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Sanderson Farms is country's third largest poultry producer

High feed prices and a decline in demand led to 2011 being one of the most challenging years Joe F. Sanderson Jr., 65, has seen in the 42 years he has worked at Sanderson Farms. So you might think that Sanderson would have thoughts of retirement on his mind. Instead, Sanderson is buoyed by news that Sanderson Farms recently climbed to become the country’s third largest poultry company. He plans to be around as chairman and CEO of Sanderson Farms for the foreseeable future.

Sanderson

“I intend to stay active with the company,” Sanderson said. “We have announced the development of another plant in North Carolina, and we have plans beyond that. I want to see those plans through. We’re enjoying the growth and I have no intentions of retiring. We’ve had a good time growing this company. As long as we are still growing and enjoying, and I’m in good health, if my board will have me I intend to stay with it.”

When Sanderson found out in February that Sanderson Farms had climbed from fourth to third largest poultry company in the country, it wasn’t as big a deal as you might expect.

“That is not terribly important to us,” Sanderson said. “The most important thing to us is to increase our shareholder values.”

The publicly traded Sanderson Farms is one of Mississippi’s greatest business success stories. The company that started in Laurel in 1947 as Sanderson Brothers, a Purina seed and feed store, now employs 10,000 people in addition to 770 independent growers, and has annual sales of close to $2 billion. Its 10 plants in Mississippi, Louisiana, Texas, Georgia and North Carolina process more than 9.7 million chickens per week.

In 2009 and 2010, chicken businesses were profitable and expanded production. But high feed prices and a chicken glut hammered profits in 2011, leading to five poultry company bankruptcies. Many processors were running at reduced capacity.

Sanderson Farms opened a new complex in Kinston, N.C., in January of 2011.

“The new plant in North Carolina reaches full capacity in April,” Sanderson said. “It took all year to get it up to capacity, and it will run at capacity most of calendar 2012. Because of this plant, our production grew by about 7 percent in 2011, and will increase again in 2012.”

Had the company known what was ahead, it might have reconsidered building the new complex in North Carolina. But now the worst of the challenging market is behind it, and Sanderson is delighted to have access to new markets.

“We are thrilled about the plant and the new access to customers in the Northeast corridor,” Sanderson said. “We have experienced challenging times, but the company has never been challenged financially. We have always had a very conservative outlook and a good balance sheet. We’ve adapted to changing markets. We made a huge change in the late 1990s with our marketing, and that has worked out very well for us. We went from being a slow growth company to a very rapidly growing company in the early 1990s, and have continued that growth since then.”

Once way the company has grown is by working to meet consumer preferences. The company produces a fresh, natural chicken with no additives, preservatives or fillers. No growth hormones are fed to the chickens.

“We found out that consumers did not want the fillers,” Sanderson said. “We decided we wanted to go an all-natural route, and we believe we made the right decision. We’ve done well with it.”

A graduate of Millsaps College, Sanderson and his wife, Kathy, have three daughters and six grandchildren. One of Sanderson’s favorite things to do is spend time with his family on their farm in Laurel.

It is no coincidence that Sanderson Farms has good representation by women on its board of directors.

“I’m married to a very talented woman, and I have three very bright daughters,” Sanderson said. “A lot of people who work for us in our plants are women. Most of the people who buy our chickens are females. Our target audience is women age 25 to 60. So I thought it was important with those constituencies that we have women on the board. We also have a racially diverse board. I’m proud of that, as well.”

Women on the board include the well-known pottery artist Gail Pittman, Toni D. Cooley, who is president of a company that is a tier one supplier to auto plants in Mississippi, Tugaloo College president Beverly Hogan, and Dianne Mooney, retired senior vice president of Southern Living at Home.

Sanderson expects 2012 to be a profitable year for his company, and is bullish on the future of chicken. He believes the future will bring biotech advances both in the genetics of the chickens and of corn and soybeans used to produce feed.

“I think one of the most exciting things that will affect us over time will be the developments in seed corn and soybeans,” he said “They are developing strains that are going to be more disease resistant, more drought resistant, and will provide higher yields for farmers, which will make more corn and soybeans available to us and the world. The world is demanding more corn and soybeans as the middle class develops globally, and has a tremendous appetite for protein. As that appetite for protein grows, there is going to be greater need for corn and soybean meal to feed to livestock and poultry. That is one of the critical elements going forward both for exporters like myself and feeders around the world.”

Sanderson Farms exports about 20 percent of its production, shipping all over the world to areas like China, Russia, Africa, the Middle East and the Far East.

Sanderson Farms is planning to build another plant at a location in North Carolina that hasn’t yet been disclosed. Sanderson expects to see more growth when unemployment declines and the economy improves.

“Market conditions steadily improved during our first fiscal quarter compared with last year’s first quarter and compared with our fourth quarter of fiscal 2011,” Sanderson said. “The company was profitable in January. However, we continue to experience high grain prices, especially for corn.”

Sanderson’s influence has gone far beyond the small town he was born in, Laurel, population 19,000. He has headed organizations like the National Chicken Council, the Mississippi Manufacturers Association and the Mississippi Poultry Association. He has been active with local organizations like the Boys Scouts, the United Way, Salvation Army and the Chamber of Commerce.

When he isn’t working, in addition to spending time with his family, he also likes golf and duck, pheasant and deer hunting.

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