in affiliates. The company's only material equity investment is in
the common stock of a Spanish company, Campofrio Alimentacion, S.A. (Campofrio).
The company purchased a 21.4 percent interest in Campofrio in 1997 for $64.3
million, which resulted in the recording of $17.9 million of goodwill. The fair
value of such publicly traded securities was $119.3 million at October 31, 1998.

DIVESTITURES AND ACQUISITIONS: The company recorded a $28.4 million gain
($17.4 million after tax, or $.23 per share) in the first quarter of 1998
related to the sale of its Davenport (Iowa) gelatin/specialized proteins plant.
The company acquired Stagg Foods, Inc., a manufacturer of chili products, in
October 1996 for $40.0 million of the company's stock. Additionally, the company
paid $10.0 million in cash to the former owners under a five-year noncompete
agreement. The acquisition resulted in the recording of $32.1 million of
goodwill which is being amortized over 30 years. The company also acquired
several other businesses during the three fiscal year period ended October 31,
1998, which are included in the company's results of operations since the
respective acquisition dates. The results of these acquired businesses, either
individually or in the aggregate, were not significant to the company's results
of operations.

REVENUE RECOGNITION: The company follows a policy of recognizing sales at
the time of product shipment.

ADVERTISING EXPENSES: Advertising costs are expensed when incurred.
Advertising expenses include all media advertising but exclude the costs
associated with coupons, samples and market research. Advertising costs for
fiscal years 1998, 1997 and 1996 were $246.1 million, $190.1 million and $177.2
million, respectively.

RESEARCH AND DEVELOPMENT EXPENSES: Research and development expenses
incurred for fiscal years 1998, 1997 and 1996 were $9.0 million, $8.6 million
and $8.0 million, respectively.

End of Page 25

<PAGE>

Beginning of Page 26

INCOME TAXES: The company records income taxes in accordance with the
liability method of accounting. Deferred taxes are recognized for the estimated
taxes ultimately payable or recoverable based on enacted tax law. Changes in
enacted tax rates are reflected in the tax provision as they occur.

EMPLOYEE STOCK OPTIONS: The company uses the intrinsic value method
prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees," and related interpretations in accounting for employee
stock options. Under the intrinsic value method, compensation expense is
recognized only to the extent the market price of the common stock exceeds the
exercise price of the stock option at the date of the grant.

EARNINGS PER SHARE: During the second quarter of fiscal 1998, the company
adopted Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings
per Share." All current and prior year earnings per share data have been
restated to conform to the provisions of SFAS 128. The company's basic net
earnings per share is computed by dividing net earnings by the weighted-average
number of outstanding common shares. The company's diluted net earnings per
share is computed by dividing net earnings by the weighted-average number of
outstanding common shares and the dilutive effect of stock options, when
applicable. The following table presents informationive effect of stock options,
when applicable. The following table presents information necessary to calculate
basic and diluted earnings per common share necessary to calculate basic and
diluted earnings per common share and common share equivalent:

(In Thousands, Except Per Share Amounts) 1998 1997 1996
---- ---- ----
Net earnings for basic and diluted
earnings per share computation $139,291 $109,492 $79,408
Weighted-average shares outstanding
for basic earnings per share 74,743 76,495 76,509
Dilutive effect of stock options 460 234 121
Adjusted weighted-average shares
outstanding and assumed conversions
for diluted earnings per share 75,203 76,729 76,630
Basic earnings per share $1.86 $1.43 $1.04
Diluted earnings per share $1.85 $1.43 $1.04

ACCOUNTING CHANGES AND RECENT ACCOUNTING PRONOUNCEMENTS: In June 1997, the
Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income." This statement
establishes standards for the reporting of comprehensive income and its
components in a full set of general-purpose financial statements. The company
will be required to adopt Statement No. 130 in fiscal 1999 and does not expect
the measure of comprehensive income to be materially different from the measure
of net income. In June 1997, the FASB also issued Statement of Financial
Accounting Standards No. 131, "Disclosures About Segments of an Enterprise and
Related Information." This statement revises information regarding the reporting
of operating segments. It also establishes standards for related disclosures
about products and services, geographic areas and major customers. The company
will be required to adopt Statement No. 131 in fiscal 1999. The company does not
believe that the adoption of this statement will result in segment disclosures
that are materially different than those provided under the current accounting
standards.

In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133 June 1998, the FASB issued Statement of Financial Accounting Standards No.,
"Accounting for Derivative Instruments and Hedging Activities." This statement,
which is required to be adopted for annual periods beginning after June 15,
1999, requires a company to recognize all derivatives on the balance sheet at
fair value. Derivatives that are not hedges must be adjusted to fair value
through income. If the derivative is a hedge, depending on the nature of the
hedge, changes in the fair value of the hedged assets, liabilities or firm
commitments are recognized through earnings or in other comprehensive income
until the hedged item is recognized in earnings. The ineffective portion of a
derivative's change in fair value will be immediately recognized in earnings.
The company has concluded that the adoption of Statement No. 133 will not have
an impact on the financial statements.

NOTE B. CASH AND CASH EQUIVALENTS AND SHORT-TERM MARKETABLE SECURITIES

The company considers all investments with an original maturity of three months
or less on their acquisition date to be cash equivalents. The company classifies
investments with an original maturity of more than three months on their
acquisition date as short-term marketable securities. The company's cash and
cash equivalents and short-term marketable securities at October 31, 1998, and
October 25, 1997, consisted of the following (cost approximates fair value):

October 31, 1998 October 25, 1997
---------------- ----------------
Cash Short-term Cash Short-term
and Cash Marketable and Cash Marketable
(In Thousands) Equivalents Securities Equivalents Securities
----------- ---------- ----------- ----------
Held-to-maturity securities:
Commercial paper ....... $ 29,808 $ 27,198 $ 15,780 $ 5,533
Municipal securities ... 33,791 80,064
Preferred securities ... 60,647 4,400 10,000
Taxable securities ..... 31,609 2,500 4,700
Cash ....................... 48,079 36,309
-------- -------- -------- -------
Total ...................... $203,934 $ 34,098 $146,853 $ 5,533
======== ======== ======== =======

NOTE C. INVENTORIES

Principal components of inventories are:
October 31, 1998 October 25, 1997
(In Thousands) ---------------- ----------------

Finished products ..................... $ 137,444 $ 145,897
Raw materials and work-in-process ..... 68,653 86,762
Materials and supplies ................ 60,820 59,846
LIFO reserve .......................... (27,369) (27,159)
------- -------
Total ................................. $ 239,548 $ 265,346
========= =========

Inventoriable expenses, packages and supplies and turkey products amounting to
approximately $82.6 million at October 31, 1998, and $84.5 million at October
25, 1997, are stated at cost determined by the last-in, first-out method and are
$27.4 million and $27.2 million lower in the respective years than such
inventories determined under the first-in, first-out method.

End of Page 26

<PAGE>

Beginning of Page 27

NOTE D. LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS

Long-term debt consists of:
October 31, October 25,
(In Thousands) 1998 1997
----------- -----------
Industrial revenue bonds with variable interest
rates due 1999 to 2005 ............................. $ 5,700 $ 5,700
Promissory notes, principal and interest due
annually through 2001, interest at 6.5%
and 8.9%, secured by limited partnership
interests in affordable housing .................... 8,528 11,046
Medium-term unsecured notes, $35,000,000
maturing in 2002 and $75,000,000 maturing
in 2006, with interest at 7.16% and 7.35%,
respectively ....................................... 110,000 110,000
Medium-term unsecured note, denominated in
Spanish pesetas, with variable interest rate,
principal and interest due annually through 2003.... 59,222 64,337
Medium-term secured notes with variable rates,
principal and interest due annually through
2005, secured by various equipment ................. 16,106 8,468
Variable rate-- revolving credit agreements ........... 10,551 2,776
Other ................................................. 884 500
--------- ---------
210,991 202,827
Less current maturities ............................... 6,117 4,595
--------- ---------
$ 204,874 $ 198,232
========= =========

The company has various lines of credit which have a maximum available
commitment of $27.2 million. As of October 31, 1998, the company has unused
lines of credit of $16.7 million which bear interest at variable rates below
prime. A fixed fee is paid for the availability of credit lines.

Aggregate annual maturities of long-term debt for the five fiscal years after
October 31, 1998, are as follows:

(In Thousands)
1999 ................. $ 6,117
2000 ................. 41,442
2001 ................. 40,697
2002 ................. 48,875
2003 and thereafter .. 73,859

Total interest paid during fiscal 1998, 1997 and 1996 was $13.6 million, $14.9
million and $1.6 million, respectively. Based on borrowing rates currently
available to the company for long-term financing with similar terms and average
maturities, the fair value of long-term debt, including current maturities,
utilizing discounted cash flows is $219.3 million.

NOTE E. BENEFIT PLANS

The company has several noncontributory defined benefit plans and defined
contribution plans covering most employees. Total costs associated with the
company's defined contribution benefit plans in 1998, 1997 and 1996 were $9.9
million, $9.0 million and $8.1 million, respectively. Benefits for defined
benefit pension plans covering hourly employees are provided based on stated
amounts for each year of service while plan benefits covering salaried employees
are based on final average compensation. The company's funding policy is to make
annual contributions of not less than the minimum required by applicable
regulations.

A summary of the components of net periodic pension cost for defined benefit
plans is as follows:

(In Thousands) 1998 1997 1996
-------- -------- -------
Service cost -- benefits earned during
the year ............................... $ 9,567 $ 8,737 $ 8,631
Interest cost on projected benefit
obligation ............................. 32,628 32,780 32,158
Actual return on plan assets ............. (53,031) (138,023) (35,569)
Net amortization and deferral ............ 2,883 101,068 143
-------- -------- -------

Net pension costs ........................ $ (7,953) $ 4,562 $ 5,363
========= ======== ========

Assumptions used in accounting for the defined benefit plans were:

1998 1997 1996
---- ---- ----
Weighted-average discount rates ................... 7.00% 7.25% 7.75%
Rates of increase in compensation levels .......... 5.00 5.00 5.00
Expected long-term rate of return on assets ....... 9.50 9.50 9.50

The following table sets forth the plans' funded status as of the August 1
measurement date and amounts recognized in the statements of financial position:

<TABLE>
<CAPTION>
October 31, 1998 October 25 1997
-------------------- ---------------------
Plans Plans Plans Plans
Whose Whose Whose Whose
Assets Accrued Assets Accrued
Exceed Benefits Exceed Benefits
Accrued Exceed Accrued Exceed
(In Thousands) Benefits Assets Benefits Assets
--------- --------- --------- ---------
Actuarial present value of benefit obligations:
<S> <C> <C> <C> <C>
Vested benefit obligation .................. $ 363,435 $ 40,846 $ 352,991 $ 32,911
Nonvested benefit obligation ............... 29,542 2,400 27,389 7,748
--------- --------- --------- --------
Accrued benefits ........................... 392,977 43,246 380,380 40,659
Effects of estimated future pay increases .. 52,850 3,541 41,624 4,110
--------- --------- --------- --------
Projected benefit obligations .............. 445,827 46,787 422,004 44,769
Plan assets at fair value .................. 566,216 543,344
--------- --------- --------- --------
Projected benefit obligations (less than)
in excess of benefit plan assets ........ (120,389) 46,787 (121,340) 44,769

Unrecognized prior service cost ............ (7,612) (1,531) (8,475) (1,820)
Unrecognized net gain (loss) ............... 72,162 (6,033) 87,603 (6,371)

Remaining net obligation at transition ..... (136) (3,614) (242) (4,310)
Adjustment required to recognize minimum
liability ............................... -- 7,650 -- 8,400
--------- -------- --------- --------
Net pension (asset) liability in
statements of financial position ........ $ (55,975) $ 43,259 $ (42,454) $ 40,668
========== ========= ========= ========
</TABLE>

As of the 1998 valuation date, plan assets included Common Stock of the company
having a market value of $65.7 million. Dividends paid during the year on shares
held by the plan were $1.2 million.

