Net income for the first half of the year totaled $50.9 million, or $2.39 per fully diluted share, compared with net income of $19.5 million, or $0.93 per fully diluted share, for the first six months of last year. Net sales for the first six months of fiscal 2010 were $907.2 million compared with $815.6 million for the first half of fiscal 2009.
“We are pleased with the performance of Sanderson Farms during the second fiscal quarter of 2010," said Joe F. Sanderson Jr., chairman and chief executive officer of Sanderson Farms Inc. “Our results reflect the efficient management of our operations by our managers, employees and contract producers. Demand for chicken at retail grocery stores remains strong and the ongoing issues we and our industry face in export markets have not yet significantly disrupted the markets.
“As has been the case for two years, demand from some foodservice customers continues to be adversely affected by the economic downturn as demand for protein consumed away from home remains soft,” he added. “Market prices for boneless breast meat strengthened seasonally and due to limited supply during the quarter. While our net sales price and feed costs did not change significantly during the quarter compared to last year’s second fiscal quarter, we sold 16% more pounds of fresh chicken during the quarter, and the additional volume allowed us to significantly reduce our average non-feed related costs per pound.”
Market prices for poultry products were mixed during the second quarter of fiscal 2010 compared with the same quarter a year ago, according to Mr. Sanderson. As measured by a simple average of the Georgia dock price for whole chickens, prices decreased approximately 2% in the company's second fiscal quarter compared with the same period in 2009.
Despite the ongoing Russian embargo of U.S. chicken, bulk leg quarter market prices were flat with last year's second quarter. Boneless breast meat prices during the quarter were approximately 8.6% higher than the prior year period. Jumbo wing prices, while relatively strong, retreated from their all time high in January and were 5.8% lower for the quarter compared to last year.
“We are cautiously optimistic as we head into the summer months and what is typically a period of better demand for chicken,” Mr. Sanderson said. “Broiler egg sets continue to indicate manageable supplies over the short term, while breeder placements point to reasonable supplies for the next few months. Progress continues on our new Kinston, N.C. complex, and we placed our first breeder flock in April. The plant is on schedule to begin processing chickens in January of next year.
“As announced in March, we also look forward to the next phase of our growth, which is our plans for the construction of a new big bird deboning facility in Goldsboro, N.C., subject to previously announced contingencies,” he continued. “Together, the two North Carolina plants will add 30% more capacity and support our growth through 2014.”