By Jack Weatherly
Sanderson Farms Inc. reports that for its second fiscal quarter, ending April 30, net income was $40.6 million, or $1.83 per share, compared with net income of $41.9 million, or $1.84 per share, for the second quarter of fiscal 2018.
Net sales for the second quarter were $845.2 million compared with $813.5 million for the year-earlier period. Laurel-based Sanderson Farms is the third-largest poultry producer in the nation.
“Financial results for our second quarter of fiscal 2019 reflect higher feed costs per pound, continued favorable demand for poultry products from retail grocery store customers and a favorable export environment,” Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, said in a news release. “While market prices for boneless breast meat produced at our plants that target food service customers remained below historical averages for the period and averaged 2.4 percent below last year’s second fiscal quarter, they improved significantly compared to market prices during our first fiscal quarter of 2019.
According to Sanderson, overall market prices for chicken products sold to consumers remained relatively strong during the second quarter and continued to reflect good demand even though boneless breast prices were approximately 2.4 percent lower, the average market price for bulk leg quarters decreased approximately 7 percent. Jumbo wing market prices were higher by 32.7 percent. Market prices for chicken breast tenders averaged 4.4 percent higher than a year ago. The company’s average feed costs per pound of poultry products processed increased by 3 percent compared with the second quarter of fiscal 2018, while prices paid for corn and soybean meal, the company’s primary feed ingredients, increased 4.9 percent and decreased 11.6 percent, respectively, compared with the second quarter of fiscal 2018.
“Looking ahead to the second half of the fiscal year, we continue to expect prices paid for grain to be lower for the year compared to fiscal 2018,” added Sanderson. “While there are ample supplies of both corn and soybeans worldwide, a slow start to the United States planting season for 2019 corn and soybean crops due to the cold, wet spring in the United States grain belt has put upward pressure on market prices.
Sanderson Farms announced on May 23 that, effective June 2 hourly wages for all hourly employees at the Company will be raised by at least $1 per hour, so that all employees who have worked for the company for at least 90 days will earn at least $15 per hour. Hourly rates for truck drivers, hourly maintenance employees and upgraded positions will increase by more than $1 per hour. This decision reflects, in part, the company’s efforts to continue to recruit and retain the best employee base possible.
“We believe these hourly rate increases, when combined with other benefits, will allow the company to remain very competitive in an economic climate where employees have more choices available to them. We also estimate that the costs of this increase can be offset with increased efficiencies, by reaching our target plant yields and by achieving our target live weights,” Sanderson concluded.
Sanderson Farms shares closed Monday on the NasdaqGS stock market at $137.08, up 37 cents for the day. The stock’s 52-week range is $93.98 to $154.82.
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