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Sanderson Farms announces production agreement with House of Raeford Farms

Agreement comes as House of Raeford Farms rebuilds after Teachey facility fire.

Sanderson Farms Inc. announced April 17 that it has signed an agreement to continue processing chickens grown by House of Raeford Farms at the Sanderson Farms poultry processing facility located in St. Pauls, N.C.

House of Raeford Farms, a private company headquartered in Rose Hill, N.C., operates poultry growout operations and processing facilities in four southeastern states. The House of Raeford Farms Teachey, N.C., facility was severely damaged by a fire in late February.

Sanderson Farms had been assisting House of Raeford Farms on an interim basis prior to reaching this longer-term processing agreement.

Under the terms of the agreement, Sanderson Farms will purchase, process and sell chickens grown by House of Raeford Farms through mid-December 2017. In addition, Sanderson Farms may elect, under the terms, to process chickens on a fee basis rather than purchasing them.

Sanderson Farms estimates that the additional volume of processed product this arrangement will generate for its St. Pauls processing plant will be 20.4 million lb. in its fiscal 2017 third quarter, 26.3 million lb. in its 2017 fourth quarter and 12.4 million lb. during its fiscal 2018 first quarter.

"We are pleased to have reached this agreement with our North Carolina neighbors, House of Raeford Farms, while they rebuild their Teachey processing facility following the devastating fire,” said Joe Sanderson Jr., chairman and chief executive officer of Sanderson Farms. “We believe this processing agreement will be beneficial to Sanderson Farms. Our St. Pauls facility just commenced production in January, and our new managers and employees will gain valuable training and processing experience with this accelerated production schedule. We hope to benefit from favorable chicken markets as we head into the busy summer months."

TAGS: Business
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