LAUREL, MISS. — Sanderson Farms, Inc. narrowed its loss during the first quarter but still faced pressure from high grain and feed costs as well as week food service demand for chicken.

For the first quarter ended Jan. 31, the company suffered a loss of $6,943,000, which compared with a loss of $7,989,000 during the same quarter of the previous year. Sales for the quarter were $595,760,000, up 15% from $517,826,000 during the same quarter of the previous year.

“Our results for the first quarter of fiscal 2013 reflect improving but still challenging conditions for our industry,” said Joe F. Sanderson Jr., chairman and chief executive officer. “While we experienced higher poultry market prices than the same period a year ago, our grain costs were also higher. Retail demand for chicken has remained steady, but we continue to see weak food service demand. We believe food service demand will remain under pressure until the national employment environment improves. While grain prices have retreated from the highs they set last August, we experienced higher feed costs during the first quarter, and these higher costs continue to affect our profitability.”

Mr. Sanderson also said the company has been running its plants at about 94% capacity since October, which has negatively impacted costs. In order to meet customer demand and improve cost structure they will move plants to full production in June, he said.