US poultry processor Sanderson Farms reported a loss for its 4th quarter and fiscal year ending 31 October, reportedly due to challenging market conditions and a decline in demand for chicken products.
Sanderson reported a net loss of $51.9 mln for the 4th quarter of 2008. This compares with a net income of $24.1 mln for the same period in 2007. The poultry processor also reported a net loss for fiscal year 2008 of $43.1 mln, compared to a net income of $78.8 mln for 2007.
Net sales for the 4th quarter rose to $460.2 mln from $426.9 mln in the 4th quarter of 2007. Net sales for fiscal 2008 were up 17% at $1.724 bln.
“Sales increased over the same quarter last year reflecting the company’s production growth, and our annual sales were a record high for Sanderson Farms,” said chairman and CEO of the company Joe F. Sanderson, Jr. “However, like others in our industry, our business was affected by a decline in demand for chicken products from foodservice and casual dining customers.”
The chicken processor stated that it paid $235 mln more for feed grain in 2008, but expects to pay $142.5 mln less for feed in 2009. This is based on recent drops in feed prices.
The poultry company said it will save 5.5 – 6 cents per chicken in costs, but added that even with those savings chicken prices need to rise.
Sanderson said it exported more poultry this year, including an 8% increase in exports to Russia, a 15.2% increase to China and a 20% increase to Mexico.