End of Page 27

<PAGE>

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NOTE F. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

The company provides medical and life insurance benefits to certain retired
employees. Eligible employees who retired prior to January 1, 1987, remain on
the medical plan in effect when they retired. The medical plan for eligible
employees who retired after January 1, 1987, is automatically modified to
incorporate plan benefit and plan provision changes whenever they are made to
the active employee plan. Employees hired after January 1, 1990, are eligible
for postretirement medical coverage but must pay the full cost of the coverage.

A summary of the components of postretirement benefit costs is as follows:

(In Thousands) 1998 1997 1996
---- ---- ----
Postretirement benefit cost:
Service cost of benefits earned ............. $ 3,438 $ 2,639 $ 2,533
Interest cost of benefit obligation ......... 18,384 18,237 17,571
Net amortization of deferred losses (gains) . 1,011 129 (176)
----- --- ----
$22,833 $21,005 $19,928
======= ======= =======

The actuarial present value of postretirement benefit obligations and the amount
reported in the Consolidated Statements of Financial Position as of October 31,
1998, and October 25, 1997, are as follows:

Accumulated postretirement benefit obligations as of the August 1 measurement
date:

1998 1997
(In Thousands) --------- ---------

Retirees ........................................... $ 186,435 $ 165,077
Fully eligible active participants ................. 27,836 29,809
Other active participants .......................... 59,934 67,554
------ ------
274,205 262,440

Unrecognized net losses ............................ (22,449) (16,371)
Unrecognized prior service cost .................... 3,085 3,436
Benefit payments subsequent to measurement date .... (6,640) (6,162)
--------- ---------
Accrued postretirement benefit cost ................ $ 248,201 $ 243,343
========= =========

Assumptions used in determining the accumulated postretirement benefit
obligation:
1998 1997 1996
---------- ---------- ----------
Medical plan cost trend rate 5.9% 6.0% 6.5%
declining declining declining
to 5.5% in to 5.5% in to 5.5% in
year 2004 year 2004 year 2004

Weighted-average discount rate 7.00% 7.25% 7.75%

The health care cost trend rate assumption has a significant effect on the
amount reported. For example, a one percent increase in the health care cost
trend rate would increase the accumulated postretirement benefit obligation by
$19.4 million at October 31, 1998, and the net periodic cost by $1.6 million for
the year.

NOTE G. INCOME TAXES

The components of the provision for income taxes are as follows:

1998 1997 1996
(In Thousands) -------- -------- --------
Current:
U.S. Federal ............. $ 62,823 $ 51,978 $ 38,971
State 10,049 9,538 9,311
Foreign .................. 653 220 153
-------- -------- --------
73,525 61,736 48,435
Deferred:
U.S. Federal ............. 4,080 (329) (2,136)
State 440 (38) (233)
------- -------- -------
4,520 (367) (2,369)
------- -------- -------
$ 78,045 $ 61,369 $ 46,066
======== ======== ========

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The company believes
that, based upon its lengthy and consistent history of profitable operations, it
is probable that the net deferred tax assets of $74.5 million will be realized
on future tax returns, primarily from the generation of future taxable income.
Significant components of the deferred income tax liabilities and assets were as
follows:

October 31, October 25,
(In Thousands) 1998 1997
----------- -----------
Deferred tax liabilities:
Tax over book depreciation .............. $(31,364) $(32,513)
Prepaid pension ......................... (21,631) (16,389)
Other, net .............................. (14,475) (9,714)

Deferred tax assets:
Vacation accrual ........................ 4,207 4,171
Insurance accruals ...................... 5,072 4,489
Deferred compensation ................... 7,171 6,586
Postretirement benefits ................. 96,227 94,344
Pension accrual ......................... 13,776 12,484
Other, net .............................. 15,517 17,376
------ ------
Net deferred tax assets .................... $ 74,500 $ 80,834
======== ========

Reconciliation of the statutory federal income tax rate to the company's
effective tax rate is as follows:

1998 1997 1996
---- ---- ----

U.S. statutory rate ................................. 35.0% 35.0% 35.0%
State taxes on income, net of federal tax benefit ... 3.1 3.6 4.7
All other, net ...................................... (2.2) (2.7) (3.0)
----- ----- -----
Effective tax rate .................................. 35.9% 35.9% 36.7%
===== ===== =====

Total income taxes paid during fiscal 1998, 1997 and 1996 were $76.5 million,
$66.5 million and $38.3 million, respectively.

End of Page 28

<PAGE>

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NOTE H. COMMITMENTS AND CONTINGENCIES

In order to ensure a steady supply of hogs and turkeys and to keep the cost of
products stable, the company has entered into contracts with producers for the
purchase of hogs and turkeys at formula based prices over periods of up to 15
years. Under these contracts, the company is committed at October 31, 1998, to
purchase hogs and turkeys, assuming current price levels as follows:

(In Thousands)
1999 ............................ $ 628,639
2000 ............................ 589,281
2001 ............................ 567,890
2002 ............................ 562,894
2003 ............................ 493,185
Later years ..................... 1,575,314
----------
Total ........................... $4,417,203

Estimated purchases under these contracts for fiscal 1998, 1997 and 1996 were
$514.4 million, $422.1 million and $367.4 million, respectively. The company has
noncancelable operating lease commitments on facilities and equipment at October
31, 1998, as follows:

(In Thousands)
1999 .............................. $6,674
2000 .............................. 5,561
2001 .............................. 4,472
2002 .............................. 2,912
2003 .............................. 2,479
Later years ....................... 9,257
-------
Total ............................. $31,356

The company has commitments to expend approximately $57.8 million to complete
construction in progress at various locations at October 31, 1998. The company
has also pledged $24.9 million of government securities as collateral
guaranteeing a loan at October 31, 1998.

The company is involved on an ongoing basis in litigation arising in the
ordinary course of business. In the opinion of management, the outcome of
litigation currently pending will not materially affect the company's results of
operations, financial condition or liquidity.

NOTE I. STOCK OPTIONS

The company has stock option plans for employees and nonemployee directors. The
company's policy is to grant options with the exercise price equal to the market
price of the common stock on the date of grant. The company follows APB Opinion
No. 25, "Accounting for Stock Issued to Employees," and related interpretations
in accounting for its employee stock options. Under APB Opinion No. 25, when the
exercisable price of employee stock options equals the underlying stock on the
date of grant, no compensation expense is recorded. Options are exercisable upon
grant and expire at various dates ranging from fiscal 2001 to 2008.

Following is a summary of stock option activity:

Weighted- Average
Shares Option Price
(In Thousands) ------ -----------------

Balance October 28, 1995 .................... 1,961 $ 22.05
Granted ................................... 764 23.88
Exercised ................................. (165) 19.30
------ ---------
Balance October 26, 1996 .................... 2,560 22.78
Granted ................................... 8 23.88
Exercised ................................. (22) 21.57
------ ---------
Balance October 25, 1997 .................... 2,546 22.79
Granted ................................... 413 29.39
Exercised ................................. (187) 20.96
------ ---------
Balance October 31, 1998 .................... 2,772 $ 23.90

Pro forma information regarding net earnings and earnings per share is required
by SFAS No. 123, assuming the company accounted for its employee stock options
using the fair value method. The fair value of options was estimated at the date
of the grant using the Black-Scholes option-pricing model with the following
weighted-average assumptions for 1998, 1997 and 1996, respectively: risk free
interest rate of 4.5%, 5.9% and 6.0%; a dividend yield of 2.0%; expected
volatility of 24.3%, 22.2% and 22.2%; and an expected option life of seven
years. The weighted-average fair value of options granted in fiscal 1998, 1997
and 1996 was $8.53, $8.17 and $8.17, respectively. Exercise prices ranged from
$19.75 to $33.25 with a remaining average contractual life of seven years at
October 31, 1998. Pro forma net earnings and basic earnings per share are as
follows (because SFAS No. 123 is applicable only to options granted subsequent
to fiscal 1995, its pro forma effect will not be fully reflected until fiscal
2000):

1998 1997 1996
(In Thousands, Except Per Share Amounts) --------- --------- --------

Pro forma net earnings .................. $ 137,036 $ 109,454 $ 75,760
Pro forma basic earnings per share ...... 1.82 1.43 .99
Basic earnings per share--as reported ... 1.86 1.43 1.04

The number of shares available for future grants were 639,727; 1,214,606; and
1,986,606 at October 31, 1998, October 25, 1997, and October 26, 1996,
respectively.

End of Page 29

<PAGE>

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NOTE J. RESTRUCTURING CHARGE

The company recorded an $8.7 million restructuring charge ($5.4 million after
tax or $.07 per share) in the fourth quarter of 1996 related to the exit from
its catfish business. The restructuring charge included accruals related to the
estimated costs associated with closing the fish farms and processing plants and
liquidating the business. The amount accrued included $3.6 million to close the
farms and fish processing plants, $2.7 million and $1.7 million of write-downs
to estimated net realizable value related to fixed assets and live fish
inventory, respectively, and $600,000 of employee related costs.

Although the accruals that were established in 1996 were based upon a complete
business liquidation which was likely at the time, the company was ultimately
able to sell the catfish business in 1997. The sale of the catfish business
resulted in a change in estimate of the restructuring accrual to $3.5 million,
requiring the reversal of $5.2 million ($3.2 million after-tax or $.04 per
share) of the reserve in 1997.

NOTE K. QUARTERLY RESULTS OF OPERATIONS (Unaudited)

The following tabulations reflect the unaudited quarterly results of operations
for the years ended October 31, 1998, and October 25, 1997, (the total of
quarterly diluted earnings per share amounts for fiscal 1998 does not agree to
the total for the year due to the calculation of the weighted-average shares
outstanding for the quarter as compared to the weighted-average shares
outstanding for the year):

(In Thousands, Diluted
Except Per Gross Net Earnings
Share Amounts) Net Sales Profit Earnings Per Share
--------- ---------- ---------- ---------
1998
- ----
First quarter ........ $ 814,914 $ 209,718 $ 46,849 $ 0.61
Second quarter ....... 778,325 200,516 26,296 0.34
Third quarter ........ 755,769 194,625 20,994 0.28
Fourth quarter ....... 912,037 255,853 45,152 0.61
---------- ---------- ---------- -------
$3,261,045 $ 860,712 $ 139,291 $ 1.85
1997
- -----
First quarter ........ $ 810,309 $ 183,509 $ 20,982 $ 0.27
Second quarter ....... 798,455 189,614 25,688 0.33
Third quarter ........ 779,679 170,153 18,153 0.24
Fourth quarter ....... 868,108 215,613 44,669 0.59
---------- ---------- ---------- -------
$3,256,551 $ 758,889 $ 109,492 $ 1.43

REPORT OF INDEPENDENT AUDITORS

To the Shareholders and Board of Directors
Hormel Foods Corporation
Austin, Minnesota

We have audited the accompanying consolidated statements of financial position
of Hormel Foods Corporation and subsidiaries as of October 31, 1998 and October
25, 1997, and the related consolidated statements of operations, changes in
shareholders' investment and cash flows for each of the three years in the
period ended October 31, 1998. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Hormel Foods
Corporation and subsidiaries at October 31, 1998 and October 25, 1997, and the
consolidated results of its operations and its cash flows for each of the three
years in the period ended October 31, 1998, in conformity with generally
accepted accounting principles.

