Mexico poultry producer and processor Industrias Bachoco S.A.B. de C.V. has reported a net income of Ps155 million (US$13 million) for the first quarter of 2011, coming in lower than the Ps276 million (US$23.2 million) reported in the first quarter of 2010. 

The company's chicken and egg business lines were both affected by economic conditions, according to CEO Rodolfo Ramos. "Our chicken business line was affected by a slightly lower demand due mainly to seasonal factors," said Ramos. Even so, Bachoco's chicken sales increased 3.6% in the first quarter of 2011 when compared to the same time in 2010. Table egg products, however, saw an 18.2% decrease in sales in the first quarter of 2011, affected by a 9.9% decrease in egg prices and a 9.2% decrease in volume. "The margins for our eggs business line were affected due to a negative streak of oversupply, impacting volume, sales and prices for these products," said Ramos.


Overall, said Ramos, the company had a challenging start to 2011. "The first quarter of 2011 was difficult for our company," he said. "Our main challenge was to mitigate the negative impact caused by high prices of corn and soybean meal during this period, resulting in higher cost of sales." Bachoco offset the challenging conditions with hedging strategies, control of operating expenses and the optimization of its product mix, said Ramos.