Sanderson Farms Inc. posted a first-quarter loss of $33.6 million compared with a year-earlier profit of $15.8 million, due largely to an excess of chicken brought on by slow restaurant sales and increased feed prices, according to the company.
Prices for breast meat, commonly sold to restaurants, were down 3.1% in the first quarter ended Jan. 31, and wing prices were down nearly 37%. "We expect this trend will remain until the national unemployment rate improves," said CEO Joe Sanderson. "Consumers are simply not dining out as frequently, and restaurant traffic has remained under pressure." At the same time, corn prices reached $6.50 a bushel during the quarter, up nearly 80% from a year earlier.
Sanderson recently completed a Kinston, N.C., plant that started operation in January and is expected to be at full production in 2012. The company said it will delay construction of a second North Carolina plant due to concerns about corn's cost and availability.