Late last week, Russia and the U.S. reached an agreement to reopen the market to U.S. chicken producers, however, it is not clear when trade will resume. As of Jan. 1, Russia had banned all chlorine-treated poultry imports banning the 600,000 tons of poultry allowed from the U.S. under revised quotas.
Zaslow said a meeting with Sanderson Farms' management earlier this week leads him to believe leg and dark-meat prices will rise by at least 10 cents per lb. Sanderson Farms is well positioned to quickly resume exports with Russia because it has plants that are in compliance with Russia's safety terms.
What’s more, the 10-cent-per-lb rise in prices could mean an extra 40 cents a share to his estimate for Sanderson's fourth-quarter earnings of 97 cents per share.
Sanderson Farms will also benefit from lower feed costs as corn planting is ahead of its historical pace, meaning more supply and lower prices.
Zaslow maintained his fiscal 2010 earnings per share estimate of $5.33 and fiscal 2011 estimate of $6.03. Analysts on average expect the company to earn $5.59 per share in fiscal 2010, and $5.87 in 2011, according to Reuters.