Meat&Poultry - June 2011 - 42

CORPORATE PROFILES

Staying the course
Sanderson Farms is committed to its business strategy – through good times and bad
BY ALICIA KARAPETIAN
meatpoultry@sosland.com

ike most companies in the poultry industry, 2011 is shaping up to be a challenging one for Sanderson Farms. As volatility in the grain markets continues and production levels remain high, prices are of a great concern. But Sanderson officials are optimistic, too, as they remain confident in the company’s business approach, and more importantly, its Butts balance sheet. “We made a lot of money in October of last year and began losing money in November,” says Lampkin Butts, president and COO. “That’s a huge swing.” A swing for the fences, indeed, thanks in no small part to soaring corn prices and the unwillingness of other poultry companies to cut production. Like many of his competitors, Butts acknowledges, “We’re surprised egg set numbers have stayed the same and increased a bit. There is no indication in pullet placements or egg sets that industry has curtailed production.” Yet, he adds, “Virtually everybody is losing money, and a lot of companies are losing a lot of money.” Ironically, Sanderson Farms is upping its own volumes, as a new plant in Kinston, NC, came on line in January operating at 25 percent of capacity, or 325,000 chickens per week, and on May 16 increased its output to 650,000 chickens per week. Butts says the plan is to have the facility at full capacity, 1.25 million chickens per week, by the end of the year. The company

has demand from new retail customers to justify the increases, though Butts declined to name the buyers.

Expansion plans
The company has also announced plans to open another new plant in North Carolina, as Sanderson offi cials have long said the North Carolina expansion plans always included

The company has also announced plans to open another new plant in North Carolina. Construction was supposed to have begun on that facility early this year, though the build was delayed due to market forces.

two plants. Construction was supposed to have begun on that facility early this year, though the build was delayed due to market forces. “We want to see how the grain prices respond later this year,” Butts says. “We make investments like that for the long term. It’s a little delay. It’s not what we want, but it’s the prudent thing to do.”

Butts also states, as other Sanderson executives have, that the company remains committed to the project. While the company has not officially announced a site for the facility, which would serve the big bird deboning market and process approximately the same volume as the Kinston plant, residents near the site considered to be the top contender have launched a months-long battle aiming to derail the project. A group of residents joined together to form the Nash County Landowners Association, which has spent considerable money – with the aid of Nash County government – in a public relations and marketing campaign against the proposed facility. On its website, SayNoToSanderson.com, the group cites concerns about the plant’s environmental impact – particularly on the water supply – infl uence on neighboring property values and the plant’s economic impact, which the group contends will be negative due to the wage ranges of plant employees. Sanderson officials have done much to allay residents’ concerns, including meeting with the group and inviting lawmakers and others to visit Sanderson Farms’ Moultrie, Ga., facility to view its wastewater treatment approach, and making available information on the proposed wages and insurance benefits for workers. Regardless, some in North Carolina remain committed to fi ghting the plant as much as the company is committed to building it.

42 • Meat&Poultry • June 2011 • www.MeatPoultry.com

http://www.SayNoToSanderson.com http://www.MeatPoultry.com

Meat&Poultry - June 2011

Table of Contents for the Digital Edition of Meat&Poultry - June 2011