US integrators impacted by export decline

The company posted a loss of $8.5 million on revenue of $221 million for the first quarter of the current fiscal year ending January 31st, 2006. The comparable figure for the first quarter of 2004 was a $10 million profit. Sanderson shares fell by 1%.


Pilgrim's Pride retracted guidance for the current quarter, announcing a loss of $15 million through February of the current quarter with respect to US operations. Pilgrim's Pride lost 0.7% in share value.


Gold Kist reported a decline in profit for the quarter ended December 31st, generating a net income of $2.5 million on sales of $545 million. The comparable figures for the previous financial year were $4.5 million and $552 million respectively.


The spokespersons of each of the companies indicated that declining unit revenue was responsible for the depression in profitability. The Chairman of Sanderson Farms noted that unit revenue for whole birds had decreased by 3.2% during the current quarter and that boneless breasts were down by 21%. This resulted from a marked decline in exports associated with a decrease in consumption in importing countries where domestic flocks were affected by avian influenza.


John Tyson, Chairman of Tyson Foods, expressed confidence that consumption would soon be restored to normal levels and that projected export volume from the US, comprising essentially leg quarters, would resume, thereby restoring price-volume equilibrium in the domestic market.


By: Simon Shane