Q3 earnings sharply higher at Sanderson Farms
LAUREL, Miss. – Third-quarter profits at Sanderson Farms Inc. surged on higher poultry prices.
For the third quarter ended July 31, Sanderson reported net income of $67.9 million, or $2.95 per share, compared with net income of $28.7 million, or $1.25 per share. Net sales for the third quarter were $739 million compared with $624.9 million for the comparable year ago period.
“Sanderson Farms’ financial results for the third quarter of fiscal 2013 reflect improved market conditions when compared to last year’s third quarter,” said Joe Sanderson, Jr., chairman and CEO of Sanderson Farms. “Market prices for poultry products were higher than the third quarter of fiscal 2012, as the Georgia Dock whole bird price remained historically high during the quarter. The Georgia Dock price reflects steady retail grocery store demand. In addition, market prices for wings, while below last year’s third quarter levels, improved during the quarter. Boneless breast meat prices remained well above last year’s prices and peaked in May as several quick serve restaurants and other food service establishments featured chicken on their menus.”
The company noted that poultry prices for the quarter were higher compared to the same quarter in fiscal 2012. Georgia dock price for whole chickens advanced 11.6 percent compared with a year ago, while boneless breast prices increased an average of 32.3 percent. Jumbo wing prices declined 19.3 percent to average $1.28 per lb. compared to the average of $1.59 per lb. a year ago. The average quoted market price for bulk leg quarters was essentially flat during the quarter, according to the company.
Sanderson added that while poultry prices improved, grain prices continued to climb compared to the same quarter a year ago. Sanderson Farm's corn costs increased 8.1 percent compared with the third quarter a year ago, while the price for soybean meal increased 10.3 percent, the company said. For the nine months ended July 31, 2013, the company’s cash prices for corn increased 13.2 percent and soybean meal increased 29.3 percent when compared to the nine months ended July 31, 2012.
“Market prices for grain have remained high through most of August, but favorable growing conditions this summer have fueled considerable optimism about this year’s corn and soybean crops,” Sanderson said. “While the available grain quantity and prices during the coming months will ultimately depend on this year’s final crop performance, prices have recently moved lower. If we priced all of our needs for the remainder of the fiscal year at yesterday’s market prices, cash paid for feed grains would be approximately $79 million higher during fiscal 2013 compared to fiscal 2012.
“However, fourth-quarter cash market prices would be $65 million lower than last year’s fourth quarter,” he added. “We have priced our grain needs through August but will be on the market for our needs starting in September.”
In other company news Sanderson Farms reported that the due diligence and related permitting processes are mostly complete for a poultry facility in Palestine, Texas.
“Most conditions precedent to breaking ground on the new poultry complex have been met, and we hope to finalize a date to begin construction of the new feed mill, hatchery, processing plant and wastewater treatment facilities in September, subject to final approval by our board of directors,” Sanderson said.