What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2023-02-09 compared with 2022-02-18 · 93 added, 58 removed, 341 unchanged (31% of the section changed)

5 unchanged sentences

We face risks related to outbreaks of public health crises, including epidemics and infectious diseases such as the ongoing COVID-19 pandemic.

The continued spread of COVID-19 and the emergence of new variants of the virus across the globe continues to impact economic activity worldwide by causing disruption and volatility in the global capital markets, as well as a sustained economic slowdown.

National and local governments in the United States and around the world continue to implement measures to prevent the spread of COVID-19 and its variants, including travel bans, prohibitions on group events and gatherings, shutdowns of certain businesses, quarantines, curfews, and recommendations to practice physical distancing.

These preventative measures which have restricted and continue to restrict individuals’ daily activities and curtail or cease many businesses’ normal operations.

The spread of COVID-19 and the emergence of new variants of the virus across the globe could continue to impact economic activity worldwide by causing disruption and volatility in the global capital markets, as well as a sustained economic slowdown.

National and local governments in the United States and around the world could re-implement measures to prevent the spread of COVID-19 and its variants, including travel bans, prohibitions on group events and gatherings, shutdowns of certain businesses, quarantines, curfews, and recommendations to practice physical distancing.

These preventative measures could restrict individuals’ daily activities and curtail or cease many businesses’ normal operations.

We continue to monitor and work to comply with the COVID-19 guidelines from public health and governmental authorities concerning the prevention and spread of COVID-19 and its variants, as well as the protection of the health and safety of our personnel, including the April 28, 2020 executive order that designated meat and poultry processing plants as critical infrastructure.

Implementing these measures, as well as the global economic impact of the COVID-19 pandemic generally, has resulted in the adverse effects to our results of operations, financial condition and liquidity, including reduced activity at our businesses and limited availability and productivity among our workforce and suppliers, as noted below.

The COVID-19 outbreak has had, and a continuing out break or future outbreaks are likely to have, numerous adverse effects on our business and operations .

Implementing these measures, as well as the global economic impact of the COVID-19 pandemic generally, resulted in the adverse effects to our results of operations, financial condition and liquidity, including reduced activity at our businesses and limited availability and productivity among our workforce and suppliers, as noted below.

The COVID-19 outbreak had, and further out breaks or future similar outbreaks are likely to have, numerous adverse effects on our business and operations .

As o f February 9, 2023, all of our production facilities are o perating, although some facilities have reduced production levels and outputs due to increased health and safety measures and current labor shortages experienced throughout both the U.S.

6 unchanged sentences

Our brand or reputation could be negatively impacted.

The meat production industry has recently been the focus of negative press reports in light of the spread of COVID-19 at certain companies’ facilities.

Although we have not been the focus of such reports, our brand or reputation could be negatively impacted by such reports.

The meat production industry was the focus of negative press reports in light of the spread of COVID-19 at certain companies’ facilities.

Although we were not the focus of such reports, our brand or reputation could be negatively impacted by such reports.

In addition to the risks described above, the COVID-19 pandemic could have additional adverse effects on our business and financial condition, including, but not limited to, the following:

• a significant increase in the cost or the difficulty to obtain debt or equity financing, or to refinance our debt in the future, or the risk that we may be unable to meet the requirements of the covenants in our existing credit facilities, which could negatively affect our liquidity position and our ability to fund operations or future investment opportunities;

• an impairment in the carrying value of goodwill or intangible assets or a change in the useful life of definite-lived intangible assets;

• significant volatility or decline in the trading price of our securities;

5 unchanged sentences

As a result, the chicken and pork industries are subject to cyclical earnings fluctuations.

The price of feed ingredients is positively or negatively affected primarily by the global level of supply inventories and demand for feed ingredients, the agricultural policies of the U.S.

The price of feed ingredients is positively or negatively affected primarily by the global level of supply and demand for feed ingredients, the agricultural policies of the U.S.

and foreign governments and weather patterns throughout the world.

In particular, weather patterns often change agricultural conditions in an unpredictable manner.

