Sanderson Farms on a sweet roll
August 27, 2014
by Keith Nunes
LAUREL, Miss. – A confluence of positive events, including lower grain costs, tight beef supplies and the impact of the porcine epidemic diarrhea virus (PEDv), propelled the earnings for Sanderson Farms Inc. during the third quarter of fiscal 2014. Looking ahead to the fourth quarter and fiscal 2015, Joe Sanderson Jr., chairman and CEO, was optimistic about market conditions.
“While the crop is certainly not yet in the bin, and we have priced none of our fiscal 2015 needs at this time, had we priced all of our fiscal 2015 needs at yesterday’s close, our cash grain cost during fiscal 2015 would be $50 million lower than this fiscal year,” he said in a conference call with securities analysts on Aug. 27.
He added that he anticipates demand will be strong in 2015.
“We think retail will continue to be good, and what we really want is people start going out to eat a little more,” Sanderson said. “If the economy will improve another notch and labor participation rates improve and wages improve, which we hope that to start inching up a little bit, food service demand should improve a little bit. So I am optimistic about demand.”
Lampkin Butts, president and COO for Sanderson Farms, said he did not anticipate the recent ban of US chicken imports by Russia to have an effect.
“The Russian market accounts for less than 7 percent of the industry's total export markets, and we believe the industry and our company can find alternative markets for product otherwise sold to Russian customers,” he said.