The company said that its prepared meats sector performance was improving, but still below previous year levels.

Adjusted Operating Earnings in the Meat Products Group were C$1.7 million in the second quarter of 2009 compared to C$5.7 million last year. Although gross margins on prepared meat products improved compared to the first quarter of 2009 as the Company reduced its investment in trade spending and promotions, higher raw material costs resulted in lower earnings compared to the same period last year as the Company was not able to increase prices in a business recovery environment.

Lower earnings in prepared meats were partly mitigated by strong results in primary pork processing as the Company continued to benefit from the restructuring of its primary pork processing operations, as the Brandon and Winnipeg operations are running efficiently and at lower costs compared to last year.

In addition, improved sales mix and a weaker Canadian dollar benefited earnings in pork processing despite poor industry market conditions. Earnings from the Company's poultry operations were largely consistent compared to last year.

Restructuring of the protein sector had contributed to improved hog production and primary pork processing results.

The Bakery Group margins improved as commodity input costs declined.

"Our stronger results reflect good performance in our bakery businesses and steady improvement in our prepared meats business, recovering from the product recall of last August," said Michael H. McCain, President and CEO.

"We are realising material positive benefits from the transformation of our protein operations over the past several years, which protected us from challenging commodity markets in the quarter.

"While we have made good progress, there remains significant value creation opportunity with very positive effects on our future financial results."

Sales for the second quarter decreased by 2.5 per cent to C$1,320.8 million compared to C$1,355.3 million last year due to lower volumes in primary processing and prepared meats and lower market prices for fresh pork.