A significant change in weather patterns could affect supplies of feed ingredients, as well as both the industry’s and our ability to obtain feed ingredients, grow chickens and pigs or deliver products.

A significant change in weather patterns could affect supplies of feed ingredients, as well as our ability to obtain feed ingredients, grow chickens and pigs or deliver products.

Consequently, there can be no assurance that the price of grains will not rise as a result of, among other things, increasing demand for these products around the world and alternative uses of these products, such as ethanol and biodiesel production.

17 unchanged sentences

or Mexico, there can be no assurance that it would not significantly affect our ability to conduct our operations and/or demand for our products, in each case in a manner having a material adverse effect on our business, reputation and/or prospects.

The outbreak of African swine fever in China during 2018 and 2019 and its subsequent spread across the world has had a significant effect on both the global supply of pork and on pork prices.

Previous outbreaks of African swine fever in China and its subsequent spread across the world had a significant effect on both the global supply of pork and on pork prices.

Given its island status, the U.K.

has an element of built-in biosecurity, but there are risks, mainly as a result of human movement of infected meat from the European Union.

The National Pig Association and the British Meat Processors Association are pressing the U.K.

government to increase the level of communication to travelers of the risks.

The Company’s own pig production is geographically dispersed.

In the event of an outbreak of African Swine Fever in the U.K., we believe the Company’s risks are limited to infection.

3 unchanged sentences

Poultry and pork products may be subject to contamination by disease-producing organisms, or pathogens, such as Listeria monocytogenes , Salmonella , generic E.coli, Yersinia enterocolitica and Staphylococcus aureus .

These pathogens are generally found in the environment and there is a risk that, as a result of food processing, they could be present in our processed poultry products.

These pathogens are

generally found in the environment and there is a risk that, as a result of food processing, they could be present in our processed poultry products.

These pathogens can also be introduced as a result of improper handling at the further processing, foodservice or consumer level.

2 unchanged sentences

Illness and death may result if the pathogens are not eliminated at the further processing, foodservice or consumer level.

Even an inadvertent shipment of contaminated products is a violation of law and may lead to increased risk of exposure to product liability claims, product recalls and increased scrutiny by federal and state regulatory agencies and may have a material adverse effect on our business, reputation and prospects.

The packaging, marketing and distribution of food products entail an inherent risk of product liability and product recall and the resultant adverse publicity.

31 unchanged sentences

In particular, as the E.U.

states reframe their national legislation to harmonize with the GDPR, we will need

to monitor compliance with all relevant E.U.

states reframe their national legislation to harmonize with the GDPR, we will need to monitor compliance with all relevant E.U.

member states’ laws and regulations, including where permitted derivations from the GDPR are introduced.

2 unchanged sentences

federal level.

Compliance with such existing, proposed and recently enacted laws and regulations can be costly and may necessitate the review and implementation of policies and processes relating to our collection, security, and use of data;

Compliance with such

existing, proposed and recently enacted laws and regulations can be costly and may necessitate the review and implementation of policies and processes relating to our collection, security, and use of data;

any failure to comply with these regulatory standards could subject us to legal and reputational risks including proceedings against the Company by governmental entities or others, fines and penalties, damage to our reputation and credibility and could have a negative impact on our business and results of operations.

31 unchanged sentences

We strive to respond to consumer preferences and expectations, but we may not be successful in our efforts.

We could be adversely affected if consumers lose confidence in quality of certain food products or ingredients.

Prolonged negative perceptions certain food products or ingredients could influence consumer preferences and acceptance of some of our products and marketing programs.

We could be adversely affected if consumers lose confidence in the quality of certain food products or ingredients.

Prolonged negative perceptions of certain food products or ingredients could influence consumer preferences and acceptance of some of our products and marketing programs.

Continued negative perceptions and failure to satisfy consumer preferences could materially and adversely affect our product sales, financial condition and results of operations.

4 unchanged sentences

Success in promoting and enhancing brand value depends in large part on our ability to provide high-quality products.

