By JACK WEATHERLY
The outbreak of avian flu and other factors cut deeply into Sanderson Farms’ profits in the third fiscal quarter, the Laurel-based poultry producer and processor said in a release on Tuesday.
Net sales were $740 million for the fiscal third quarter, down from $768 million a year earlier. Net income fell to $50.9 million, or $2.27 a share, from $76 million, or $3.30 per share, in the year-earlier period.
“Market prices for most products produced at our big bird deboning plants were significantly lower during the quarter when compare to last year’s third fiscal quarter,” Chairman and Chief Executive Officer Joe F. Sanderson Jr. said.
“Bulk leg quarter prices remain under pressure as a result of weak export demand affected by export bans related to the discovery of avian influenza in the United States, a relatively strong United States dollar and lower oil revenue in countries with oil-based economies,” Sanderson said.
Sanderson shares on the Nasdaq GS stock market were down only 6 cents, closing at $47.89 despite analysts’ predictions of $2.81 a share and $759 million in sales.
The company has 11 processing plants, including five in Mississippi and nine hatcheries, four of which are in Mississippi.
The outbreak of avian flu was concentrated in the Midwest, primarily Iowa.
“We are pleased with the progress at our new Palestine, Texas facilities,” Sanderson said. “We expect to reach full production by the second fiscal quarter of 2016. The company has started construction of facilities in St. Pauls, N.C.
According to Poultry News, there have been no recorded detection of the avian flu in the past seven weeks.
Lost exports reached nearly $390 million during the first half of the year, according to the USA Poultry and Egg Export Council.
Poultry and egg exports fell 14 percent in the first half of the year in comparison with the corresponding period last year, according to the Foreign Agriculture Service.