For the first quarter of fiscal 2012 versus the same period last year, quoted market price changes for products were leg quarters increased 27.4 percent, boneless breast decreased 17.6 percent, breast tenders decreased 11.8 percent, wing markets decreased 40.3 percent and whole birds without giblets were unchanged.
Cost of sales for the first quarter of fiscal 2012 increased 27.1 percent as compared with the same period last year, from $68.2 million to $86.7 million. Feed ingredient prices for broilers processed in the first quarter of fiscal 2012, which represented 46 percent of the total cost of sales, increased 68.3 percent, or $16.3 million, compared to the first quarter of fiscal 2011.
Profitability continues to be challenged by high feed cost accentuated by broiler markets pressured by over production. Effective at the end of August, Cagle's will have executed a further reduction in production at its Pine Mountain Valley plant resulting in the company processing 22 percent less head than capacity. Towards the end of July, industry began to react in kind with egg sets 6 percent less than the same period in 2010. In the coming months, such industry cut backs should have a positive effect on markets and final margins.