Brand value could diminish significantly due to a number of factors, including consumer perception that we have acted in an irresponsible manner, adverse

publicity about our products (whether or not valid), our failure to maintain the quality of our products, the failure of our products to deliver consistently positive consumer experiences or the products becoming unavailable to consumers.

Brand value could diminish significantly due to a number of factors, including consumer perception that we have acted in an irresponsible manner, adverse publicity about our products (whether or not valid), our failure to maintain the quality of our products, the failure of our products to deliver consistently positive consumer experiences or the products becoming unavailable to consumers.

Media campaigns related to food production;

13 unchanged sentences

This in turn could have a material adverse effect on our business, financial condition and results of operations.

We are increasingly dependent on information technology, and our business and reputation could suffer if we are unable to protect our information technology systems against, or effectively respond to, cyber-attacks, other cyber incidents or security breaches or if our information technology systems are otherwise disrupted.

We are increasingly dependent on information technology, and our business and reputation could suffer if we are unable to protect our information technology systems against, or effectively respond to, cyber-attacks, to other cyber security incidents or breaches, or if our information technology systems are otherwise disrupted.

The proper functioning of our information systems is critical to the successful operation of our business.

26 unchanged sentences

For example, between September 2, 2016 and October 13, 2016, a series of purported class action lawsuits were brought against PPC and other defendants by and on behalf of direct and indirect purchasers of broiler chickens alleging violations of antitrust and unfair competition laws.

The complaints seek, among other relief, treble damages for an alleged conspiracy among defendants to reduce output and increase prices of broiler chickens from the period of January 2008 to the present.

In addition, on October 13, 2020, the Company announced that it had entered into a plea agreement with the U.S.

Department of Justice (the “DOJ”) pursuant to which it (1) pled guilty to one count of conspiracy in restraint of competition involving sales of broiler chicken products in the U.S.

in violation of the Section 1 of the Sherman Antitrust Act, and (2) paid an amended fine of $107.9 million.

For additional information on these and other litigation matters, see Part II, Item 8, Notes to Consolidated Financial Statements, “Note 20.

The complaints seek, among other relief, treble damages for an alleged conspiracy among defendants to reduce output and increase prices of broiler chickens from the period of January 2008 to 2019.

For additional information on this and other litigation matters, see Part II, Item 8, Notes to Consolidated Financial Statements, “Note 21.

Commitments and Contingencies” in this annual report.

2 unchanged sentences

We may not be able to successfully integrate the operations of companies we acquire or benefit from growth opportunities.

We continue to pursue selective acquisitions of complementary businesses, such as PPL, which we acquired in 2019, and Pilgrim’s Food Masters, which we acquired in 2021.

We continue to pursue selective acquisitions of complementary businesses, such as Pilgrim’s Food Masters, which we acquired in 2021.

Inherent in any future acquisitions are certain risks such as increasing leverage and debt service requirements and combining company cultures and facilities, which could have a material adverse effect on our operating results, particularly during the period immediately following such acquisitions.

15 unchanged sentences

Because of these trends, our volume growth could slow or we may need to lower prices or increase promotional spending for our products, any of which could adversely affect our financial results.

Our two largest customers accounted for approximately 12.0% of our net sales in 2021.

Our two largest customers together accounted for approximately 12.8% of our consolidated net sales in 2022.

Our business could suffer significant setbacks in revenues and operating income if we lost one or more of our largest customers, or if our customers’ plans and/or markets should change significantly.

17 unchanged sentences

The effects of climate change and legal or regulatory initiatives to address climate change could have a long-term adverse impact on our business and results of operations.

We currently have outstanding Senior Notes that are linked to our achievement of targeted reductions in greenhouse gas emissions intensity by 2026.

We currently have outstanding Senior Notes that are linked to our achievement of targeted reductions in Scope 1 and 2 greenhouse gas emissions intensity by 2026.

If we fail to meet these targeted reductions in 2026, the interest rate applied to these Senior Notes will increase.

