Sanderson Farms reports net loss first quarter 2012
Market improving, but costs still up and conditions still challenging, says CEO
Sanderson Farms Inc. reported an $8 million net loss in the first quarter of 2012, an improvement from the $33.6 million net loss the company reported in the first quarter of 2011, according to Sanderson's latest financial report.
Market prices for poultry products were higher during the first quarter of fiscal 2012 compared with the same period of fiscal 2011, according to the report. A simple average of the Georgia dock price for whole chickens was approximately 5.3 percent higher in the company's first fiscal quarter compared with the same period in 2011. Boneless breast meat prices during the quarter were approximately 7.9 percent higher than in 2011, while the average market price for bulk leg quarters increased approximately 41.4 percent. Jumbo wing prices, which averaged $1.43 per pound, were higher by 44 percent compared with 2011's first fiscal quarter.
"Our results for the first quarter of fiscal 2012 reflect improved, but still challenging, conditions for our industry," said Joe F. Sanderson Jr., chairman and CEO of Sanderson. "We experienced higher poultry market prices than the same period a year ago. While retail demand for chicken has remained steady, we continue to see weak food service demand, and we believe food service demand will remain under pressure until the national employment environment improves. Weak food service demand and ample supplies continue to weigh on market prices for boneless breast meat produced at our food service plants. While grain prices have retreated from the highs they set last fall, we also experienced higher feed costs during the first quarter, and this continues to affect our profitability."
Sanderson's average feed cost per pound of poultry products sold increased 16.7 percent compared to the first fiscal quarter of fiscal 2011, and prices paid for corn and soybean meal increased 11.6 percent and decreased 1.2 percent, respectively, compared with the first quarter of fiscal 2011.