Minneapolis, Minnesota
November 23, 1998

End of Page 30

<PAGE>

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

(In Thousands of Dollars, Except Per Share Amounts)

A major goal of the company for a number of years has been to expand its line of
consumer-branded products. One result of increased sales of branded products is
reduced exposure to fluctuating commodity prices. While progress has been made
in reaching this objective, price fluctuations for pork, the company's major raw
material, still had an impact on results in 1998 and 1997.

FISCAL YEARS 1998 AND 1997:
- ---------------------------

During 1998, hog producers brought the largest supply of live hogs to market in
history. This huge supply of hogs has produced near-record, low-market prices
for live hogs on the spot cash market. A significant portion of the resulting
positive effect of lower raw material prices on company margins was offset by
long-term supply agreements designed to buy hogs through purchasing contracts
rather than the spot cash market. While the company's cost for live hogs was
lower than in 1997, it was not as low as would be indicated by the spot cash
market. Purchasing contracts are used by the company as a means of assuring a
stable supply of raw materials while minimizing extreme fluctuation in costs
over the long-term.

During much of 1998, live market prices were below the floor levels guaranteed
by our contracts. These contract costs, which have been higher than spot market
prices, have been fully reflected in the company's reported financial results.
As live hog prices rebound during the term of these contracts, the company's
cost for hogs will be less than the spot market to the extent that it exceeds
contract prices.

Earnings for the year increased 27.2 percent to $139,291 from $109,492 in 1997.
Results for 1998 include an after-tax gain of $17,402 for the sale of the
company's Davenport, Iowa, gelatin plant to Goodman Fielder Limited, Sydney,
Australia. Excluding this one-time gain, company earnings of $121,889 exceeded
1997 by 11.3 percent. Net sales for the year of $3,261,045 were virtually
unchanged from 1997 sales of $3,256,551. Tonnage volume increased 10.3 percent
compared to last year. Fiscal 1998 was a 53-week year compared to a 52-week year
in 1997.

Earnings for the fourth quarter were $45,152, an increase of 1.1 percent over
earnings of $44,669 for the same period last year. Sales for the quarter were
$912,037, a 5.1 percent increase from $868,108 in 1997. Tonnage for the quarter
increased 18.2 percent compared to last year.

The company's core branded business continues to be the major contributor to
earnings. All major divisions experienced volume growth which in many cases
exceeded category growth. Increased market share and distribution successes by
some of the company's best-known brands resulted in record profits for the
Foodservice, Meat Products and Prepared Foods Groups.

International's export tonnage for the year increased 8.0 percent from 1997.
Major growth areas included fresh pork, Jennie-O turkey products and Stagg
chili. The Beijing, China, joint venture began operations in February. Both the
Beijing venture and the Shanghai venture, which came on line in 1997, continue
to experience gains in distribution and volume. The profitability of the equity
investment in Campofrio during the fourth quarter was negatively impacted by the
depressed Russian economy.

Jennie-O tonnage for 1998 increased 23.3 percent over 1997. Profitability was
below expectations as highly competitive selling prices reduced margins.
Jennie-O's efficient operations and continuing growth in distribution and volume
of value-added turkey products should position the company to return to more
historical margins when competitive pressure on selling prices moderates.

Selling and delivery expenses for the fourth quarter and year were $102,028 and
$328,050, respectively, as compared to $74,210 and $297,294 last year. As a
percentage of sales, selling and delivery expenses increased to 11.2 and 10.1
percent for the quarter and year compared to 8.6 and 9.1 in 1997. The increase
in these expenses is consistent with the increase in tonnage volume for the
quarter and year.

Marketing expenses increased to $77,232 for the quarter and $276,826 for the
year compared to $51,063 and $217,637 last year. These expenditures emphasize
the company's continued commitment to expanding its base of branded consumer
products. As a percentage of sales, marketing expenses increased to 8.5 from 5.9
percent for the quarter and to 8.5 from 6.7 percent for the year.

Administrative and general expenses were $10,813 and $72,331 for the quarter and
year, respectively, compared to $24,744 and $75,788 in 1997. As a percentage of
sales, administrative and general expenses for the quarter and year were 1.2 and
2.2 percent compared to 2.9 and 2.3 percent in 1997. The change in expenses
between the two quarters was due to a decrease in pension expenses.

Research and development continues to be an important part of the company's
strategy to extend existing brands and expand its offerings of new
consumer-branded items. Recognizing the importance of developing, maintaining
and protecting its intangible asset base of trademarks, brands and patents, the
company during 1998 moved its research activities and responsibility for its
intangible assets into a new subsidiary, Hormel Foods L.L.C. Research and
development expenses for the quarter and year were $2,412 and $9,037,
respectively, compared to $2,212 and $8,580 for the same periods last year.

The company's effective tax rate was unchanged at 35.9 percent for 1998 and
1997.

FISCAL YEARS 1997 AND 1996:
- ---------------------------

Record high feed grain costs experienced in 1996 moderated somewhat in 1997 but
remained above historic levels. Although the company was able to improve margins
in 1997, high raw material costs did not allow the return to pre-1996 margin
levels.

Earnings for the year increased 37.9 percent to $109,492 from $79,408 in 1996.
Net sales in 1997 increased 5.1 percent to $3,256,551 from $3,098,685 the
previous year. Tonnage for the year decreased 0.5 percent compared to 1996.

Earnings for the fourth quarter of 1997 were $44,669, an increase of 47.9
percent over earnings of $30,211 for the same period in 1996. Sales for the
quarter were $868,108, a 1.1 percent decrease from $877,775 in 1996. Tonnage
declined 1.2 percent in 1997 compared to the previous year.

The drop in tonnage for both the quarter and year was a result of reduced
commodity pork sales and the sale of Farm Fresh Catfish Company during 1997. The
increase in earnings, while sales dollars and tonnage either improved marginally
or declined, is due to a product mix which included a larger proportion of
higher margin consumer-processed items.

Tonnage volume in the Grocery Products Division was up 4.5 percent for the year,
due primarily to the Stagg Foods acquisition. The Meat Products Group completed
the year with tonnage growth exceeding 12.0 percent, continuing the trend of
increased sales of value-added product versus commodity product. Tonnage of the
Foodservice Group was up 12.0 percent for the year.

In the international area, the company purchased a 21.4 percent equity interest
in Campofrio Alimentacion, S.A. in Spain. Construction projects of the China
joint ventures continued as scheduled. The venture in Shanghai began production
in October 1997. The Beijing venture is scheduled to begin production in January
1998. International tonnage for 1997 increased 26.9 percent over 1996.

Jennie-O tonnage increased 12.0 percent in 1997 with sales dollar growth
exceeding 14.0 percent compared to 1996. While tonnage and sales dollars were
up, high feed costs for the year continued the squeeze on historical margins
that began in 1996. In October 1997, Jennie-O acquired the assets of Heartland
Foods in Marshall, Minnesota.

In 1996, the company announced it would exit the catfish business and
established an after-tax restructuring reserve of $5,400. The sale of Farm Fresh
Catfish assets in 1997 resulted in a favorable after-tax reduction of the
reserve in the amount of $3,200.

End of Page 31

<PAGE>

Beginning of Page 32

Selling and delivery expenses for the quarter and year were $125,273 and
$514,931, respectively, as compared to $124,285 and $503,108 last year. As a
percentage of sales, selling and delivery expenses decreased slightly to 15.8
percent from 16.2 percent in 1996. Marketing expenses increased to $51,063 for
the quarter and $217,637 for the year compared to $49,079 and $209,021 last
year.

Administrative and general expenses were $24,744 and $75,788 for the quarter and
year, respectively, compared to $20,570 and $75,659 in 1996. As a percentage of
sales, administrative and general expenses for the year decreased slightly to
2.3 percent from 2.4 percent last year.

The company's effective tax rate decreased to 35.9 percent from 36.7 percent in
1996. The reduction is due in part to increased affordable housing tax credits,
foreign equity earnings which are net of tax, a favorable completion of a
federal tax audit and a decrease in state and local taxes.

LIQUIDITY:
- ----------

The company continues to have an exceptionally strong balance sheet.
Cash and cash equivalents and short-term marketable securities were $238,032 at
the end of 1998, compared to $152,386 last year. Long-term debt consists of
small issue Industrial Revenue Bonds of varying maturities, debt used for
investment in the Federal Affordable Housing Program, $110,000 in Senior Notes
maturing in 2002 and 2006 and $59,200 of long-term notes denominated in Spanish
pesetas, used to purchase a 21.4 percent equity interest in Campofrio in Spain.
The strong balance sheet provides the company with the ability to take advantage
of expansion or acquisition opportunities that may arise.

During 1998, cash provided by operating activities was $229,020, compared to
$162,489 last year. The increase in cash provided by operating activities was
the result of an increase in net earnings, excluding the one-time gain and
changes in working capital items, which were in the normal course of business.

Cash required for investing activities in 1998 decreased to $58,825 from
$185,054 in 1997. The decrease in cash required for investing activities
reflects the completion in 1997 of several construction projects primarily at
Hormel Foods and Jennie-O Foods, the cash required last year for the equity
investment in Campofrio and the cash received on the sale of the Davenport
gelatin plant. At the end of the year, the company had commitments to expend
approximately $57,800 to complete construction in progress at various locations.

During the year, the company repurchased 2,251,600 shares of its common stock at
an average price per share of $33.98, completing an initial share repurchase
plan authorized in 1996. The company's Board of Directors authorized a second
share repurchase plan in September of 1998. During the fourth quarter, 119,400
shares were repurchased under the new plan at an average price per share of
$29.81.

Financial ratios for 1998 and 1997 are presented below:

1998 1997
---- ----
LIQUIDITY RATIOS
Current ratio ............................. 2.7 2.6
Receivables turnover ...................... 14.3 14.0
Days sales in receivables ................. 25.4 26.2
Inventory turnover ........................ 9.5 9.3
Days sales in inventory ................... 37.1 38.8

LEVERAGE RATIO
Long-term debt to equity .................. 25.9% 25.3%

OPERATING RATIOS
Pretax profit to net worth ................ 26.9% 21.5%
Pretax profit to total assets ............. 14.1% 11.5%

YEAR 2000:
- ----------

For many years, internally developed software has been developed so as to
eliminate the need for revision in the Year 2000. Less than 5.0 percent of this
category of software remains to be updated and will be completed by January 1,
2000.

The company has an ongoing process to review the impact of Year 2000 on key
suppliers and customers and on outside developed software that runs on company
computers or is contained within processing equipment. Changes to correct
potential problems identified by this assessment process are 80 percent
complete. All required changes will be complete by January 1, 2000.

The company has queried its significant outside suppliers and customers as to
their exposure to Year 2000 problems. The company is not aware of any outside
supplier or customer with a Year 2000 issue that would materially impact the
company's results of operations. However, the company has no means of ensuring
that outside suppliers and customers will be Year 2000 ready.

The company does not anticipate delays in finalizing Year 2000 changes and does
not have contingency plans for such a possibility. The total historical or
anticipated remaining costs to remediate Year 2000 problems are not material.

MARKET RISK:
- ------------

The principal market risk affecting the company is the exposure to changes in
interest rates on the company's fixed-rate, long-term debt. Market risk for
fixed-rate, long-term debt is estimated as the potential increase in fair value
resulting from a hypothetical 10 percent decrease in interest rates and amounts
to approximately $3.9 million. The fair values of the company's long-term debt
were estimated using discounted future cash flows based on the company's
incremental borrowing rates for similar types of borrowings arrangements.

While the company does have international operations, and operates in
international markets, it considers its market risk in such activities to be
immaterial.

