Food Business News - June 7, 2011 - (Page 50)

Sanderson Farms suffers second-quarter loss High feed costs and a lackluster food service market impact earnings LAUREL, MISS. — Poultry processor Sanderson Farms, Inc. recorded a loss of $16,276,000 during the second quarter of fiscal 2011, ended April 30. The loss compared with net income of $35,087,000, equal to $1.62 per share on the common stock, in the second quarter of fiscal 2010. Sales during the quarter were $479,342,000, down 2% from $487,101,000 in the same period a year ago. “The results for our second quarter of fiscal 2011 reflect current market conditions and the overall economic environment,” said Joe F. Sanderson Jr., chairman and chief executive officer. “Despite slightly higher volume as a result of our new North Carolina facility, our net sales were down 1.6% compared with the second quarter of fiscal 2010, reflecting overall lower average sales prices of chicken. “Retail grocery store demand for chicken has remained strong. Export demand improved during the second quarter compared with the same period last year when U.S. poultry meat was banned from Russia. Demand from our food service customers has remained weak, and we expect this trend will continue with rising gas prices and high unemployment keeping consumers from dining away from home. “Our profitability for the second quarter was also adversely affected by the significant increase in our feed costs. Feed costs in flocks sold increased 41.3% compared to last year’s second fiscal quarter, and we expect grain prices to remain high and volatile for at least the rest of this year, as there is no margin for error with the 2011 grain crop.” In a conference call with financial analysts on May 24, Mike Cockrell, chief Feed costs accounted for 54.5% of the cost of poultry products sold by Sanderson Farms during the second quarter of fiscal 2011. financial officer, said feed costs accounted for 54.5% of the cost of poultry products sold by the company during the quarter. During the same period during the previous fiscal year, feed costs accounted for 47.6%. The weak food service category has remained a vexing issue for the company, Mr. Sanderson said. “This weak food service demand has been with us for three years now and we just don’t see any change in it …” he said. “We just haven’t seen one bit of improvement there.” When asked by a securities analyst if Sanderson Farms had any new products in the pipeline that may help the food service industry, Mr. Sanderson said it was “unimportant.” “We need people to go back to work and that’s — I think that’s the key — and we need gasoline (prices) to come down,” he said. “Our restaurant partners have worked their behinds off and with all kinds of features and $10 deals and $20 deals. People just don’t have the money to go out to eat. You know, when they do, they are drinking coffee and drinking smoothies or something. They’re not eating chicken.” For the first six months of fiscal 2011, Sanderson Farms recorded a loss of $49,832,000. During the first six months of fiscal 2010, the company earned $50,904,000, or $2.39 per share. Sales for the period were $907,074,000, a slight decline compared with the first six months of fiscal 2010 when sales were $907,224,000. FBN 50 FOODBUSINESS NEWS ® June 7, 2011

Table of Contents for the Digital Edition of Food Business News - June 7, 2011

Food Business News - June 7, 2011
House bill cuts food safety funding
Enhancing water’s value
Wet weather muddies corn outlook
Web Contents
Editorial - Quest for ‘whole truth’ on food prices in France
MyPlate steps up in simple fashion
Breaking down MyPlate by food groups
Lawmakers look to halt sale of Lazy Cakes
McCormick to enter joint venture in India
Cal Pacifi c acquires SunOpta frozen fruit assets
Cargill Kitchen Solutions expanding in Iowa
F.M.I. hires new v.p. of food safety programs
Sealed Air to acquire Diversey for $4.3 billion
AdvancePierre Foods buys Barber Foods
Cargill acquires German chocolate business
Calavo to buy Renaissance Food Group
U.S. Foodservice acquires Great Western Meats
Clear sailing for Hain
Seneca Foods earnings down sharply in 2011
April red meat production down 4% from year ago
Sbarro now exploring alternatives to bankruptcy plan
Sherman Miller promoted to c.o.o. at Cal-Maine Foods
Nestle Health Science to acquire pharmaceutical maker
Emerging markets propel Heinz’s fi scal 2011 earnings
U.S.D.A. lowers cooking temp for some meat cuts
Campbell Soup focusing on volume sales, brand building
Buyout fi rm to acquire California Pizza Kitchen
Sanderson Farms suffers second-quarter loss
Wet weather muddies corn outlook
House bill cuts food safety funding
House panel seeks reduction in W.I.C. funding in fiscal 2012
Seeking middle market opportunities
Clear and concise
Ingredient solutions help keep it simple
Identifying natural partners for stevia
$tevia $upplier$ $eek profi t$ through international growth
Brain health for baby boomers
Bottled water volume, market share grew in 2010
Study recommends children should avoid energy, sports drinks
V8 introduces energy beverages
Smucker, Starbucks raising coffee prices
Nestle launches Aguas Frescas bottled beverage
Jamba introduces coconut water-based beverages
Enhancing water’s value
Gluten-free grains momentum
Balance Bar adds Café line
Pasta Prima launches two ravioli lines
Land O’Frost debuts Wrap Kit
Franz introduces artisan bread
Kraft launches Newtons Fruit Thins
Farley’s & Sathers adds ‘Splashers’
Häagen-Dazs introduces 2011 flavors
Mars updates Kudos granola bar line
Lifting of Russian export ban pressures world wheat market
Ingredient Markets
Packaging formats focus on convenience
Technology enables ultrasonic sealing
Ingredient’s small size aids in salt reduction
AKFP now offers arrowroot starch, pea starch
Tate & Lyle to resume U.S. sucralose production
Non-dairy ingredients achieve pareve certifi cation
Ad Index
Food Business in the News

Food Business News - June 7, 2011