The net loss for the first half of the year totaled $49.8 million, or $2.25 per share, compared with net income of $50.9 million, or $2.39 per share, for the first six months of last year. Net sales for the first six months of fiscal 2011 were $907.1 million compared with $907.2 million for the same period of fiscal 2010.
"The results for our second quarter of fiscal 2011 reflect current market conditions and the overall economic environment," said Joe Sanderson Jr., chairman and CEO. "Despite slightly higher volume as a result of our new North Carolina facility, our net sales were down 1.6 percent compared with the second quarter of fiscal 2010 reflecting overall lower average sales prices of chicken.
“Retail grocery store demand for chicken has remained strong,” he added. “Export demand improved during the second quarter compared with the same period last year when US poultry meat was banned from Russia. Demand from our food service customers has remained weak, and we expect this trend will continue with rising gas prices and high unemployment keeping consumers from dining away from home.
"Our profitability for the second quarter was also adversely affected by the significant increase in our feed costs,” he continued. “Feed costs in flocks sold increased 41.3 percent compared to last year's second fiscal quarter, and we expect grain prices to remain high and volatile for at least the rest of this year, as there is no margin for error with the 2011 grain crop.”
Market prices for poultry products were mixed but lower overall during the second quarter of fiscal 2011 compared with the same quarter a year ago. As measured by an average of the Georgia dock price for whole chickens, prices increased approximately 2.0 percent in the company's second fiscal quarter compared with the same period in 2010.
Bulk leg quarter market prices were 17.7 percent higher compared with last year's second quarter, primarily due to resuming export volume to Russia. Boneless breast meat prices during the second quarter were 10.6 percent lower than the prior-year period. Jumbo wing prices have remained very weak and were down 45.5 percent for the second quarter of 2011 compared with the same period last year.
"We are pleased with the continued progress at our Kinston, NC, facility,” Sanderson said. “We began processing chickens in January and this plant is now operating at about 25 percent capacity. We expect to meet our scheduled production goal to reach full capacity in January 2012.”