RESPONSIBILITIES FOR FINANCIAL STATEMENTS

The accompanying financial statements were prepared by the management of Hormel
Foods Corporation which is responsible for their integrity and objectivity.
These statements have been prepared in accordance with generally accepted
accounting principles appropriate in the circumstances and, as such, include
amounts that are based on our best estimates and judgments.

Hormel Foods Corporation has developed a system of internal controls designed to
assure that the records reflect the transactions of the company and that the
established policies and procedures are adhered to. This system is augmented by
well-communicated written policies and procedures, a strong program of internal
audit and well-qualified personnel.

These financial statements have been audited by Ernst & Young LLP, independent
auditors, and their report appears on page 30. Their audit is conducted in
accordance with generally accepted auditing standards and includes a review of
the company's accounting and financial controls and tests of transactions.

The Audit Committee of the Board of Directors, composed solely of outside
directors, meets periodically with the independent auditors, management and the
internal auditors to assure that each is carrying out its responsibilities. Both
Ernst & Young LLP and our internal auditors have full and free access to the
Audit Committee, with or without the presence of management, to discuss the
results of their audit work and their opinions on the adequacy of internal
controls and the quality of financial reporting.

Joel W. Johnson Don J. Hodapp
Chairman of the Board Executive Vice President
President and Chief Executive Officer Chief Financial Officer

End of Page 32

<PAGE>

Beginning of Page 33

SHAREHOLDER INFORMATION:
<TABLE>
<CAPTION>
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Ending Jan. 30 Ending May 1 Ending July 31 Ending Oct. 30
-------------- ------------ -------------- --------------
DIVIDENDS
(estimated dates)
<S> <C> <C> <C> <C>
Declaration Date ... Nov. 23, 1998 March 22, 1999 May 24, 1999 Oct. 4, 1999
Ex-Dividend Date ... Jan. 20, 1999 April 14, 1999 July 21, 1999 Oct. 20, 1999
Record Date ........ Jan. 23, 1999 April 17, 1999 July 24, 1999 Oct. 23, 1999
Payable Date ....... Feb. 15, 1999 May 15, 1999 Aug. 15, 1999 Nov. 15, 1999

QUARTERLY EARNINGS
RELEASES/QUARTERLY
REPORTS
(Estimated Date) ... Feb. 18, 1999 May 20, 1999 Aug. 19, 1999 *Nov. 24, 1999

</TABLE>

CORPORATE HEADQUARTERS
Hormel Foods Corporation
1 Hormel Place
Austin, MN 55912-3680
(507) 437-5611

INTERNET
Hormel Foods Corporation has a presence on the Internet through two sites:
www.hormel.com and www.spam.com.

INDEPENDENT AUDITORS
Ernst & Young LLP
1400 Pillsbury Center
Minneapolis, MN 55402-1491

COMMON STOCK DATA

The high and low closing price of the company's common stock and the dividends
per share declared for each fiscal quarter of 1998 and 1997, respectively, are
shown below:

1998 High Low Dividend
---- -------- -------- --------
First Quarter ........... 32 15/16 28 5/8 $ .16
Second Quarter .......... 38 7/8 32 11/16 $ .16
Third Quarter ........... 36 15/16 32 1/16 $ .16
Fourth Quarter .......... 34 1/2 26 3/16 $ .16

1997 High Low Dividend
---- -------- -------- ---------

First Quarter ........... 27 7/8 23 1/2 $ .155
Second Quarter .......... 27 23 7/8 $ .155
Third Quarter ........... 28 7/16 23 7/8 $ .155
Fourth Quarter .......... 32 1/2 28 1/16 $ .155

STOCK LISTING

Hormel Foods Corporation's common stock is traded on the New York Stock
Exchange. The company's symbol is HRL and is often shown as Hormel in the New
York Stock Exchange listing found in the financial section of most daily
newspapers. Here, shareholders are able to find the corporation's daily trading
activity, stock price and dividend information.

TRANSFER AND REGISTRAR AGENT

Norwest Bank Minnesota, N.A.
161 North Concord Exchange
P.O. Box 64854
South St. Paul, MN 55164-0854

For the convenience of shareholders, a toll-free number (1-800-468-9716) can be
used whenever questions arise regarding changes in registered ownership, lost or
stolen certificates, address changes or other matters pertaining to the transfer
of stock or shareholder records. When requesting information, shareholders must
provide their tax identification number, the name(s) in which their stock is
registered and their record address.

If you hold stock in more than one account, duplicate mailings of financial
information may result. You can help eliminate the added expense by requesting
only one copy be sent. Please supply the transfer agent with the names in which
all accounts are registered and the name of the account for which you wish to
receive mailings. This will not in any way affect dividend check mailings.

Hormel Foods Corporation's DIVIDEND REINVESTMENT PLAN, available to record
shareholders, allows for full dividend reinvestment and voluntary cash purchases
with brokerage commissions or other service fees paid by the company. AUTOMATIC
DEBIT FOR CASH CONTRIBUTION is also available. This is a convenient method to
have money automatically withdrawn each month from a checking or savings account
and invested in your DIVIDEND REINVESTMENT PLAN account. To enroll in the plan
or obtain additional information, contact Norwest Bank Minnesota, N.A., using
the address or telephone number provided with its listing in this section as
company transfer agent and registrar.

An optional DIRECT DIVIDEND DEPOSIT service offers shareholders a convenient
method of having quarterly dividend payments electronically deposited into their
personal checking or savings account. The dividend payment is made in the
account each payment date, providing shareholders with immediate use of their
money. For information about the service and how to participate, contact Norwest
Bank Minnesota, N.A., transfer agent.

DIVIDENDS

The declaration of dividends and all dates related to the declaration of
dividends are subject to the judgment and discretion of the Board of Directors
of Hormel Foods Corporation. Therefore, there can be no assurance the events
indicated in the tableat left will occur or occur on the indicated dates. The
Declaration Date is the day on which the Board of Directors votes to declare the
dividend. The Ex-Dividend Date is the date which the New York Stock Exchange
sets to quote the price of the stock without the dividend. The Record Date is
the date on which you must be a shareholder of record on the company's books to
receive the dividend. The Payable Date closely follows the day of mailing of the
checks. If a check is not received on this date, please wait at least one week
to allow for possible postal delays before contacting the company.

REPORTS AND PUBLICATIONS

Copies of the company's Form 10-K annual report to the Securities and Exchange
Commission (SEC), the Form 10-Q quarterly reports to the SEC, proxy statement,
quarterly earnings releases and other printed corporate literature are available
free of charge upon request. Telephone (507) 437-5164 or access financial and
other information on the Internet at www.hormel.com.

*As part of our ongoing effort to reduce costs, and recognizing the company's
Annual Report to Shareholders is mailed approximately one month following the
fourth quarter earnings release date, no quarterly report will be produced and
mailed to shareholders. If desired, shareholders may contact (507) 437-5164 to
obtain a copy of the fourth quarter earnings release made available to both the
media and security analysts.

QUESTIONS ABOUT HORMEL FOODS

Shareholder Inquiries
(507) 437-5669

Analyst/Investor Inquiries
(507) 437-5950

Media Inquiries
(507) 437-5345

ANNUAL MEETING

The Annual Meeting of Shareholders will be held Tuesday, January 26, 1999, in
the Richard L. Knowlton Auditorium at Austin (Minn.) High School. The meeting
will convene at 8:00 p.m.

CONSUMER AFFAIRS

Inquiries regarding products of Hormel Foods Corporation should be addressed:

Consumer Affairs Department
Hormel Foods Corporation
1 Hormel Place
Austin, MN 55912-3680 or call 1-800-523-4635

End of Page 33 of Annual Report to Stockholders'

<PAGE>

EXHIBIT 23

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in this Annual Report (Form 10K) of
Hormel Foods Corporation of our report dated November 23, 1998, included in the
1998 Annual Report to Stockholders of Hormel Foods Corporation.

Our audits also included the financial statement schedule of Hormel Foods
Corporation listed in Item 14(a). This schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

We also consent to the incorporation by reference in Registration Statement
Number 333-17327 on Form S-3 dated December 5, 1996, in Post-Effective Amendment
Number 2 to Registration Statement Number 33-14614 on Form S-8 dated December 6,
1988, in Registration Statement Number 33-14615 on Form S-8 dated May 27, 1987,
in Post-Effective Amendment Number 1 to Registration Number 33-29053 dated
January 26, 1990, in Registration Statement Number 33-43246 on Form S-8 dated
October 10, 1991, and in Registration Statement Number 33-45408 on Form S-8
dated January 31, 1992, of our report dated November 23, 1998, with respect to
the consolidated financial statements incorporated herein by reference, and our
report included in the preceding paragraph with respect to the financial
statement schedule included in this Annual Report (Form 10-K) of Hormel Foods
Corporation.

/s/ERNST & YOUNG LLP

Minneapolis, Minnesota
January 29, 1999

<PAGE>

HOMEL FOODS CORPORATION PROXY FOLLOWS.

HORMEL FOODS CORPORATION
AUSTIN, MINNESOTA

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To The Stockholders:

Notice is hereby given that the Annual Meeting of Stockholders of Hormel
Foods Corporation, a Delaware corporation, will be held in the Richard L.
Knowlton Auditorium of the Austin High School, Austin, Minnesota, on Tuesday,
January 26, 1999, at 8:00 p.m. for the following purposes:

1. To elect a board of 14 directors for the ensuing year.

2. To vote on ratification of appointment, by the Board of Directors, of Ernst
& Young as independent auditors for the fiscal year which will end October
30, 1999.

3. To transact such other business as may properly come before the meeting.

The Board of Directors has fixed December 7, 1998, at the close of business,
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the Annual Meeting.

By order of the Board of Directors

T. J. LEAKE
Secretary

December 30, 1998

<PAGE>

HORMEL FOODS CORPORATION
1 HORMEL PLACE
AUSTIN, MINNESOTA 55912

PROXY STATEMENT

The enclosed proxy is solicited by the Board of Directors of the Company for
use at the Annual Meeting of Stockholders to be held on January 26, 1999. The
shares represented by the enclosed proxy will be voted in accordance with the
stockholder's directions if the proxy is duly executed and returned prior to the
meeting. If no directions are specified, the shares will be voted for the
election of directors recommended by the Board of Directors, and for the
appointment of Ernst & Young as independent auditors for the next fiscal year.
Any person giving a proxy may revoke it at any time before it is exercised by
contacting the Secretary of the Company.

The expenses of soliciting proxies will be paid by the Company. If it
appears necessary or advisable, proxies may be solicited at Company expense
personally, or by telephone or telecopy, by directors, officers and other
employees who will not receive additional compensation. The Company will also
reimburse brokerage firms, and other custodians, nominees and fiduciaries, for
their reasonable out-of-pocket expenses in sending proxy materials to beneficial
owners. Your cooperation in promptly signing and returning the enclosed proxy
will help to avoid additional expense.

The Company had 73,495,146 shares of Common Stock outstanding as of December
7, 1998. Each share of stock is entitled to one vote. The Company has no other
class of shares outstanding. Only common stockholders of record at the close of
business as of December 7, 1998, are entitled to notice of, and to vote at, the
Annual Meeting of Stockholders. A majority of the outstanding shares will
constitute a quorum at the meeting. Abstentions and broker nonvotes are counted
for purposes of determining the presence or absence of a quorum for the
transaction of business. Shares represented by abstentions are counted in the
same manner as shares submitted with a "withheld" or "no" vote in tabulations of
the votes cast on proposals presented to stockholders, whereas shares
represented by broker nonvotes are deemed not present, and therefore, not
counted for purposes of determining whether a proposal has been approved. This
proxy statement and form of proxy are being mailed to stockholders on or about
December 30, 1998.

STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING

Any stockholder intending to present a proposal at the Annual Meeting of
Stockholders to be held in 2000 must arrange to have the proposal delivered to
the Company not later than September 1, 1999, in order to have the proposal
considered for inclusion in the proxy statement and the form of proxy for that
meeting.

Additionally, the Company's Bylaw 5 provides certain requirements which must
be met in order for a stockholder to bring any business or nominations for
election as Directors for consideration at the annual meeting of stockholders,
whether or not the business or nomination is requested to be included in the
proxy statement and proxy. Those requirements include a written notice to the
Secretary of the Company to be received at the Company's principal executive
offices at least ninety (90) days before the date that is one year after the
prior year's annual meeting. Management intends to use its discretionary proxy
authority to vote against any stockholder proposal for which such notice is not
provided. For business or nominations intended to be brought to the Annual
Meeting of Stockholders to be held in 2000, that date is October 27, 1999.

ELECTION OF DIRECTORS

It is intended that the persons named as proxies in the enclosed proxy will
vote for the election of the 14 nominees named below to hold office as directors
until the next Annual Meeting of Stockholders and until their successors are
elected and qualify. In the event any of such nominees should become unavailable
for any reason, which the Board of Directors does not anticipate, it is intended
that the proxies will vote for the election of such substitute persons, if any,
as shall be designated by the Board of Directors. Directors are elected by a
plurality of the votes cast. The fourteen candidates receiving the highest
number of votes will be elected.
<PAGE>

NOMINEES FOR DIRECTORS
<S> <C> <C> <C>

Principal Year
Occupation First
and Five Year Became a
Name Age Business Experience Director

JOHN W. ALLEN, Ph.D. 68 Professor and Director of the Food 1989
Industry Alliance,Michigan State University

JOHN R. BLOCK 63 President, Food Distributors International; 1997
Farming Partnership with son; Former United
States Secretary of Agriculture

ERIC A. BROWN* 52 Group Vice President Prepared Foods Group 1997
since 1997; Senior Vice President, Meat
Products 1993 to 1997; Vice President,
Grocery Products 1987 to 1993

WILLIAM S. DAVILA 67 President Emeritus of The Vons Companies,Inc. 1993

DAVID N. DICKSON* 55 Group Vice President, International and 1990
Corporate Development

E. PETER GILLETTE,JR. 64 Retired President, Piper Trust Company; 1996
President, Piper Trust Company from 1995
to 1998; Commissioner of Minnesota's Depart-
ment of Trade and Economic Development from
1991 to 1995; Former Vice Chairman, Norwest
Corporation

LUELLA G. GOLDBERG 61 Trustee Emerita, Wellesley College; Life 1993
Director, Minnesota Orchestral Association;
Senior Vice President, University
of Minnesota Foundation; Member, Board of
Overseers, University of Minnesota Carlson
School of Management; Chair, Board of Trustees,
University of Minnesota Foundation, 1996 to
1998; Trustee, Wellesley College, 1978 to
1996; Chair, Board of Trustees, Wellesley
College, 1985 to 1993; Acting President,
Wellesley College, July 1, 1993 to
October 1, 1993

DON J. HODAPP* 60 Executive Vice President and Chief Financial 1986
Officer

JOEL W. JOHNSON* 55 Chairman, President and Chief Executive 1991
Officer since 1995; President and Chief
Executive Officer, 1993 to 1995; President
and Chief Operating Officer, 1993; President,
1992 to 1993

GERALDINE M. JOSEPH 75 Chair, Advisory Committee, Hubert H. 1974-1978
Humphrey Institute of Public Affairs;
Director, Minnesota International Center;
Senior Fellow Emerita, Hubert H. Humphrey 1981
Institute of Public Affairs; Director,
German Marshall Fund of the U.S., 1989 to
1997; Former United States Ambassador to the
Netherlands

STANLEY E. KERBER* 61 Group Vice President, Meat Products Group 1990

JOSEPH T. MALLOF 47 President, Americas and South Asia, S.C. 1997
Johnson & Sons, Inc. since 1998; President,
North American Consumer Products, S.C.
Johnson & Son, Inc. 1997 to 1998; Executive
Vice President, North American Consumer
Products, S.C. Johnson & Son, Inc. 1995-1997;
Vice President and General Manager, Laundry
and Paper Products, Japan, Procter & Gamble,
Inc. 1991-1995
<PAGE>

GARY J. RAY* 52 Executive Vice President of Operations 1990

ROBERT R. WALLER,M.D. 61 Professor of Ophthalmology, Mayo Medical 1993
School; President and Chief Executive Officer,
Mayo Foundation 1988 to 1998; President
Emeritus, Mayo Foundation since 1999; Executive
Committee Chair, Board of Trustees, Mayo
Foundation 1988 to 1998; Chair, Mayo Foundation
for Medical Education and Research 1988 to 1998
</TABLE>

*Messrs. Brown, Dickson, Hodapp, Johnson, Kerber, and Ray are members of
the Executive Committee of the Board of Directors.

Dr. Allen is a member of the Board of Directors of Alliance Associates,
Inc., Coldwater, Michigan.

Mr. Block is a member of the Board of Directors of Deere & Company, Moline,
Illinois, and Archer-Daniels-Midland
Company, Decatur, Illinois.

Mr. Davila is a member of the Board of Directors of Wells Fargo Bank, San
Francisco, California, and Pacific Gas and Electric, San Francisco, California.

Mrs. Goldberg is a member of the Board of Directors of Reliastar Financial
Corporation, and TCF Financial Corporation, all of Minneapolis, Minnesota, and
of Communications Systems, Inc., Hector, Minnesota.

Mr. Johnson is a member of the Board of Directors of Meredith Corporation,
Des Moines, Iowa, and Ecolab Inc., St. Paul, Minnesota.

No family relationship exists between any of the nominees for director of
the Company.

COMPENSATION OF DIRECTORS

Directors who are not employees of the Company receive a retainer of $25,000
and $1,200 for attendance at each Board Meeting. In addition, a fee of $1,000 is
paid for attendance at committee meetings. The Chairpersons of the Audit,
Compensation, and Nominating Committees each receive an additional $2,000 per
year. Additionally, each February 1, each nonemployee director receives a grant
of 2,000 options with an exercise price equal to the fair market value of one
share of Common Stock on the date of grant, and an award of $5,000 worth of
Restricted Shares. Directors who are employees of the Company receive $100 for
each Board Meeting they attend, which has remained unchanged since 1934.

COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS

The Board of Directors met seven times during the last fiscal year. Six of
these meetings were regularly scheduled meetings, and one was a special meeting.

The Company has Audit, Personnel, Compensation, Nominating, and Employee
Benefits Committees of the Board of Directors.

The Audit Committee members are Mrs. Joseph, Chairperson, Dr. Allen, Mr.
Davila, and Mr. Block. The Committee met three times during the last fiscal
year. The Audit Committee reviews the arrangement and scope of the audit,
reviews the activities and recommendations of the Company's internal auditors,
considers comments by the independent accountants with respect to the adequacy
of internal control procedures and the consideration given or the corrective
action taken by management, reviews internal accounting procedures and controls
with the Company's financial and accounting staff and reviews nonaudit services
provided by the Company's independent accountants.
<PAGE>

The Company has a Personnel Committee consisting of Mr. Johnson,
Chairperson, Dr. Allen, Mr. Mallof, and Dr. Waller. This Committee deals, among
other things, with matters of management positions and the succession of
management. The Committee met once during the last fiscal year.

The Company has a Compensation Committee consisting of Mr. Davila,
Chairperson, Mr. Gillette, and Mr. Mallof. The primary function of this
Committee is to establish compensation arrangements for all officers of the
Company and other senior management personnel. The Committee met twice during
the last fiscal year. The Company has a Nominating Committee, consisting of Dr.
Waller, Chairperson, Mr. Block, Mrs. Goldberg, Mr. Johnson, and Mrs. Joseph.
Board of Directors nominees are proposed by the Nominating Committee, which will
consider nominees recommended by stockholders. Stockholder recommendations
should be sent to the Secretary of the Company for forwarding to the Nominating
Committee. The Committee met once during the last fiscal year.

The Company has an Employee Benefits Committee, consisting of Mr. Hodapp,
Chairperson, Mr. Dickson, Mr. Gillette, and Mrs. Goldberg. The Committee
oversees the Company's benefit policies, the investment management of pension
funds, the adequacy of benefit reserves and controls, and compliance with
pertinent laws and regulations. The Committee met six times during the last
fiscal year.

PRINCIPAL SHAREHOLDERS

Information as to the persons or groups known by the Company to be
beneficial owners of more than five percent of the Company's voting securities,
as of October 31, 1998, is shown below:
<TABLE>
<CAPTION>

<S> <C> <C> <C>
Name and Address Amount Percent
Title of Class of Beneficial Owner Beneficially Owned of Class

Common Stock The Hormel Foundation(1) 32,031,361 43.58%
501 16th Avenue NE
Austin, MN 55912
</TABLE>

(1)The Hormel Foundation holds 2,541,331 of such shares as individual owner
and 29,490,030 of such shares as trustee of various trusts. The Hormel
Foundation, as trustee, votes the shares held in trust. The Hormel
Foundation has a remainder interest in all of the shares held in trust. The
remainder interest consists of corpus and accumulated income in various
trusts which are to be distributed when the trusts terminate upon the death
of designated beneficiaries, or upon the expiration of twenty-one years
after the death of such designated beneficiaries.

The Hormel Foundation was converted from a private to a public foundation
on December 1, 1980. The Certificate of Incorporation and Bylaws of the
Foundation provide for a Board of Directors, a majority of whom represent
nonprofit agencies to be given support by the Foundation. Each member of
the Hormel Foundation has equal voting rights.

Members of The Hormel Foundation are: Chairman, Richard L. Knowlton, retired
Chairman of the Board of Hormel Foods; Jerry A. Anfinson, Certified Public
Accountant, Austin; Mahlon S. Krueger, United Way of Mower County, Inc.; Donald
R. Brezicka, St. Olaf Hospital Administrator, representing the St. Olaf Hospital
Association, Austin; Don J. Hodapp, Executive Vice President and Chief Financial
Officer of Hormel Foods; Kermit F. Hoversten, Attorney, representing the City of
Austin; William R. Hunter, retired Executive Vice President of Hormel Foods;
James G. Huntting, Jr., retired President of Huntting Elevator Company of
Austin; Joel W. Johnson, Chairman, President and Chief Executive Officer of
Hormel Foods; James R. Mueller, Executive Director, Cedar Valley Rehabilitation
Workshop, Inc., Austin; J. Doug Myers, representing the Austin Public Education
Foundation Inc.; Raymond B. Ondov, Attorney, Austin; Mark T. Bjorlie, Executive
Director, Young Men's Christian Association, Austin; Gary J. Ray, Executive Vice
President of Hormel Foods; H. O. Schmid, Director, Hormel Institute, Austin,
representing the University of Minnesota; Robert J. Thatcher, retired Treasurer
of Hormel Foods, representing the Austin Community Scholarship Committee; and Ed
C. Wilson, Jr., Officer in Charge, The Salvation Army of Austin.

