LAUREL, MISS. — Chicken processor Sanderson Farms, Inc., saw its earnings more than double during the second quarter of fiscal 2014. A combination of lower feed costs combined with higher prices for beef and pork propelled the company during the quarter.
“Our net sales were 6.4% higher compared with the second quarter of fiscal 2013, reflecting increased volume offset by slightly lower market prices,” said Joe F. Sanderson Jr., chairman and chief executive officer. “Demand for chicken remains strong from our retail grocery store customers, and it appears the relatively high prices of competing protein have shifted some consumer demand to chicken. In addition, while customer traffic through food service establishments remains challenged by macroeconomic factors, relatively high priced beef contributed to improving demand and market prices during the quarter for products produced at our food service plants.”
Sanderson Farms’ net income for the quarter ended April 30 was $50,998,000, equal to $2.21 per share on the common stock, and more than double the same period during the previous year when the company earned $24,371, equal to $1.06 per share. Sales for the quarter were $660,717,000, compared with $621,195,000 for the previous year.
“Looking ahead, we are reasonably optimistic as we head into the summer months and what is typically the peak demand period for chicken,” Mr. Sanderson said. “Total grain costs have moved higher but remain below last year’s prices, and demand for chicken products is expected to remain strong. Weekly broiler egg sets continue to run slightly above last year’s numbers, but breeder placements remain constrained. It appears the reduced size of the breeder flock will constrain production over the short term despite higher industry returns.
“While macroeconomic conditions continue to affect consumer behavior, market prices for boneless breast meat sold to our food service customers improved through April and May, and market prices for retail grocery store products have also moved higher. Regardless of market conditions, however, we will maintain our focus on maximizing our operating performance and sales execution.”
For the first six months of fiscal 2014, Sanderson Farms earned $79,859,000, equal to $3.46 per share. The results are a significant gain over the previous year when the company earned $17,428,000, or 76c per share.