Sanderson says it’s not best time to build poultry plant

With the current demand for chicken products, the CEO of Sanderson Farms said the company needs to have a new plant now.

However, he added, certain economic factors do not make now the right time to build one.

Speaking during the Goldman Sachs Global Staples Forum last week, Sanderson Farms Chairman and Chief Executive Officer Joe F. Sanderson Jr. addressed a question on new plant construction. The company has already made it known that it intends to build a new plant, but had not yet made any announcements on where that plant will be.

“We just have a couple more things to check out, but we’re very close,” Sanderson said.

And once a “couple more steps” are taken, an announcement about the location could be made.

But, even if an announcement is made, when construction might begin could still be up in the air. He said one thing the company wants to watch is the outcome of the next harvest of corn and soybeans, key feed ingredients.

But also, the cost of construction materials – particularly concrete, steel and lumber – might delay the building of a new plant.

“Right now is not a good time to build a plant,” said Sanderson. “Everybody in the world is building right now, particularly lumber and single family dwellings. While we need a plant right now – I need a plant to open up next week – but it is not a good time to be building a processing plant.”

This is not the first time Sanderson has expressed concerns about economic factors affecting the price of building materials.

In June 2019, speaking during the Baird Global Consumer, Technology & Services Conference, he said tariffs on steel made it a bad time to construct a new plant, feed mill or hatchery.

Headquartered in Laurel, Mississippi, Sanderson Farms is the third largest poultry company in the United States.

Sanderson also discussed the high demand for chicken wings and complications that can be experienced when breeding stock and pullets are raised as part of no antibiotics ever (NAE) programs during the Goldman Sachs Global Staples Forum.