<PAGE>

SECURITY OWNERSHIP OF MANAGEMENT

Information as to beneficial ownership of the Company's equity securities by
directors, nominees, and executive officers of the Company as of October 31,
1998, is shown below:
<S> <C> <C> <C>

Name of Amount Percent
Title of Class Beneficial Owner Beneficially Owned (1) of Class

Common Stock John W. Allen (2) 10,318 *

Common Stock John R. Block (2) 1,512 *

Common Stock Eric A. Brown (2)(3)(5) 140,754 *

Common Stock William S. Davila (2) 13,677 *

Common Stock David N. Dickson (2)(5) 93,282 *

Common Stock E. Peter Gillette, Jr. (2) 3,861 *

Common Stock Luella G. Goldberg (2) 15,204 *

Common Stock Don J. Hodapp(2)(3)(4)(5) 256,499 *

Common Stock Joel W. Johnson(2)(4)(5) 398,255 *

Common Stock Geraldine M. Joseph(2)(3) 8,576 *

Common Stock Stanley E. Kerber(2)(3)(5) 148,085 *

Common Stock Joseph T. Mallof (2) 1,792 *

Common Stock Gary J. Ray(2)(3)(4)(5) 238,071 *

Common Stock Robert R. Waller, M.D. (2) 7,083 *

Common Stock All Directors and (5)(6) 2,260,829 3.08%
Executive Officers as a Group
(1)Except as otherwise indicated and subject to applicable community
property and similar statutes, the persons listed as beneficial owners
of the shares of the Company's Common Stock have sole voting and
investment power with respect to said shares. Holdings are rounded to
the nearest full share.

(2)The total number of shares of the Company's Common Stock
beneficially owned by the following persons includes the
following number of shares subject to immediately exercisable
options: Dr. Allen - 7,000; Mr. Block - 1,000; Mr. Brown -
110,000; Mr. Davila - 6,000; Mr. Dickson - 80,000; Mr. Gillette -
2,000; Mrs. Goldberg - 4,000; Mr. Hodapp - 184,000; Mr. Johnson -
380,000; Mrs. Joseph - 5,000; Mr. Kerber - 90,000; Mr. Mallof -
1,000; Mr. Ray - 184,000; and Dr. Waller - 6,000.

(3)The total number of shares of the Company's Common Stock beneficially
owned by the following nominees for election as directors includes the
following number of shares of the Company's Common Stock beneficially
owned by members of their respective households: Mr. Brown - 1,100; Mr.
Hodapp - 19,069; Mrs. Joseph - 19; Mr. Kerber - 35,966; and Mr. Ray -
1,164.

(4)Does not include any shares owned by The Hormel Foundation, of which Mr.
Johnson, Mr. Ray, and Mr. Hodapp are members.

(5)Shares listed as beneficially owned include, where applicable, shares
allocated to participants' accounts under the Hormel Tax Deferred
Investment Plan 401(k)A and the Company's Founders' Fund Plan, and a
pro-rata share of unallocated shares held in the Company's Joint
Earnings Profit Sharing Trust for the benefit of participants.

(6)As of October 31, 1998, all directors and executive officers as a group
owned beneficially 1,804,293 shares subject to immediately exercisable
options.

* Less than one percent.
</TABLE>
<PAGE>

EXECUTIVE COMPENSATION

Compensation Committee Report on Executive Compensation

The Compensation Committee (the "Committee") consists exclusively of
nonemployee directors, and is responsible for setting and administering the
policies that govern the compensation of executive officers of the Company,
including the five executive officers named in this proxy statement. The
Committee also administers the Company's stock option plans, Operators' Share
Incentive Compensation Plan, and Long-Term Incentive Plan.

Philosophy/Objectives

The Committee's objective is to attract and retain the most highly qualified
executive officers in a manner which provides incentives to create stockholder
value. This objective is accomplished by establishing compensation which is
calculated to attract and retain the best management talent available while at
the same time providing both significant risk and opportunity for reward based
on Company performance.

Executive officer Annual Compensation as related in the Summary Compensation
Table on page 11 consists of salary and formula bonus determined by Company
earnings under the Company's Operators' Share Incentive Compensation Plan. Long
Term Compensation is provided by stock options and restricted shares which
provide longer term compensation opportunities based on increases in the value
of the Company's stock, and by the Company's Long Term Incentive Plan based on
the Company's ranking in cumulative total shareholder return over a designated
performance period compared to a pre-selected peer group. In its considerations,
except as noted below, the Committee does not assign quantitative relative
weights to different factors or follow mathematical formulae. Rather, the
Committee exercises its discretion and makes a judgment after considering the
factors it deems relevant. The Committee believes that it has set compensation
at appropriate levels which reflect each executive's contribution to achieving
the Company's goals and in a manner that ties the executive's earning
opportunity to the welfare of the Company's stockholders.

In the Committee's view, it is in the Company's best interest to offer
compensation opportunities which enable the Company to compete with other
American industrial companies for the most effective talent available. However,
it is also the Committee's view that such opportunities should involve
compensation which is significantly "at risk" to the fortunes of the Company.
For that reason, while total Annual Compensation is targeted to place an
executive's total compensation at the 75th percentile of the compensation
reported by a consultant retained by the Company as described below, the
proportion of formula bonus in the compensation mix will generally increase as
the executive officer's responsibilities and compensation increase. In the case
of the five executive officers named in the Summary Compensation Table, the
formula bonus exceeds salary for each of the reported years.

Executive Officer Annual Compensation:Salary and Operators' Share Incentive Plan

Salary is the weekly cash payment which is assured to the executive officer
as part of the employment relationship.

The formula bonus determined by Company earnings under the Company's
Operators' Share Incentive Compensation Plan, variations of which have been used
by the Company for many years, is an amount equal to the after tax earnings per
share reported by the Company at fiscal year end on the Company's Common Stock
multiplied by a designated number of assumed shares ("Operators' Shares").
Whenever a cash dividend is declared on the Company's Common Stock, a Plan
participant will be paid the amount of such per share dividend multiplied by the
number of Operators' Shares held by the participant on the dividend record date
at the same time the dividend is paid to stockholders ("Dividend Equivalent").
After the end of each fiscal year of the Company, each participant will receive
a payment equal to the number of Operators' Shares held by the participant on
the last day of the fiscal year multiplied by the Company's after-tax net
earnings per share, minus all Dividend Equivalents paid to or due to the
participant on account of dividends declared during such fiscal year. Operators'
Shares do not constitute any form of equity ownership in the Company, and are
limited to a method for calculating compensation.

The level of salary and number of Operators' Shares is determined annually
in the following manner in the case of each executive officer.
<PAGE>

Each executive officer position has been rated based on evaluation criteria
provided by Hay Consulting Group, an independent nationally recognized
management compensation firm ("Consultant"). The Consultant has rated the Chief
Executive Officer ("CEO") position and, with input from the CEO, has rated the
major officer positions reporting directly to the CEO, including all executive
officers named in the Summary Compensation Table. Other executive positions
within the Company are rated by a job evaluation committee currently comprising
the Company's two Executive Vice Presidents, a Group Vice President, and the
Company's Vice President of Human Resources, utilizing the Consultant as a
resource.

The ratings of each executive officer position are a measurement of job
content expressed in numerical points, measuring qualitative attributes of the
position using a methodology developed by the Consultant. The Consultant
annually assigns a range of compensation values to those numerical ratings using
Consultant's data base drawn from surveys of several hundred American companies
in a variety of industries. The Committee has determined that it is appropriate
and in the Company's best interest to set the policy guideline for Company
compensation at the 75th percentile of the range of compensation provided by the
Consultant for a given numerical rating. Once the level of compensation is
established, the appropriate amount is provided through a combination of salary
and Operators' Shares. A significant percentage of that compensation for all
executive officers is provided by awarding Operators' Shares. For purposes of
determining the number of Operators' Shares to be awarded, Operators' Shares are
valued based on a three year average of Company earnings. The basic concept
underlying Operators' Shares has been used by the Company since 1932 as a
significant component of executive compensation. Compensation from Operators'
Shares exceeded salary for each executive officer named in the Summary
Compensation Table in each of the past three fiscal years.

In addition to the salary and Operators' Shares described above, Annual
Compensation has in past years included a discretionary cash bonus proposed by
the CEO for a small group of executive officers which the Committee has the
authority to accept or reject, and a bonus provided by the Committee for the
CEO. This discretionary bonus has been superceded by the Long-Term Incentive
Plan described below.

Executive Officer Long-Term Compensation:
Stock Option Plan and Long-Term Incentive Plan

Acting as the Committee administering the Company's 1991 Key Employee Stock
Option and Award Plan, the Committee reviews recommendations from the CEO for
the grant of options or Restricted Shares to executive officers (other than the
CEO) and other eligible recommended employees. The Committee's determination of
option grants in fiscal year 1998 and in past years reflected in the Summary
Compensation Table took into consideration the executive officer's past grants,
compensation level, contributions to the Company during the last completed
fiscal year, and potential for contributions in the future. (No Restricted
Shares were awarded during fiscal year 1998.)

Options are granted at the market price of the Company stock at date of
grant, and provide compensation to the optionee only to the extent the market
price of the stock increases between the date of grant and the date the option
is exercised. Options are intended to provide long term compensation tied
specifically to increases in the price of the Company's stock.

The total number of options granted in each year, which may vary from year
to year, bears a general relationship to the total number of options authorized
by the Company's stockholders divided by the number of years in the term of the
Plan under which the options are awarded. While options are generally awarded
based on the influence an executive position is considered by the Committee to
have on stockholder value, the number of options awarded may vary up or down
from prior year awards based on the level of an individual executive officer's
contribution to the Company in a particular year, based on the recommendation of
the CEO.

Company executive officers are eligible to participate in the "Hormel Foods
Corporation Long-Term Incentive Plan". This Plan is designed to provide a small
group of key employees selected by the Committee with an incentive to maximize
stockholder value. In selecting participants, and the amount of cash incentive
which can be earned by each participant, the Committee takes into account the
nature of the services rendered by the employee, his or her present and
potential contributions to the success of the Company and such other factors as
the Committee deems relevant.

Under the Long-Term Incentive Plan the Committee sets specific performance
goals, which are based solely on cumulative total return to stockholders
compared to preselected peer groups. Performance of the goals is expected to be
measured over three years, but in no case less than 24 months, and is expected
to be ranked against a peer group of companies selected by the Committee. The
first awards under this Plan were made for an approximately three year
performance period commencing November 1, 1996, and ending on the tenth day on
which shares are traded on the New York Stock Exchange following October 30,
1999. At the end of the performance period, payment will be made for attainment
of the specified goals based on the increase or decrease in market value of the
Company stock, together with dividends deemed reinvested, ("Total Shareholder
Return") during the performance period ranked against the Total Shareholder
Return of the peer group companies.
<PAGE>

Chief Executive Officer Compensation

The cash compensation of the CEO is established by the Committee in
generally the same way as cash compensation is determined for other executive
officers, and the Committee employs generally the same criteria for option
grants and Restricted Share awards as apply to other executive officers, taking
into consideration the CEO's responsibility for the total enterprise. Based on
information received from Hay Consulting Group, rating Mr. Johnson's position
and comparing his annual cash compensation to cash compensation received by
individuals in other companies in similar positions, the Committee awarded Mr.
Johnson a salary increase of $2,569.23 per week and an increase of 35,000
Operators' Shares which he received in fiscal year 1998, and which is reflected
in the Summary Compensation Table at page 11. The Committee granted Mr. Johnson
the stock options reflected in the Summary Compensation Table at page 11. The
Committee did not award Mr. Johnson any Restricted Shares in fiscal year 1998.
While the salary component of Mr. Johnson's fiscal year 1998 cash compensation
was predetermined for the year, the Operators' Shares formula bonus, comprising
more than half of his fiscal year 1998 cash compensation, was determined by the
Company's net earnings per share for fiscal year 1998 as explained under the
heading "Executive Officer Annual Compensation: Salary and Operators' Share
Incentive Plan" on the preceding page. In addition to salary and formula bonus
under the Operators' Share Incentive Compensation Plan, as described above, Mr.
Johnson is participating in the Company's Long-Term Incentive Plan, through an
award granted to Mr. Johnson by the Committee in fiscal year 1997. The Committee
has not granted Mr. Johnson any award under the Long-Term Incentive Plan in
fiscal year 1998. Mr. Johnson's long-term compensation under the Stock Option
Plan and Long-Term Incentive Plan, if any, will depend on the Company's stock
price relative to the exercise price of each option granted, and on the
attainment by the Company of the performance goals specified for the Long-Term
Incentive Plan performance period for which the award was made.

