Meat + Poultry - February 2006 - (Page 4)

Continued from Page 3 came just days after similar news from Cagle's, Inc. For the third quarter ended Dec. 31, Cagle's posted a loss of $534,000, compared with net income of $115,000 in the same period last year. Net sales for the quarter rose 9 percent to $54,495,000, reflecting an increase in pounds marketed of 15.18 percent offset by sales prices that were 5.95 percent lower per pound. J. Douglas Cagle, chairman and C.E.O., said A.I. "severely impacted our industry, both domestically and internationally. (It) has affected demand in our industry's overseas markets resulting in lower pricing and dramatically increased cold storage inventory domestically." Meanwhile, Tyson Foods' most recent results reflected similar market challenges. For its first quarter of fiscal 2006, ended Dec. 31, the company's net income declined $9 million compared with the same period in fiscal 2005, declining from $48 million last year to $39 million this year. Sales for the first quarter of 2006 were $6,454,000,000 compared with $6,452,000,000 for the same period in 2005. The company also announced it was slashing its earnings guidance for fiscal 2006 from a range of 95c to $1.25 per diluted share, announced this past November, to 50c to 80c per diluted share. "We entered fiscal 2006 knowing market conditions would be difficult, es- pecially early in the year," said John Tyson, chairman and C.E.O. "During the first quarter our chicken segment generated solid results and prepared foods improved, while pork struggled and beef further deteriorated, producing significant operating losses. "Recent declines in international demand for chicken coupled with greater-than-expected domestic supply will dramatically impact the projected performance of our chicken segment." In Tyson's chicken division, first quarter fiscal 2006 operating income increased $19 million compared with the same period last year in fiscal 2005, going from $104 million to $123 million. Operating income was positively impacted by decreased grain costs of approximately $14 million compared with the same period last year. The company's beef division suffered a $38 million decline in operating income due to trade disruptions, higher operating costs and a labor dispute at its facility in Lakeside, Alberta. Operating income in Tyson's pork division was negatively impacted by decreased average sales prices and higher operating costs per head, partially offset by lower live costs and increased sales volumes. The company's prepared foods segment saw operating income increase $9 million compared with the same period last year. Hog prices hinder P.S.F.'s third quarter earnings KANSAS CITY, Mo. - Net income at Premium Standard Farms, Inc. in the third quarter ended Dec. 24, 2005, was $13,754,000, equal to 44c per share on the common stock, compared with net income of $22,996,000, or 74c per share, in the third quarter of 2005. Net sales for the quarter totaled $242,899,000, down 2 percent from $246,759,000 during the same period a year ago. Company executives attributed the decrease in net sales during the quarter to a 17 percent decline in hog prices, which was offset by increased volume and favorable hog hedging. Net sales for the first nine months of fiscal 2006 were $701,437,000, which compared with $677,725,000 last year. "We are pleased with our third quarter results, which were in line with internal expectations," said John Meyer, C.E.O. "During the quarter, our net income increased 12.5 percent over our second quarter as a result of our continued efforts to improve processing margins and increase productivity in the production segment." Trim-Rite to build $17 million pork plant in Illinois Mexico to resume importing bone-in beef CARPENTERSVILLE, Ill. - County and state officials have announced plans for the construction of Trim-Rite Food Corp.'s $17-million pork processing plant in Stephenson County, Ill., just outside of Freeport. Negotiations between company officials and local government leaders about the environmental and financial impact of the plant have been ongoing for approximately a year. The announcement was made earlier this month. The new hog plant, which will span more than 100,000 square feet, is expected to employ 400 workers by the end of the development's first phase and up to as many as 800 people if a second WASHINGTON - Trade officials in Mexico this past month announced the country would reopen its borders to U.S. and Canadian bone-in beef from animals less than 30 months of age. A ban on bone-in beef had been in place since the 2003 discovery of bovine spongiform encephalopathy in a single U.S. cow. Trade with Mexico will begin after officials from the three countries agree on trade procedures. "Mexico's decision to further open its market to U.S. beef is a testament to the safety of U.S. beef and a clear expression of confidence in the U.S. safeguards to prevent B.S.E.," said U.S. Secretary of Agriculture Mike Johanns. 4 I MEAT&POULTRY I February 2006 I shift is added. Trim-Rite officials say the plant features include: a state-of-the-art air filtration system, a CO2 stunning system for slaughtering hogs, automated processing equipment, and a snap-chiller to cool the meat in less than an hour. The company reportedly received more than $1.7 million worth of tax incentives and grants to build the new plant in Stephenson County. Freeport Farms, the name of TrimRite's proposed plant, will be built on approximately 25 acres of industrially zoned land within the Mill Race Crossing economic development area outside Freeport. The plant is scheduled to open in the first quarter of 2007.

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Meat + Poultry - February 2006