Improved Market Conditions Boost Sanderson's Results28 August 2013
US - In the company's latest quarterly report, Sanderson Farms' CEO outlines progress in the planning of a new facility in Texas. Sales for the quarter were up as poultry market prices improved during but grain prices continued above the levels of the same period of 2012.
Sanderson Farms, Inc. has reported results for the third fiscal quarter and nine months ended 31 July 2013.
Net sales for the third quarter of fiscal 2013 were $739.0 million compared with $624.9 million for the same period a year ago. For the quarter, the Company reported net income of $67.9 million, or $2.95 per share, compared with net income of $28.7 million, or $1.25 per share, for the third quarter of fiscal 2012.
Net sales for the first nine months of fiscal 2013 were $1,955.9 million compared with $1,737.7 million for the first nine months of fiscal 2012. Net income for the first nine months of fiscal 2013 totaled $85.3 million, or $3.71 per share, compared with net income of $44.6 million, or $1.94 per share, for the first nine months of last year.
"Sanderson Farms' financial results for the third quarter of fiscal 2013 reflect improved market conditions when compared to last year's third quarter," said Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, Inc.
"Market prices for poultry products were higher than the third quarter of fiscal 2012, as the Georgia Dock whole bird price remained historically high during the quarter. The Georgia Dock price reflects steady retail grocery store demand. In addition, market prices for wings, while below last year's third quarter levels, improved during the quarter. Boneless breast meat prices remained well above last year's prices and peaked in May as several quick serve restaurants and other food service establishments featured chicken on their menus."
Overall market prices for poultry products were higher in the third quarter of fiscal 2013 compared with prices in the third quarter of fiscal 2012. As measured by a simple average of the Georgia dock price for whole chickens, prices increased 11.6 per cent compared with the third quarter of fiscal 2012. Boneless breast prices improved when compared to last year's third fiscal quarter, averaging 32.3 per cent higher than the prior-year period. Jumbo wing prices averaged $1.28 per pound for the third quarter of fiscal 2013, down 19.3 per cent from the average of $1.59 per pound for the third quarter of fiscal 2012. The average quoted market price for bulk leg quarters was essentially flat during the quarter, averaging $0.51 per pound during the third fiscal quarter of 2013 compared to $0.50 during the third fiscal quarter of 2012.
Cash prices for corn delivered to the Company increased 8.1 per cent compared with the third quarter a year ago, while the price for soybean meal delivered to the Company increased 10.3 per cent. For the nine months ended 31 July 2013, the Company's cash prices for corn increased 13.2 per cent and soybean meal increased 29.3 per cent when compared to the nine months ended 31 July 2012.
Mr Sanderson added: "While poultry market prices improved during our third fiscal quarter, the Company continued to experience higher grain prices compared with the same period last year.
"Market prices for grain have remained high through most of August, but favorable growing conditions this summer have fueled considerable optimism about this year's corn and soybean crops. While the available grain quantity and prices during the coming months will ultimately depend on this year's final crop performance, prices have recently moved lower. If we priced all of our needs for the remainder of the fiscal year at yesterday's market prices, cash paid for feed grains would be approximately $79 million higher during fiscal 2013 compared to fiscal 2012. However, fourth quarter cash market prices would be $65 million lower than last year's fourth quarter. We have priced our grain needs through August but will be on the market for our needs starting in September.
"We are also pleased to report that our due diligence and related permitting processes are substantially complete for our previously announced Palestine, Texas facility. Most conditions precedent to breaking ground on the new poultry complex have been met, and we hope to finalise a date to begin construction of the new feed mill, hatchery, processing plant and wastewater treatment facilities in September, subject to final approval by our board of directors. We greatly appreciate the support, encouragement and welcome we have received from the public officials and communities in Palestine, Anderson County, Freestone County and Austin, and we are anxious to begin this next phase of growth for our shareholders, employees and other stakeholders."ThePoultrySite News Desk