Deductibility of Compensation Under Internal Revenue Code Section 162 (m)

Section 162(m) of the Internal Revenue Code, adopted in 1993, imposes a $1
million cap, subject to certain exceptions, on the deductibility to a company of
compensation paid to the five executive officers named in such company's proxy
statement. The stockholders voted at the 1997 Annual Meeting of Stockholders to
amend and approve the Company's 1991 Key Employee Stock Option and Award Plan to
enable options granted under that Plan to qualify as deductible performance
based compensation under Section 162(m), so that any compensation realized from
the exercise of stock options would not be affected by Section 162(m). The
stockholders voted at the 1998 Annual Meeting of Stockholders to approve the
Company's Operators' Share Incentive Compensation Plan and the Company's
Long-Term Incentive Plan for the purpose of qualifying those plans under Section
162(m). The Committee believes that compensation paid pursuant to those two
Plans will be deductible, except for Dividend Equivalents paid under the
Operators' Share Plan (which may not be deductible in full for any named
executive officer in a given year). Additionally, cash compensation voluntarily
deferred by the executive officers named in this proxy statement under the
Company's Deferred Compensation Plans is not subject to the Section 162(m) cap
until the year paid. Thus, compensation paid this fiscal year subject to the
Section 162(m) cap is not expected to exceed $1 million for any named executive
officer. Therefore the Committee believes that the Company will not be subject
to any Section 162(m) limitations on the deductibility of compensation paid to
the Company's named executive officers for fiscal year 1998.

The Committee continues to consider other steps which might be in the
Company's best interests to comply with Section 162(m), while reserving the
right to award future compensation which would not comply with the Section
162(m) requirements for nondeductibility if the Committee concluded that this
was in the Company's best interests.

THE COMPENSATION COMMITTEE

William S. Davila
E. Peter Gillette, Jr.
Joseph T. Mallof
<PAGE>

Summary Compensation Table

The following table sets forth the cash and noncash compensation for each of
the last three fiscal years earned by or awarded to the Chief Executive Officer
and the four other most highly compensated executive officers of the Company:

Long Term Compensation
Annual Compensation Awards Payouts
Other
Annual Restricted Securities All
Compen- Stock Underlying LTIP Other
Salary Bonus sation Award(s) Options/ Payouts Compensa-
Name and Principal Position Year ($)(1) ($)(2) ($)(3) ($) SARs (#)(4) ($) tion ($)(5)(6)
<S> <C> <C> <C> <C> <C> <C> <C> <C>

Joel W. Johnson 1998 548,246 777,000 - 0 70,000 0 26,804
Chairman, President and 1997 418,000 550,550 - 0 -0- 0 19,464
Chief Executive Officer 1996 370,500 374,400 - 0 100,000 0 16,546

Don J. Hodapp 1998 292,900 444,000 - 0 30,000 0 14,346
Executive Vice President,and 1997 261,300 343,200 - 0 -0- 0 12,427
Chief Financial Officer 1996 238,900 249,600 - 0 50,000 0 10,878

Gary J. Ray 1998 239,900 388,500 - 0 30,000 0 12,361
Executive Vice President 1997 211,100 300,300 - 0 -0- 0 10,542
1996 197,300 218,400 - 0 50,000 0 9,388

Stanley E. Kerber 1998 190,500 342,250 - 0 15,000 0 9,526
Group Vice President 1997 181,700 264,550 - 0 -0- 0 8,795
1996 177,400 192,400 - 0 25,000 0 8,262

James W. Cole 1998 224,000 296,000 - 0 10,000 0 11,213
Group Vice President 1997 196,400 228,800 - 0 -0- 0 9,476
1996 186,000 166,400 - 0 25,000 0 8,698

</TABLE>

(1)Includes director fee payments of $100 per meeting attended for each
officer named in the table.

(2)Includes payments under the Company's Operators' Share Incentive
Compensation Plan as well as annual discretionary bonuses. No
discretionary bonuses were paid in 1997 or 1998. The amounts shown in
the Table include those amounts voluntarily deferred by the named
individuals under the Company's Deferred Compensation Plans, which
permit participants to voluntarily defer receipt of all or part of the
payments currently due to the participant under the Operators' Share
Incentive Compensation Plan.

(3)There was no Other Annual Compensation exceeding the lesser of $50,000
or 10% of total Annual Compensation in each of the years shown.

(4)No SARs were awarded in 1996, 1997, or 1998.

(5)The amount shown includes Company Joint Earnings Profit Sharing
distributions which may be authorized by the Board of Directors in its
discretion based on Company profits. The total amount of Company
distributions declared available to all participants by the Board is
allocated in the same proportion as each person's base weekly wage
bears to the total base wage for all eligible persons. Payments to the
executive officers named in the Table are calculated using the same
proportional formula as is used for all eligible employees. Joint
Earnings Profit Sharing distributions were for Mr. Johnson $25,954 in
1998, $18,614 in 1997, and $15,696 in 1996; for Mr. Hodapp $13,496 in
1998, $11,577 in 1997, and $10,028 in 1996; for Mr. Ray $11,086 in
1998, $9,307 in 1997, and $8,284 in 1996; for Mr. Kerber $8,676 in
1998, $7,945 in 1997, and $7,412 in 1996; and for Mr. Cole $10,363 in
1998, $8,626 in 1997, and $7,848 in 1996. "All Other Compensation" also
includes Company matching payments of up to $200.00 under the Company's
Founders' Fund Plan and up to $650.00 under the Hormel Tax Deferred
Investment Plan A. Both of these matching payments, in the same amount,
are available to all other eligible employees. Company matching
payments were for Mr. Johnson $200 and $650 in 1998, $200 and $650 in
1997, and $200 and $650 in 1996; for Mr. Hodapp $200 and $650 in 1998,
$200 and $650 in 1997, and $200 and $650 in 1996; for Mr. Ray $200 and
$650 in 1998, $200 and $650 in 1997, and $200 and $650 in 1996; for Mr.
Kerber $200 and $650 in 1998, $200 and $650 in 1997, and $200 and $650
in 1996; and for Mr. Cole $200 and $650 in 1998, $200 and $650 in 1997,
and $200 and $650 in 1996. For Mr. Ray "All Other Compensation"
includes Company contributions to a disability insurance program which

<PAGE>

is available to all other eligible employees with benefits proportional
to Annual Compensation. Mr. Ray received contributions of $425 in 1998,
$385 in 1997 and $254 in 1996.

(6)None of the named executive officers held any Restricted Stock at year
end.

STOCK OPTIONS TABLE

The following tables summarize option grants and exercises during 1998 to or
by the Chief Executive Officer or the executive officers named in the Summary
Compensation Table above, and the values of options granted during 1998 and held
by such persons at the end of 1998.
<TABLE>
<CAPTION>

Option/SAR Grants in Last Fiscal Year
Potential Realizable Value at Assumed Annual
Individual Grants Rates of Stock Price Appreciation for Option Term
-----------------------------------------------------------------------------------------
Number % of Total
of Securities Options/SARs
Underlying Granted to Exercise
Options/SARs Employees in or Base Price Expiration
Name Granted(#)(0) Fiscal Year ($/Sh) Date 5%($) 10%($)
- ------------- ------------ ------------ ----------- --------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
Joel W. Johnson 70,000 17.28% $29.3125 12/18/2007 1,290,413 3,270,160
Don J. Hodapp 30,000 7.41% $29.3125 12/18/2007 553,034 1,401,497
Gary J. Ray 30,000 7.41% $29.3125 12/18/2007 553,034 1,401,497
Stanley E. Kerber 15,000 3.70% $29.3125 12/18/2007 276,517 700,749
James W. Cole 10,000 2.47% $29.3125 12/18/2007 184,345 467,166

</TABLE>

<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year End Option/SAR Values (1)
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs at Options at Fiscal
Fiscal Year End (#)(4) Year End($)(2)(3)(4)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise(#) Realized ($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>

Joel W. Johnson 0 N/A 380,000/0 3,339,375
Don J. Hodapp 0 N/A 184,000/0 1,595,375
Gary J. Ray 0 N/A 184,000/0 1,595,375
Stanley E. Kerber 20,000 $285,000 90,000/0 745,314
James W. Cole 28,707 $464,695 96,293/0 834,963
</TABLE>

(1)There are no outstanding SARs.

(2)Unrealized value of in-the-money options at year end represents the
aggregate difference between the market value at October 31, 1998 and
the applicable exercise price.

(3)The differences between market value and exercise price in the case of
unrealized value accumulate over what may be, in many cases, several
years.

(4)There are no unexercisable options.
<PAGE>

LONG-TERM INCENTIVE PLAN AWARDS TABLE

The following table summarizes awards under the Company's Long-Term Incentive
Plan during 1998 to the Chief Executive Officer or the executive officers named
in the Summary Compensation Table above.
<TABLE>
<CAPTION>

Long-Term Incentive Plan - Awards in Last Fiscal Year
Estimated Future Payouts under Non-Stock
Price-Based Plans
<S> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f)
Performance
Number of or Other
Shares, Units Period Until
or Other Maturation or Threshold(6) Target(6) Maximum(6)
Name Rights ($)(1) Payout (0) ($) ($) ($)
Joel W. Johnson 0 N/A N/A N/A N/A
Don J. Hodapp 0 N/A N/A N/A N/A
Gary J. Ray 0 N/A N/A N/A N/A
Stanley E. Kerber 0 N/A N/A N/A N/A
James W. Cole 0 N/A N/A N/A N/A

(1) No awards were made during the fiscal year ending October 31, 1998.
</TABLE>

PENSION PLAN

The Company maintains noncontributory defined benefit pension plans covering
substantially all employees. Pension benefits for salaried employees are based
upon the employee's highest five years of compensation (as described below) of
the last 10 calender years of service and the employee's length of service. The
Company also maintains a supplemental executive retirement plan that provides
pension benefits calculated under the qualified defined benefit pension plan
formula that exceed the annual benefit limitation for defined benefit plans
qualifying under the Internal Revenue Code. Contingent on Mr. Johnson remaining
employed with the Company until at least July 14, 2003, a Company-established
plan will credit Mr. Johnson with deemed years of service for purposes of
determining both the amount of and eligibility for retirement benefits under the
Company's retirement plans. The following tabulation shows the estimated
aggregate annual pension payable to an employee under the qualified defined
benefit pension plan and the supplemental executive retirement plan upon normal
retirement at the end of fiscal year 1998 at age 65 under various assumptions as
to final average annual compensation and years of service, and on the
assumptions that the retirement plans will continue in effect during such time
without change and that the employee will select a single life annuity option.
The pension benefits shown below reflect an integration with Social Security
benefits.
<TABLE>
<CAPTION>

Average Annual
Compensation Years of Service
<S> <C> <C> <C> <C> <C> <C> <C>
15 20 25 30 35 40 45
$ 250,000 $56,974 $75,966 $94,957 $113,949 $ 132,940 $ 151,932 $ 170,923
$ 500,000 $116,974 $155,966 $194,957 $233,949 $ 272,940 $ 311,932 $ 350,923
$ 750,000 $176,974 $235,966 $294,957 $353,949 $ 412,940 $ 471,932 $ 530,923
$ 1,000,000 $236,974 $315,966 $394,957 $473,949 $ 552,940 $ 631,932 $ 710,923
$ 1,250,000 $296,974 $395,966 $494,957 $593,949 $ 692,940 $ 791,932 $ 890,923
$ 1,500,000 $356,974 $475,966 $594,957 $713,949 $ 832,940 $ 951,932 $1,070,923
$ 1,750,000 $416,974 $555,966 $694,957 $833,949 $ 972,940 $1,111,932 $1,250,923
$ 2,000,000 $476,974 $635,966 $794,957 $953,949 $1,112,940 $1,271,932 $1,430,923

The compensation for the purpose of determining the pension benefits consists of Annual Compensation, Restricted
Stock Awards, and LTIP Payouts. The years of credited service for individuals listed in the Summary Compensation Table
are: 7 years for Mr. Johnson; 32 years for Mr. Hodapp; 30 years for Mr. Ray; 43 years for Mr. Kerber; and 35 years for
Mr. Cole.
</TABLE>
<PAGE>

COMPARATIVE STOCK PERFORMANCE

The following graph compares the cumulative total shareholder return on the
Company's Common Stock during the five fiscal years preceding October 31, 1998,
with the Standard & Poor's 500 Stock Index and the Standard & Poor's Food Group
Index (assuming the investment of $100 in each vehicle on October 30, 1993, and
the reinvestment of all dividends during such period).

