Sanderson Farms Q3 earnings climb 7 %
Aug. 25, 2016
by Erica Shaffer
LAUREL, Miss. – Sanderson Farms Inc. reported a 7 percent gain in net income for the third quarter despite headwinds that included flat demand for poultry at home, weak demand abroad and lower prices for some poultry parts.
For the third quarter ended July 31, Sanderson Farms reported net income of $54.7 million, or $2.42 per share, compared with net income of $50.9 million, or $2.27 per share, for the third quarter of fiscal 2015.
Net sales for the quarter were $728.0 million compared with $739.9 million for the same year-ago period.
Also during the quarter, prices paid for corn and soybeans, the company’s primary feed ingredients, increased 2.5 percent and decreased 6.9 percent respectively.
Joe F. Sanderson, chairman and CEO, said the company’s third quarter results reflected a continued favorable supply-demand balance for fresh chicken sold to grocery store customers. He said that the Georgia Dock whole bird price was lower on average compared to the third quarter of 2015, but remained strong during the most recent quarter.
“Market prices for products from our plants that process a larger bird were mixed during the quarter when compared with last year’s third fiscal quarter,” Sanderson said in a news release. “Bulk leg quarter prices came under pressure during last year’s third fiscal quarter as a result of weak export demand due to bans on United States poultry products related to the discovery of avian influenza in the United States, a relatively strong United States dollar and lower oil revenue in countries with oil-based economies.
“Market prices for bulk leg quarters were higher this year as all avian influenza-related import bans have been lifted except for China’s, but prices remain below historical averages as the other headwinds remain,” he added. “Foodservice traffic and demand in the United States remain stubbornly static, and flat demand combined with additional industry production and higher domestic poultry supplies as a result of lower exports kept a lid on market prices for boneless breast meat during our third fiscal quarter. However, market prices for boneless breast meat have moved significantly higher during August.”
Sanderson said the average Georgia Dock price for whole chickens was approximately 3.6 percent lower, while prices for boneless breast meat were lower by about 12.7 percent. The Georgia Dock average market price for bulk leg quarters jumped 29.6 percent, and jumbo wing prices retreated by about 3.6 percent.