Net sales for the third quarter of fiscal 2011 were $511.2 million compared with $489.1 million for the same period a year ago. For the quarter, the Company reported a net loss of $55.7 million, or $2.51 per share, compared with a net income of $36.1 million, or $1.55 per share, for the third quarter of fiscal 2010.
"Sanderson Farms' financial results for the third quarter of fiscal 2011 reflect difficult market conditions," said Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, Inc. "Market prices for poultry products were significantly lower than last year's third quarter. While retail grocery store demand has remained steady, food service demand remains sluggish, and will likely remain that way until the employment market gains traction and consumers regain their confidence and return to restaurants. We also incurred significantly higher costs for corn and soybean meal, our primary feed ingredients, compared with the same period a year ago."
According to Sanderson, overall market prices for poultry products were lower in the third quarter of fiscal 2011 compared with prices in the third quarter of fiscal 2010.
"While lower egg sets over the past several weeks point to fewer chickens on the market this fall, those chickens will meet lower seasonal demand after Labor Day," added Sanderson. "We will also experience higher costs for grain during the balance of this calendar year compared to the same time last year. The price for grain will ultimately depend on this year's crop performance but, based on current markets, cash paid for feed grains would be $340.8 million more during this fiscal year compared to last year if we were to price all of our remaining needs at current market prices. Given what we expect to be a high cost environment into calendar 2012 and sluggish demand from our food service customers, we will extend our previously scheduled November and December holiday production cuts into calendar 2012 to balance our supply with expected demand from our customers. We will leave that production cut in place until demand from our customers improves.
"Despite current market conditions, we remain confident in the long term success of the Company," added Sanderson. "We continue to operate well and are comfortable with our growth strategy. We are on schedule at our new Kinston, North Carolina, complex and look forward to the new opportunities this plant will provide for Sanderson Farms, our employees, customers and shareholders."
SOURCE: Sanderson Farms, Inc.