Comparison of Five Year Cumulative Total Return
Among Hormel Foods Corporation, S & P 500 Index, and S & P Food Group Index

* $100 invested on 10/31/93 in stock or index including reinvestment of
dividends.
Fiscal year ending October 31.
<PAGE>

OTHER INFORMATION RELATING TO DIRECTORS, NOMINEES,
AND EXECUTIVE OFFICERS

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Persons serving as members of the Compensation Committee during fiscal year
1998 were William S. Davila, E. Peter Gillette, Jr. and Joseph T. Mallof. None
of such persons was an officer or employee of the Company or any of its
subsidiaries during fiscal 1998, was formerly an officer of the Company or any
of its subsidiaries or had any other relationship with the Company or any of its
subsidiaries requiring disclosure under the applicable rules of the SEC. RELATED
PARTY TRANSACTIONS

During fiscal year 1998 the Company purchased 13,345 hogs in ordinary course
of business (approximately 2/10 of one percent of the Company's total hog
purchases) from Block Farms, a partnership owned by Mr. John R. Block and his
son, at the same prices paid by the Company to its other spot market hog
suppliers. During fiscal year 1998, employees of the company provided
administrative services to the Hormel Foundation, which beneficially owns more
than five percent of the Company's common stock, for which the Hormel Foundation
paid the Company $102,864.17, reimbursing the company for its fully allocated
cost for the employee time expended.

SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, certain officers, and any persons holding more than 10 percent of the
Company's Common Stock to report their initial ownership of the Company's Common
Stock and any subsequent changes in that ownership to the Securities and
Exchange Commission and the New York Stock Exchange. Specific due dates for
these reports have been established, and the Company is required to disclose in
this proxy statement any failure to file by those dates during 1998.

In making these disclosures, the Company has relied on the representations of
its directors and officers and copies of the reports that they have filed with
the Commission.

Based on those representations and reports, the Secretary of the Company
inadvertently made two late Form 4 filings on behalf of Company executive
officers. One covered five gifts of shares of the Company's Common Stock made on
the same day by Mr. Dickson which were timely reported by Mr. Dickson to the
Secretary consistent with Company policy. The other covered intra-plan transfers
of funds out of Company stock funds in two Company employee benefit plans
occurring on the same day for the account of Mr. James Jorgenson, Company Vice
President, for which the Secretary had assumed reporting responsibility.

APPROVAL OF APPOINTMENT OF AUDITORS

Subject to ratification by the stockholders, the Board of Directors has
appointed Ernst & Young, independent public accountants, to audit the financial
statements of the Company and its consolidated subsidiaries for the fiscal year
which will end October 30, 1999. Ernst & Young are the present public auditors
and have served as public auditors for the Company since 1931. Representatives
of the firm are expected to be present at the meeting and will be afforded an
opportunity to make a statement, if they desire to do so and be available to
respond to appropriate questions. Management is not aware of any direct or
indirect financial interest or any other connections Ernst & Young may have with
the Company or its subsidiaries except the usual professional status of an
independent auditor.

Audit services rendered by Ernst & Young for the fiscal year ended October
31, 1998, included the examination of the financial statements of the Company
and its subsidiaries, review of certain documents filed by the Company with the
Securities and Exchange Commission, and examination of the financial statements
of various employee benefit plans.
<PAGE>

The affirmative vote of the majority of the shares of Common Stock
represented at the meeting shall constitute ratification. The Board of Directors
recommends a vote FOR the proposal to approve the appointment of Ernst & Young.

OTHER MATTERS

The management of your Company does not know of any matters to be presented
at the meeting other than those mentioned above. However, if any other matters
come before the meeting, it is intended that the holders of the proxies will
vote thereon in their discretion.

By order of the Board of Directors

T. J. LEAKE
Secretary
December 30, 1998

<PAGE>

PROXY CARDS
NUMBER 1

HORMEL FOODS CORPORATION
1 Hormel Place
Austin, MN 55912

PROXY

This proxy is solicited on behalf of the Board of Directors. The undersigned
hereby appoints Joel W. Johnson, Don J. Hodapp, Gary J. Ray or a majority
thereof present, or if only one be present, then that one, with full power of
substitution, and hereby authorizes them to represent and to vote as designated
below all the shares of Common Stock of Hormel Foods Corporation held of record
by the undersigned on December 7, 1998, at the Annual Meeting of Stockholders to
be held on January 26, 1999, or any adjournment thereof.

1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) (to vote for all nominees) John W.
Allen, John R. Block, Eric A. Brown, William S. Davila, David N. Dickson, E.
Peter Gillette, Jr., Luella G. Goldberg, Don J. Hodapp, Joel W. Johnson,
Geraldine M. Joseph, Stanley E. Kerber, Joseph T. Mallof, Gary J. Ray, Robert R.
Waller, M.D. (INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name on the space provided below.)

2. PROPOSAL TO APPROVE THE APPOINTMENT OF ERNST & YOUNG AS THE INDEPENDENT
AUDITORS OF THE CORPORATION. FOR AGAINST ABSTAIN

3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. YES NO

This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If no direction is made, the proxy will be voted
FOR Proposals 1 and 2, and authorization will be deemed granted on point 3.

Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.

Dated January________, 1999
----------------------------------------------------
Signature
----------------------------------------------------
Signature if held jointly

<PAGE>

PROXY CARDS
NUMBER 2

HORMEL FOODS CORPORATION
1 Hormel Place
Austin, MN 55912

PROXY

2. PROPOSAL TO APPROVE THE APPOINTMENT OF ERNST & YOUNG AS THE INDEPENDENT
AUDITORS OF THE CORPORATION. FOR AGAINST ABSTAIN

3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. YES NO

SHARES COVERED BY THIS PROXY CARD ARE LISTED OPPOSITE THE CODES WHICH ARE
EXPLAINED BELOW.
If you are a shareholder of record, your signature on this proxy card will
appoint a proxy for the shares listed opposite code COMM and direct the proxy as
to how to vote.
COMM - Shares held in your record account for which you are designating
and directing a proxy.

If you participate in any employee plans, your signature will serve as a
voting direction to the trustee of the ESPP, JEPST, 401K-A or 401K-B for any
shares listed opposite those codes, instead of appointing Messrs.
Johnson, Hodapp and Ray as your proxy for those shares.
ESPP - Shares held in your account in the Employee Stock Purchase Plan.
By signing this proxy, the undersigned appoints Piper Jaffray Inc. with full
power of substitution, and hereby directs them to represent and to vote those
shares, in person or by proxy, as designated below.

JEPST - Shares held in your account in the Hormel Foods Corporation
Joint Earnings Profit Sharing Trust. By signing this proxy, the undersigned
appoints Investors Bank Trust with full power of substitution and hereby directs
them to represent and to vote those shares, in person or by proxy, as designated
below.

401K-A Shares held in your account in the Hormel Foods Corporation Tax
Deferred Investment Plan A (401K). By signing this proxy, the undersigned
appoints Investors Bank Trust with full power of substitution and hereby directs
them to represent and to vote those shares, in person or by proxy, as designated
below.

401K-B Shares held in your account in the Hormel Foods Corporation Tax
Deferred Investment Plan B (401K). By signing this proxy, the undersigned
appoints Investors Bank Trust with full power of substitution and hereby directs
them to represent and to vote those shares, in person or by proxy, as designated
below.

Dated January________, 1999
----------------------------------------------------
Signature
----------------------------------------------------
Signature if held jointly

<PAGE>

PROXY CARD
NUMBER 3

HORMEL FOODS CORPORATION
1 Hormel Place
Austin, MN 55912

VOTING DIRECTION

This voting direction is solicited on behalf of the trustee of the plan or plans
in which Hormel stock is held for your account as explained on the opposite side
of this card. The undersigned hereby appoints such trustee(s), with full power
of substitution, and hereby authorizes them to represent and to vote as
designated below all the shares of Common Stock of Hormel Foods Corporation held
for the account of the undersigned on December 7, 1998, at the Annual Meeting of
Stockholders to be held on Janurary 26, 1999, or any adjournment thereof.

2. PROPOSAL TO APPROVE THE APPOINTMENT OF ERNST & YOUNG AS THE INDEPENDENT
AUDITORS OF THE CORPORATION. FOR AGAINST ABSTAIN

3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. YES NO

SHARES COVERED BY THIS VOTING DIRECTION ARE LISTED OPPOSITE THE CODES WHICH ARE
EXPLAINED BELOW.
Your signature will serve as a voting direction to the trustee of the ESPP,
JEPST, 401K-A or 401K-B for any shares listed opposite those codes.
ESPP - Shares held in your account in the Employee Stock Purchase Plan.
By signing this proxy, the undersigned appoints Piper Jaffray Inc. with full
power of substitution, and hereby directs them to represent and to vote those
shares, in person or by proxy, as designated below.

This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If no direction is made, the proxy will be voted
FOR Proposals 1 and 2.

Please sign exactly as name appears below. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.

Dated January________, 1999
----------------------------------------------------
Signature
----------------------------------------------------
Signature if held jointly

<PAGE>

SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

Filed by the Registrant

Check the appropriate box:
Definitive proxy statement

HORMEL FOODS CORPORATION
(Name of Registrant as Specified in its Charter)

L. D. GORDEN - DIRECTOR OF TAXES
(Name of Person Filing Proxy Statement)

(1) Title of each class of securities to which transaction applies:

Not Applicable

(2) Aggregate number of securities to which transaction applies:

Not Applicable

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:

Not Applicable

(4) Proposed maximum aggregate value of transaction:

Not Applicable

<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998

<CASH> 203,934
<SECURITIES> 34,098
<RECEIVABLES> 222,919
<ALLOWANCES> 0
<INVENTORY> 239,548
<CURRENT-ASSETS> 717,365
<PP&E> 938,581
<DEPRECIATION> (451,674)
<TOTAL-ASSETS> 1,555,892
<CURRENT-LIABILITIES> 267,651
<BONDS> 204,874
0
0
<COMMON> 8,628
<OTHER-SE> (3,559)
<TOTAL-LIABILITY-AND-EQUITY> 1,555,892
<SALES> 3,261,045
<TOTAL-REVENUES> 3,261,045
<CGS> 2,400,333
<TOTAL-COSTS> 2,400,333
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,692
<INCOME-PRETAX> 217,336
<INCOME-TAX> 78,045
<INCOME-CONTINUING> 139,291
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 139,291
<EPS-PRIMARY> 1.86
<EPS-DILUTED> 1.85

</TABLE>