Joe F. Sanderson Jr., CEO of Sanderson Farms, revealed aspects of the poultry and feed industries that the company will closely monitor during the 2021 fiscal year.
Sanderson shared those thoughts while expressing optimism during the company’s quarterly earnings call on December 17. The Sanderson Farms 2020 fiscal year concluded on October 31.
South American corn and soybean crops
As of the time of the conference call, expectations for those crops in Brazil and the rest of South America are cautious as there are pockets of dry hot weather in South America. “It is still early, but we will keep an eye on those crops,” said Sanderson.
The size of those South American crops will affect export demand for domestic supplies, he added.
Planting intentions in the United States
Sanderson said the company will keep an eye on the United States planting intention reports in March. The U.S. Department of Agriculture (USDA), he said, project that corn acres will be essentially flat at 90 million acres in 2021, while soybean acres will increase 7% to 89 million acres. If realized, these acres will be the second highest acreage planted on record and would be consistent with strong export demand, lower ending stocks and higher-priced feed, he added.
Chicken production numbers
It is estimated that the poultry industry will produce approximately 1% more pounds of chicken during the calendar 2021 year than it did in 2020. Sanderson Farms believes the USDA’s estimate is reasonable, he said.
“We will of course also be watching chicken markets. Market prices for boneless breast meat produced at our big bird plants for the food service market have moved to counter seasonally higher over the past few weeks. The same is true for dark meat prices,” he said.
Demand from foodservice customers
Sanderson said the company expects demand from foodservice customers to remain under pressure until the COVID-19 vaccine is widely distributed and consumers feel comfortable going out to eat again in large numbers.
Reports of another chicken sandwich war in 2021 and the quick service restaurant market are promising, he said, adding, “we wish all the participants much success.”
