NEW YORK – For Sanderson Farms, Inc., growth in poultry production lies in Palestine, Texas. Joe Sanderson, Jr., chairman and CEO, commented on the company’s outlook for the poultry industry in 2015 heading into 2016 during the BMO Farm to Market Conference in New York.
The Laurel, Miss.-based company built a big-bird deboning poultry complex in Palestine at a cost of more than $100 million. The facility has a processing capacity of more than 1 million head of chickens per week. Sanderson said the Palestine plant will be the source of growth in the company’s poultry production.
“Our growth will be primarily Palestine continuing to ramp up production,” Sanderson said, “nothing other than that.
“We will begin construction this fall in St. Pauls (NC), and they will begin in the fall of 2016, but it'll be meaningless what they'll do in 2016,” he added. “They'll be playing, training, in 2016. But our growth in 2016 will be primarily Palestine.”
Sanderson estimated the poultry industry would see 3 percent more head produced and another 3 percent more pounds in 2015 even though pullet placements may be higher than that.
“We think the industry's going to be approaching a processing wall in 2016, which we estimate — and this is no more than that — we think 215 million, 216 million eggs in the 19-state area is about where the industry is on processing capacity,” Sanderson said. “And so we think we can go up another 3 percent on headcount in 2016, and probably not so much on weight.”
That's because the weight jump for poultry occurred this year primarily in the big bird deboning segment. Sanderson forecast poultry weight declines during the summer months and a rebound in the fall.
“But we don't think we'll see the weight gains in 2016 that we saw in 2015,” he noted. “So total expansion in 2016 will be some less than it was in 2015.”
During the conference Q&A session, Sanderson addressed the issue of succession at the company. He said Sanderson Farms’ board has a succession plan in place. However, no member of the Sanderson family will succeed him because he is the last Sanderson in the family.
“But we have a succession plan — or the board has one — and we have multiple layers of managers under us,” Sanderson explained. “We have a training program, a mentoring program, with multiple layers of managers that have been through it, that are ready to move up. For the St. Pauls plant, we have all the managers in place, the human capital in place, for that. But actually, we keep 100 college graduates on the payroll in training; and then we have another 50 advanced trainees in training all the time, that allows us to grow the company.”
Sanderson said succession plans also are in place beyond the top three executives. Of 11 members of the executive committee, he said, the company has replacements for nine of the 11.
He said the board discusses once or twice a year succession plans for those executives “...should something happen to one of them.”