COVID-19 challenges led to increased Butterball losses

Seaboard Corporation reported wider losses on its investment in Butterball during the second quarter of fiscal year 2020, citing challenges from the COVID-19 pandemic -- such as a decline in foodservice sales and staffing issues -- as a major factor.

Roy Graber Headshot
(kolesnikov, Bigstock)
(kolesnikov, Bigstock)

Seaboard Corporation reported wider losses on its investment in Butterball during the second quarter of fiscal year 2020, citing challenges from the COVID-19 pandemic -- such as a decline in foodservice sales and staffing issues -- as a major factor.

According to the Form 10-Q on the Seaboard Corporation Investor Relations webpage, the company reported that Butterball saw its net sales decrease for the three-month period ending June 27 when compared to the second quarter of fiscal year 2019. The net sales for the most recent quarter were reported at $327 million, compared to net sales of $343 million for the second quarter of 2019.

The form showed Butterball had a net loss of $27 million for the quarter, compared to a net loss of $16 million for the same period of 2019. Seaboard’s turkey segment, accounted for using the equity method, represents Seaboard’s investment in Butterball. The segment’s loss from affiliates was $14 million for the quarter, compared to a loss from affiliates of $8 million one year ago.

“This increase in loss from affiliates for the three month period … was primarily the result of lower volumes of turkey products sold, related to a decline in foodservice demand and higher production costs primarily related to labor,” the company stated. “The increase in loss for the six-month period of 2020 compared to the same period in 2019 was primarily due to lower volumes of turkey products sold and higher production costs, partially offset by overall higher prices on stronger sales mix with more value-added turkey products sold.”

Seaboard Corporation, according to the WATTPoultry.com Top Companies Database, owns a 50% non-controlling stake in Butterball, the largest turkey company in the United States.

Keeping the unpredictability of future market prices for turkey products, the cost of feed, and the ongoing impacts of the COVID-19 pandemic, Seaboard stated that it did not anticipate that the turkey segment would be profitable for the remainder of 2020.

View our continuing coverage of the coronavirus/COVID-19 pandemic.

 

Page 1 of 1590
Next Page