Finally, from time to time we establish and publicly announce goals and commitments to reduce our carbon footprint.

If we fail to achieve or improperly report on our progress toward achieving our carbon emissions reduction goals and commitments, the resulting negative publicity could adversely affect consumer preference for our products.

Finally, from time to time we establish and publicly announce goals and targets to reduce our carbon footprint.

If we fail to achieve, fail to specify or improperly report on our progress toward achieving our carbon emissions reduction goals and targets, we could be subject to lawsuits, investigations, government actions, or other claims made by public or private entities, each of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

In addition, the resulting negative publicity from any such allegations could adversely affect consumer preference for our products.

Legal and Regulatory Risk Factors

2 unchanged sentences

Changes in laws or regulations or the application thereof regarding areas such as wage and hour and environmental compliance may lead to government enforcement actions and resulting litigation by private litigants.

In addition, unknown matters, new laws and regulations, or stricter interpretations of existing laws or regulations may also materially affect our business or operations in the future, including potential COVID-19 vaccine mandates.

In addition, unknown matters, new laws and regulations, or stricter interpretations of existing laws or regulations may also materially affect our business or operations in the future.

Immigration reform continues to attract significant attention in the public arena and the U.S.

Despite our past and continuing efforts to hire only U.S.

citizens and/or persons legally authorized to work in the U.S., we may be unable to ensure that all of our employees are U.S.

citizens and/or persons legally authorized to work in the U.S.

citizens and/or persons legally authorized to work in the U.S., we may be unable to ensure that all of our employees and contractors are persons legally authorized to work in the U.S.

No assurances can be given that enforcement efforts by governmental authorities will not disrupt a portion of our workforce or operations at one or more facilities, thereby negatively impacting our business.

1 unchanged sentence

Environmental, Health and Safety

Our operations are subject to extensive and increasingly stringent federal, state, local and foreign laws and regulations pertaining to the protection of the environment, including those relating to the discharge of materials into the environment, the handling, treatment and disposal of wastes and remediation of soil and groundwater contamination.

Our operations are subject to extensive and increasingly stringent federal, state, local and foreign laws and regulations pertaining to the protection of the environment, including those relating to the discharge of materials into the environment, the handling, treatment and disposal of wastes, and the remediation of soil and groundwater contamination.

Failure to comply with these requirements could have serious consequences for us, including criminal as well as civil and administrative penalties, claims for property damage, personal injury and damage to natural resources and negative publicity.

Compliance with existing or changing environmental requirements, including more stringent limitations imposed or expected to be imposed in recently-renewed or soon-to be renewed environmental permits, will require capital expenditures for installation of new or upgraded pollution control equipment at some of our facilities.

Compliance with existing or changing environmental requirements, including more stringent limitations imposed or expected to be imposed in recently-renewed or soon-to be renewed environmental permits, may require capital expenditures for installation of new or upgraded pollution control equipment at some of our facilities.

Operations at many of our facilities require the treatment and disposal of wastewater, stormwater and agricultural and food processing wastes, the use and maintenance of refrigeration systems, including ammonia-based chillers, noise, odor and dust management, the operation of mechanized processing equipment, and other operations that potentially could affect the environment, health and safety.

Some of our facilities have been operating for many years, and were built before current environmental standards were imposed, and/or in areas that recently have become subject to residential and commercial development pressures.

Some of our facilities have been operating for many years, and were built before current environmental standards were imposed, and/or are in areas that recently have become subject to residential and commercial development pressures.

Failure to comply with current and future environmental, health and safety standards could result in the imposition of fines and penalties, and we have been subject to such sanctions from time to time.

18 unchanged sentences

The UKBA is broader in scope than the FCPA in that it directly prohibits commercial bribery (i.e.

bribing others than government officials) in addition to bribery of government officials and it does not recognize certain exceptions, notably for facilitation payments, that are permitted by the FCPA.

bribing individuals or organizations other than government officials) in addition to bribery of government officials and it does not recognize certain exceptions, notably for facilitation payments, that are permitted by the FCPA.

