Not surprisingly in light of the recent downturn in its sales, Harley-Davidson (NYSE: HOG) has announced it will be scaling back production later this year, including a week-long shutdown of plants in York, PA, Kansas City, MO and several in Wisconsin the week after Thanksgiving. (I doubt it is a coincidence that this is the first week of deer season in most of the Midwest. Therefore, don't expect a huge outcry from the H-D crew over the extra time off.) The company also plans other, undefined, steps to rein in production.

Shareholders who have watched HOG stock price tumble from a 52-week high of $75.87 to under $50 may take a small consolation in the announcement that the Board of Directors has approved a dividend of $.30 per share for the third quarter of 2007. This is 20% more than that paid in the second quarter, and well above the $.21 paid in the same quarter 2006.

Beef, pork and turkey producer Smithfield Foods, Inc. (NYSE: SFD) recently released 4Q 2007 earnings (June 7). Sales were up 10% to $3.1 billion, but income from continuing operations was up to just under $40 million or diluted EPS of $.35, six times the amount from 4Q 2006. Net income for the quarter was $37 million. Too bad that's not the whole story. Smithfield is in the midst of restructuring its pork raising and processing operations. Restructuring costs for that totaled $10 million for the quarter. Also, Smithfield incurred a pretax charge of $8.2 million in its beef segment, as well as losses associated with shedding it Quik-to-Fix Foods and its bioenergy business unit.

Few things are going well for Smithfield Foods. Profit margins improved in its pork segment which posted 31% volume gain in the sale of packaged pork products. Growth was especially good in the company's international markets. Gains in the hog segment were welcome given that hog production prices have gone up, while hog production was down 9% due to the effects of the hog circovirus, from which major hog producers are only now beginning to recover. Smithfield is currently reducing its domestic hog production facilities while simultaneously ramping up hog production capacity in Poland and Romania, where production costs are much lower.

The company's beef segment operated at a loss. Feeding costs (grain) were up as was the price for feeder cattle to bring to market, while severe winter weather domestically drove up production costs. The good news is that the losses in the beef segment this quarter were less than losses in the equivalent quarter a year ago.