Seaboard reports $19 million loss on Butterball

Seaboard Foods reported a $19 million loss on its investment in Butterball during the third quarter of fiscal year 2018.

Roy Graber Headshot
Photo courtesy of Butterball
Photo courtesy of Butterball

Seaboard Foods reported a $19 million loss on its investment in Butterball during the third quarter of fiscal year 2018.

According to Seaboard Foods’ Form 10-Q filing for the quarter, which ended September 29, its loss of $19 million were primarily a result of lower volumes of turkey products sold in 2018 and higher logistics and production costs, partially offset by Seaboard’s proportionate share of the Montgomery, Illinois, plant closure impairment charge of $1 million during 2017.

The Montgomery facility has since been acquired by Carl Buddig and Company.

The 10-Q, released on October 31, noted that Butterball net sales for the quarter were at $399 million, down from the $439 million recorded during the same quarter of fiscal year 2017.

The company further stated that it would not be able to predict future market prices for turkey products or the cost of feed, and therefore, it could not predict if the turkey segment would be profitable for the remainder of the 2018 fiscal year.

Hurricane Florence, which struck during Seaboard’s third quarter of fiscal year 2018, did impact Butterball operations, but specifics on the severity of storm-related losses were not included in the filing. However, the company, in September, stated: “Many of our North Carolina-based processing plants, hatcheries and feed mills have been impacted by the storm, and we continue to see flooding and power outages throughout the region. This has impacted much of our North Carolina operations.”

Butterball, according to WATT PoultryUSA’s 2018 Top Turkey Companies rankings, is the largest turkey company in the United States. In 2017, the company slaughtered 1.355 billion pounds of live turkeys, a 1.81 percent decrease from 2016. Its closest competitor, Jennie-O Turkey Store, slaughtered 1.215 billion pounds in 2017, an annual production decrease of 4.71 percent.

Butterball is headquartered in Garner, North Carolina. It operates four slaughter plants, seven processing plants and five cooking facilities located in North Carolina, Arkansas, Missouri and Illinois.

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