The UKBA also has wide jurisdiction.

7 unchanged sentences

Civil and criminal penalties may be imposed for violations of these laws.

Despite our ongoing efforts to ensure compliance with the FCPA, the UKBA and similar laws, there can be no assurance that our directors, officers, employees, agents, third-party intermediaries and the companies to which we outsource certain of our business operations, have previously complied or will comply with those laws and our anti-corruption policies or that our compliance program will be sufficient to prevent or detect bribery, and we may be ultimately held responsible for any such non-compliance.

If we or our directors or officers violate anti-corruption laws or other laws governing the conduct of

business with government entities (including local laws), we or our directors or officers may be subject to criminal and civil penalties or other remedial measures, which could harm our reputation and have a material adverse impact on our business, financial condition, results of operations and prospects.

that our compliance program will be sufficient to prevent or detect bribery, and we may be ultimately held responsible for any such non-compliance.

If we or our directors or officers violate anti-corruption laws or other laws governing the conduct of business with government entities (including local laws), we or our directors or officers may be subject to criminal and civil penalties or other remedial measures, which could harm our reputation and have a material adverse impact on our business, financial condition, results of operations and prospects.

Any actual or alleged violations of such laws could also harm our reputation or have an adverse impact on our business, financial condition, results of operations and prospects.

41 unchanged sentences

While our industry generally operates with high employee turnover, any material increases in employee turnover rates (including turnover due to any potential government-mandated COVID-19 vaccinations) or any widespread employee dissatisfaction could also have a material adverse effect on our business, financial condition and results of operations.

Labor shortages and increased turnover or increases in employee and employee-related costs could have adverse effects on our profitability.

We and our third-party vendors have experienced increased labor shortages at some of our production facilities and other locations.

Although we have historically experienced some level of ordinary course turnover of employees, the impact of the COVID-19 pandemic and resulting actions have exacerbated labor shortages and increased turnover.

Several factors have had and may continue to have adverse effects on the labor force available to us and our third-party vendors, including government regulations, which include laws and regulations related to workers’ health and safety, wage and hour practices and work authorization.

Labor shortages and increased turnover rates within the Company and our third-party vendors have led to and could in the future lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees and could negatively affect our ability to efficiently operate our production facilities or otherwise operate at full capacity and could result in downtown of our production facilities.

An overall or prolonged labor shortage, lack of skilled labor, increased turnover or labor inflation could have a material adverse impact on our operations, results of operations, liquidity or cash flows.

If we are unable to attract, hire or retain key team members or a highly skilled and diverse global workforce, it could have a negative impact on our business, financial condition or results of operations.

Our continued growth requires us to attract, hire, retain and develop key team members, including our executive officers and senior management team, and maintain a highly skilled and diverse global workforce.

We compete to attract and hire highly skilled team members and our own team members are highly sought after by our competitors and other companies.

Competition could cause us to lose talented team members, and unplanned turnover could deplete our institutional knowledge and result in increased costs due to increased competition for team members.

In addition, our compensation arrangements may not always be successful in attracting new employees or retaining our existing team members.

Stock Ownership and Financial Risk Factors

JBS USA beneficially owns a majority of our common stock and has the ability to control the vote on most matters brought before the holders of our common stock.

JBS USA beneficially owns a majority of the shares and voting power of our common stock and is entitled to appoint a majority of the members of our Board of Directors.

JBS USA Food Company (“JBS USA”) beneficially owns a majority of the shares and voting power of our common stock and is entitled to appoint a majority of the members of our Board of Directors.

As a result, subject to restrictions on its voting power and actions in a stockholders agreement between JBS USA and us and our organization documents, JBS USA has and will have the ability to control our management, policies and financing decisions, elect a majority of the members of our Board of Directors at the annual meeting and control the vote on most matters coming before the holders of our common stock.

Under the stockholders agreement between JBS USA and us, JBS USA has the ability to elect up to seven members of our Board of Directors and the other holders of our common stock have the ability to elect up to two members of our Board of Directors.

