For the third quarter of fiscal 2008, poultry
processor Sanderson Farms recorded a loss of $3,435,000, which compared with net
income of $30,680,000 for the same period last year.
"Our results for the third quarter of fiscal 2008 reflect difficult market conditions for our industry," said Joe F. Sanderson Jr., chairman and CEO. "While retail and export demand for chicken remained relatively strong during the quarter, casual dining and food service customers have been affected by a significant decline in restaurant traffic due to weak economic conditions and higher fuel prices. At the same time, the markets for both corn and soybean meal have remained high and volatile, resulting in significantly higher feed costs. The combination of much higher costs and the imbalance between domestic supply and demand in the food service markets resulted in much lower margins."
Sales for the third quarter ended July 31 were $466,915,000, which compared with $394,753,000 for the same period the previous year.
"In spite of challenging market conditions, we are pleased with the progress made toward moving to full production at our newest facility in Waco, Texas," said Sanderson, adding that while everything will be in place to move to full production at the new plant by October, the plant will operate at approx. 90% capacity until market conditions warrant moving to full production.
"For the remainder of fiscal 2008, we believe market prices will continue to reflect soft consumer demand trends and the uncertain economic outlook. However, having been through volatile cycles, we remain confident that the fundamental rules of supply and demand will work to maintain industry profitability over the long term."