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Sanderson reports strong chicken demand

Sanderson reports strong chicken demand

- Company reports higher selling prices for chicken products. - New products and promotions improve demand in foodservice sector. - Co

SANDERSON Farms Inc. has reported an earnings increase for its fiscal 2013 second quarter and six months compared with both periods in fiscal 2012, attributing its performance to improved markets that were driven primarily by increased demand for chicken products.

Company sales increased 4.4% in the second quarter, reflecting higher selling prices, according to chair and chief executive officer Joe F. Sanderson Jr., noting that the Georgia Dock prices were 9.9% higher for chickens and 14.2% higher for breast meat.

He said demand for chicken products in the retail sector remained strong, and although customer traffic in the foodservice sector remained challenged by the macroeconomic situation, demand improved in casual dining restaurants due to chicken promotions and in quick-service restaurants due to new chicken items.

He said leg quarter prices were flat with year ago, but exports, nevertheless, were strong.

Sanderson added that the company's profitability continued to be adversely affected by high feed costs, with corn prices up 15.9% and soybean meal prices up 37.2% in the second quarter from the year-before quarter due to tight old-crop corn and soybean supplies.

For this reason, he said the company expects grain prices to be high and volatile at least until the markets "can get some visibility of the quality and quantity of this year's corn and soybean crops."

The late planting season caused by the cold, wet spring across much of the Corn Belt is contributing to the volatility, he said.

However, the company does have most of its grain needs covered through July at levels that will allow it to "slightly reduce" feed costs, Sanderson said.

He said the company is optimistic heading into summer, which is normally the best demand period of the year.

Sanderson said the breeder flock is being maintained at lower-than-year-ago levels, which means that chicken eggs set for the commercial flock are about flat with year ago, and this will constrain production "over the short term." This should be supportive to demand and prices for chicken products, he said.

Financial results for Sanderson Farms are shown in the Table.

Based in Laurel, Miss., Sanderson Farms is the fourth-largest chicken integrator in the U.S. The company reported fiscal 2012 sales that totaled $2.386 billion.


Sanderson Farms earnings and sales*


-Second quarter-

-Six months-






Sales (million $)





Earnings (million $)





Earnings per share ($)





*For the quarters ended April 30, 2013, and April 30, 2012.


Volume:85 Issue:24

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