Sanderson Farms reported a net income of $164.8 million for the third quarter of fiscal year 2021, a sharp improvement from the $32.8 million from the same quarter of 2020.
At the same time, the company reported net sales of $1.4 billion, up from the $957 million reported one year ago. The second quarter ended on July 31, and the company announced those results in a press release issued on August 26.
“Our financial results for the third quarter of fiscal 2021 reflect significantly improved demand and prices for products sold to food service customers, continued strong demand for products sold to retail grocery store customers, reduced volumes due to planned egg set reductions that we implemented during the early stages of the COVID-19 pandemic, and higher costs of feed grains,” stated Joe F. Sanderson, Jr., chairman and CEO of Sanderson Farms. “Our results also reflect superior execution in all areas of our business, including live production, processing and sales. We benefitted from improved market conditions for the products we sell to foodservice customers due to the phased reopening of more food service establishments across the nation. While food service customer demand has improved with more people dining out, consumers also continue to prepare meals at home. As a result, demand for the products we sell to retail grocery store customers remained strong throughout the quarter.”
“We produced approximately 1.21 billion pounds during the third quarter, which is 53.2 million, or 4.2 percent, fewer pounds than we would have produced at full production. This reduction in volume is attributable to planned egg set reductions implemented during the early stages of the COVID-19 pandemic to compensate for the decrease in demand from our food service customers.”
According to Sanderson, overall realized prices for chicken products sold to retail grocery store customers remained strong during the third quarter, and volumes reflected the strong demand. In addition, the quoted commodity markets for products sold to foodservice customers were higher across the board, reflecting the improved demand from foodservice customers.
The pending deal Sanderson Farms, which is set to be acquired through a joint venture between Cargill and Continental Grain Company and merged with Wayne Farms, was not addressed in the press release.
Ordinarily, Sanderson Farms would host an earnings call with analysts each time the quarterly financial results were released, but no such call was hosted to coincide with the third quarter results. The company also cancelled its annual investor conference, which was initially scheduled for October.
The pending sale of Sanderson Farms is expected to close by the end of 2021 or early in 2022, and will be subject to regulatory approval.