Sanderson Farms net income more than doubles in Q1 2017

Sanderson Farms reported a net income of $23.2 million for the first quarter of fiscal year 2017, more than doubling its net income of $10.7 million recorded during the first quarter of the previous year.

The company’s net sales for the quarter also increased. Sanderson Farms achieved net sales of $688.3 million for the first quarter, while its first quarter net sales during fiscal year 2016 were $605.2 million.

"Our results for the first quarter reflect improved market prices for dark meat products sold from our big bird deboning plants compared with last year's first quarter," said

Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms.

"Leg quarter prices during last year's first fiscal quarter reflected avian influenza-related bans on United States poultry products by many of our export partners, which bans, except for China, have been lifted. Poultry market prices for our tray pack products sold to retail grocery store customers were only slightly lower when compared with the same period a year ago. On the other hand, the food service market remains weak. Traffic numbers through all categories of food service continue to trend lower, and market prices for boneless breast meat reflect that weakness. Demand and prices for jumbo wings were seasonally strong during the quarter."

According to Sanderson, overall market prices for poultry products were higher during the first quarter compared with the same period last year. Compared with the first fiscal quarter of 2016, the average whole bird price used as the base of a portion of the company's retail tray pack pricing formulas was approximately 2.7 percent lower, boneless breast meat prices were approximately 4.6 percent lower, the average market price for bulk leg quarters increased by approximately 33.1 percent, and jumbo wing prices were higher by 14.3 percent. The company's average feed cost per pound of poultry products processed decreased 1.3 cents per pound, or 4.9 percent, compared with the first quarter of fiscal 2016, and prices paid for corn and soybean meal, the company's primary feed ingredients, decreased 4.9 percent and increased 1.9 percent, respectively, compared with the first quarter of fiscal 2016.

"Record corn and soybean crops harvested in the United States last fall contributed to healthy soybean and corn balance tables heading into the 2017 planting season," added Sanderson. "Strong export demand, however, has supported higher prices for both corn and soybeans despite record harvests and ample supplies of both grains.