Sanderson Farms reports 2011 net loss
Company sees record sales, but high feed costs, low demand
Sanderson Farms reported a net loss of $127.1 million for the 2011 fiscal year (ending October 31, 2011), in spite of reporting record net sales of $1.978 billion, according to the company's year-end financial report.
"Our profitability was affected by the global economic environment and difficult market conditions for our industry," said Sanderson Farms. "Costs for our feed ingredients, which were already higher than historical averages in the previous year, accelerated through the year. In addition, consumers remained cautious in a still uncertain economy, which continues to negatively affect demand for our products sold to food service customers and restaurants."
The company processed 2.8 billion pounds of dressed poultry in 2011, compared with 2.6 billion pounds in 2010. However, the average sales price for poultry was down 4 percent while the average cost per pound was up 20 percent. For the year, Sanderson Farms paid over $335.8 million more for feed grain compared with fiscal 2010, and the company's feed costs per pound of chicken sold were up by 10.6 cents, 38.8 percent.