Moreover, our ultimate controlling shareholders may serve as members of our Board of Directors or as members of the board of directors or other senior management positions at any JBS companies.

JBS USA may have interests that are different from other shareholders and may vote in a way that may be adverse to our other shareholders’ interests.

6 unchanged sentences

Our ability to make payments on and to refinance our debt, including our credit facilities, will depend on our ability to generate cash in the future.

This, to a certain extent, is subject to various business factors (including, among others, the commodity prices of feed ingredients, chicken and pork) and general economic, financial, competitive, legislative, regulatory, and other factors that are beyond our control.

This, to a certain extent, is subject to various business factors (including, among others, the

commodity prices of feed ingredients, chicken and pork) and general economic, financial, competitive, legislative, regulatory, and other factors that are beyond our control.

There can be no assurance that we will be able to generate sufficient cash flow from operations or that future borrowings will be available under our credit facilities in an amount sufficient to enable us to pay our debt obligations, including obligations under our credit facilities, or to fund our other liquidity needs.

9 unchanged sentences

The FCA and other regulators and have stated that they welcome the LIBOR administrator’s action, and issued supervisory guidance emphasizing that, despite any continued publication of U.S.

dollar LIBOR through June 30, 2023, on new contracts using U.S.

dollar LIBOR through June 30, 2023, no new contracts using U.S.

dollar LIBOR should be entered into after December 31, 2021.

2 unchanged sentences

dollar LIBOR contracts would terminate before related LIBOR rates cease to be published and will allow for more time for existing contracts to mature and provide additional time to continue to prepare for the transition from LIBOR.

Although this extension provides some sense of timing, it is unclear whether or not LIBOR will cease to exist at that time, or if new methods of calculating LIBOR will be established such that it continues to exist after 2021 or if replacement conventions will be developed.

Federal Reserve, in conjunction with the Alternative

Reference Rates Committee, a steering committee comprised of large U.S.

financial institutions, is considering replacing U.S.

dollar LIBOR with a new index calculated by short-term repurchase agreements, backed by Treasury securities (“SOFR”).

On December 16, 2022, the U.S.

Federal Reserve Board adopted a final rule that states Secured Overnight Financing Rate (“SOFR”), a new index calculated by short-term repurchase agreements, will replace U.S.

dollar LIBOR after June 30, 2023.

SOFR is observed and backward-looking, which stands in contrast with LIBOR under the current methodology, which is an estimated forward-looking rate and relies, to some degree, on the expert judgment of submitting panel members.

Given that SOFR is a secured rate backed by government securities, it will be a rate that does not take into account bank credit risk (as is the case with LIBOR).

Whether or not SOFR attains market traction as a LIBOR replacement tool remains in question.

As such, the future of LIBOR at this time is uncertain.

At this time, due to a lack of consensus existing as to what rate or rates may become accepted alternatives to LIBOR, it is impossible to predict the effect of any such alternatives on our liquidity.

However, if LIBOR ceases to exist, we may need to renegotiate our credit agreements that utilize LIBOR as a factor in determining the interest rate to replace LIBOR with the new standard that is established.

Additionally, these changes may have an adverse impact on the value of or interest earned on any LIBOR-based marketable securities, loans and derivatives that are included in our financial assets and liabilities.

As LIBOR is phased out, we will need to renegotiate our credit agreements that utilize LIBOR which may have an adverse impact on the value of or interest earned on any LIBOR-based marketable securities, loans and derivatives that are included in our financial assets and liabilities.

Impairment in the carrying value of goodwill or other identifiable intangible assets could negatively affect our operating results.

7 unchanged sentences

General Risk Factors

Extreme weather, natural disasters or other events beyond our control could negatively impact our business.

Weak or unstable national or global economic conditions, including inflation, could negatively impact our business.

Our business may be adversely affected by:

• weak or volatile national or global economic conditions, including inflation;

• unfavorable currency exchange rates and interest rates;

• the lack of availability of credit on reasonable terms;

• restricted access to capital markets;

• changes in consumer spending rates and habits;

• unemployment and underemployment;

• a tight energy supply and high energy costs.

