Sanderson Farms Inc. has reported a net income of $28.7 million for the third quarter of fiscal year 2012, up significantly from a net loss of $55.7 million in the third quarter of fiscal year 2011, according to the company's latest financial report.
The improved number reflected improved market conditions compared to 2011, said Joe F. Sanderson Jr., chairman and CEO. "Market prices for poultry products were higher than the third quarter of fiscal 2011, as the Georgia Dock whole bird price reached historic high prices during the quarter," he said. "These prices reflect steady retail grocery store demand and lower production. In addition, market prices for wings continued a strong counter seasonal upward trend. While retail grocery store demand has remained steady, food service demand remains sluggish, keeping the market price for boneless breast meat under pressure during the third quarter. Boneless breast meat prices have strengthened during August."
Challenges are still ahead, however. "Market prices for grain are at historic highs, and ongoing drought conditions across much of the country have created considerable uncertainty regarding this year's corn and soybean crops," said Sanderson. "While the quantity available and prices we will pay for grain during the coming months will ultimately depend on this year's final crop performance, prices are certain to be much higher than those paid for grain this fiscal year." Market prices for chicken will remain high, he said, but not high enough to offset input costs. Sanderson Farms has reduced egg sets by 2 percent across all divisions and plans to run its plants at 6 percent below capacity until market conditions improve.