Higher poultry prices lift Sanderson Farms' earnings
Feb. 23, 2017
by Erica Shaffer
Sanderson Farms also revealed a request for information submitted by the Florida Attorney General.
LAUREL, Miss. – Higher prices for poultry, especially dark meat products, boosted first quarter net income and net sales at Sanderson Farms Inc.
For the quarter ended Jan. 31, 2017, Sanderson reported net income of $23.2 million, $1.02 per share compared with net income of $10.7 million, or $0.47 per share in the first quarter of 2016.
Net sales for the period were $688.3 million, compared with $605.2 million in the year-ago period.
Joe F. Sanderson Jr., chairman and CEO, said overall market prices for poultry products were higher during the most recent quarter compared with the same period in 2016. He said the company’s results also reflected higher prices for dark meat products.
“Our results for the first quarter reflect improved market prices for dark meat products sold from our big bird deboning plants compared with last year’s first quarter,” Sanderson said in a statement. “Leg quarter prices during last year’s first fiscal quarter reflected avian influenza-related bans on United States poultry products by many of our export partners, which bans, except for China, have been lifted.
“Poultry market prices for our tray pack products sold to retail grocery store customers were only slightly lower when compared with the same period a year ago,” he added. “On the other hand, the foodservice market remains weak. Traffic numbers through all categories of foodservice continue to trend lower, and market prices for boneless breast meat reflect that weakness. Demand and prices for jumbo wings were seasonally strong during the quarter.”
Sanderson noted that the average market price for bulk leg quarters advanced approximately 33.1 percent while jumbo wing prices were 14.3 percent higher compared to the first quarter of 2016. The average whole bird price used as the base of a portion of the Sanderson’s retail tray pack pricing formulas declined approximately 2.7 percent, while boneless breast meat prices were approximately 4.6 percent lower.
In a regulatory filing with the Securities and Exchange Commission (SEC) Sanderson revealed that the company received a civil investigative notice from the Florida Attorney General’s office on Feb. 21.
“The company intends to cooperate fully with the investigative demand,” Sanderson said in the filing. “Among other things, the demand seeks information related to the Georgia Dock Index and other information on poultry and poultry products published by the Georgia Department of Agriculture and its Poultry Market News division.”
On Feb. 22, the Georgia Dept. of Agriculture (GDA) said it would cease efforts to publish the agency’s new Georgia Premium Poultry Pricing Index (GPPPI) due to a lack of available data. “GDA maintains a high degree of confidence in the developed model and appreciates the cooperation and valuable input from the wide range of economists and market experts who assisted with this effort,” the agency said on its website.