Our business could be negatively affected if efforts and initiatives of the governments of the United States and other countries to manage and stimulate the economy fail or result in worsening economic conditions.

Deteriorating economic conditions could negatively affect consumer demand for protein generally or our products specifically, consumers’ ability to afford our products, consumer habits with respect to how they spend their food dollars, and the cost and availability of raw materials we need.

Disruptions in credit and other financial markets caused by deteriorating or weak national and international economic conditions could, among other things:

• make it more difficult for us, our customers or our growers or prospective growers to obtain financing and credit on reasonable terms;

• cause lenders to change their practice with respect to the industry generally or our company specifically in terms of granting credit extensions and terms;

• impair the financial condition of our customers, suppliers or growers making it difficult for them to meet their obligations and supply raw material;

• impair the financial condition of our insurers, making it difficult or impossible for them to meet their obligations to us.

Our business may be negatively impacted by economic or other consequences from Russia’s war against Ukraine and the sanctions imposed as a response to that action.

We face risks related to the ongoing Russia-Ukraine war that began in February 2022.

The impact of the ongoing war and sanctions will not be limited to businesses that operate in Russia and Ukraine and may negatively impact other global economic markets including where we operate.

The impacts have included and may continue to include, but are not limited to, higher prices for commodities, such as food products, ingredients and energy products, increasing inflation in some countries, and disrupted trade and supply chains.

The conflict has disrupted shipments of grains, vegetable oils, fertilizer and energy products.

The impact on the agriculture markets falls into two main categories:

(1) the effect on Ukrainian crop production, as the region is key in global grain production;

and (2) the duration of the disruption in trade flows.

Safety and financing concerns in the region are restricting export execution, which is in turn forcing grain and oil demand to find alternative supply.

The duration of the war and related volatility makes global markets extremely sensitive to growing-season weather in other global grain producing regions and has led to a large risk premium in futures prices.

The continued volatility in the global markets as a result of the war has adversely impacted our costs by driving up prices, raising inflation and increasing pressure on the supply of feed ingredients and energy products throughout the global markets.

In addition, the U.S.

government and other governments in jurisdictions in which we operate have imposed sanctions and export controls against Russia, Belarus and interests therein and threatened additional sanctions and controls.

The impact of these measures, now and in the future, could adversely affect our business, supply chain or customers.

Finally, there may be increased risk of cyberattack as a result of the ongoing conflict.

We have not seen any new or heightened risk of potential cyberattacks since the outbreak of the Russia-Ukraine war.

Extreme weather, natural disasters or other events beyond our control as well as interruption by man-made problems such as power disruptions could negatively impact our business.

Bioterrorism, fire, pandemic, extreme weather or natural disasters, including droughts, floods, excessive cold or heat, hurricanes or other storms, could impair the health or growth of our flocks, production or availability of feed ingredients, or interfere with our operations due to power outages, fuel shortages, damage to our production and processing facilities or disruption of transportation channels, among other things.

1 unchanged sentence

Moreover, climate change, including the impact of global warming, has resulted in risks that include changes in weather conditions, extreme weather events and adverse impacts on agricultural production, as well as potential regulatory compliance risks, all of which could have a material adverse effect on our results of operations, financial condition and liquidity.

The British National Grid recently warned that the U.K., where the Company has significant operations, could face planned power cuts to homes and businesses throughout the winter of 2023 if the country is unable to import electricity from Europe and it struggles to attract enough gas imports to fuel its gas-fired power plants.

A significant power outage could have a material adverse impact on our business, results of operations, and financial condition.

Although we maintain incident management and disaster response plans, in the event of a major disruption caused by a man-made problem such as a power disruption, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in our development activities, lengthy interruptions in service, breaches of data security and loss of critical data, and our insurance may not cover such events or may be insufficient to compensate us for the potentially significant losses we may incur.

Unresolved Staff Comments

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors