LAUREL, Miss. — Sanderson Farms Inc. has reported its results for the first quarter of fiscal 2019.
Net sales for the first quarter of fiscal 2019 were $743.4 million compared with $771.9 million for the same period a year ago. The company reported a net loss of $17.8 million, or 82 cents per share, for the quarter compared with net income of $51.2 million, or $2.24 per share, for the first quarter of fiscal 2018.
Net income for last year's first fiscal quarter reflected a one-time non-cash tax benefit of $37.5 million from an adjustment to the company's deferred income tax liability, which resulted from a lower tax rate under the December 2017 federal tax legislation.
"Our results for the first quarter reflect continued challenging market conditions with significantly lower market prices for boneless breast meat produced at our big bird deboning plants compared with last year's first quarter," said Joe F. Sanderson Jr., chairman and CEO of Sanderson Farms Inc. "However, average prices for tray pack products sold to retail grocery store customers were higher both sequentially and when compared with the same period a year ago, and prices continue to reflect a good supply and demand balance. Demand and prices for jumbo wings strengthened seasonally during the quarter, but market prices still averaged below last year's first quarter. Despite the challenging market price compared with last year's first quarter, market prices for boneless breast meat rose from record lows during January and are now higher than this time a year ago."
Overall market prices for poultry products were lower during the first quarter compared with the same period last year, the company added. Compared with the first fiscal quarter of 2018, the average prices of the company's retail tray pack products were approximately 1.4 percent higher, boneless breast meat prices were approximately 7.6 percent lower, bulk leg quarter prices decreased by approximately 23.7 percent, and jumbo wing prices were lower by 4.7 percent.
The company's average feed cost per pound of poultry products processed was flat compared with the first quarter of fiscal 2018, and prices paid during the quarter for corn and soybean meal, the company's primary feed ingredients, increased 3.3 percent and decreased 0.2 percent, respectively, compared with the first quarter of fiscal 2018.
"Good corn and soybean crops harvested in the United States last fall contributed to a very healthy soybean balance table heading into the 2019 planting season, as well as an adequate supply of corn," Sanderson added. "Uncertainties regarding trade with China, however, have provided price support for both corn and soybeans despite ample supplies of both grains, especially soy beans. Had we priced all of our grain needs for fiscal 2019 at yesterday's Chicago Board of Trade futures contract prices, cash paid for feed grains during fiscal 2019 on fiscal 2018 volumes would be $26.4 million lower than during fiscal 2018.
"Operations at our new Tyler, Texas, complex began earlier (in February) and the start-up has gone well," Sanderson said. "We expect to move to full production by the first calendar quarter of 2020, and we look forward to the opportunities the plant represents."
More information can be obtained at www.sandersonfarms.com.