Seaboard Foods reported a loss of $21 million on its investment in Butterball during 2019.
Seaboard Foods owns a 50% non-controlling interest in Butterball, the largest turkey company In the United States.
The losses on Butterball have grown from its losses faced during the two previous years. 2018 losses amounted to $16 million, while losses in 2017 were around $4 million.
Seaboard announced its 2019 financial results on February 19.
According to Seaboard, the increase in loss from affiliate for 2019 compared to 2018 was primarily the result of higher production and other costs, including interest, partially offset by higher prices for turkey products sold.
The company also noted in its report that it cannot predict if the turkey business will be profitable in 2020, based on the unpredictability of future market prices for turkey products, the cost of feed -- which Seaboard Foods says is the largest input cost in raising turkeys -- or other market conditions.
Butterball, according to the WATTAgNet Top Poultry Companies Database, slaughtered 1.304 billion pounds of live turkeys in 2019 – a decrease of about 2% when compared to 2018. Butterball employs more than 7,300 people.
Three Butterball employees were recently honored at the 2020 International Production & Processing Expo (IPPE) in Atlanta, Georgia. Butterball Senior Veterinarian Dr. Eric Gonder received the Lamplighter Award. Jeff Niedermeyer, quality assurance lab manager, and Coltin Caraway, a nutritionist, were recognized by IPPE’s “30 Under 30” program for their professional leadership qualities within the meat and poultry manufacturing industry.
The company in October launched its inaugural corporate social responsibility report, “The Butterball Way,” which showcases how Butterball delivered responsible, sustainable food and agriculture practices in 2018.
Butterball’s financial results in contrast to Jennie-O’s
While Butterball reported a lack of profitability in 2019, its closest competitor, Jennie-O Turkey Store, reported increased profitability during the past two quarters. Jennie-O Turkey Store parent company Hormel Foods released its financial results on February 20.
For the first quarter of fiscal year 2020, which ended on January 26, Jennie-O Turkey Store recorded a profit of about $38.6 million, a 2% improvement when compared to the segment profit of $37.9 million for the first quarter of 2019. Volumes improved 8%, while net sales rose 3%.
