LAUREL, Miss. – Sanderson Farms Inc. announced its fiscal fourth-quarter financial results that showed demand for chicken continued to increase throughout 2019.
For the quarter that ended Oct. 31, 2019, the company reported a net loss of $22.9 million, or $1.05 per share, compared to a $43.2 million net loss in 2018.
Net sales for the quarter were $906.5 million compared with $798.1 million for the same period a year ago. Net sales for the fiscal year were $3.440 billion compared with $3.236 billion for fiscal 2018.
For the fiscal year, Sanderson reported a record volume of poultry products sold at 4.53 billion lbs., compared to 4.44 billion lbs. in fiscal 2018.
Results for the quarter and the fiscal year reflect a charge of $9.6 million, or approximately $0.32 per share net of income taxes.
“The fourth quarter marked the end of the second fiscal year in a row during which market prices for boneless breast meat produced at our plants that process a larger bird for foodservice customers fell to historically low levels after Labor Day,” said Joe F. Sanderson, Jr., chairman and CEO of Sanderson Farms. “Similar to fiscal 2018, market conditions weakened significantly during our fourth fiscal quarter of 2019. Despite weakness during our fourth fiscal quarter, overall market prices for poultry moved counter-cyclically higher during November and December, and several factors are expected to support higher market prices for poultry meat as we move into the new calendar year.
“The protein deficit caused by African Swine Fever in China and other countries, recently well-publicized chicken sandwich features at quick-serve restaurants and expected higher retail pork and beef prices should all support stronger poultry markets as we move into 2020.”
Net income stands at $53.3 million, or $2.41 per share, compared to a net income of $61.4 million, or $2.70 per share last fiscal year.
Sanderson said overall realized prices for poultry products increased 3.5 percent in 2019 compared to a year ago. Prices for boneless breast meat averaged 1 percent lower in the fourth quarter compared to 2018. For the full fiscal year, boneless breast meat market prices were 3.4 percent lower compared with fiscal 2018.
Jumbo wing market prices averaged $1.73 per lb. during the fourth quarter, which is up 19 percent from the average. For the fiscal year, jumbo wing market prices averaged $1.72 per lb. during the fiscal year, up 19.9 percent from the average of $1.44 per lb. for fiscal 2018.
Sanderson said the average market prices of bulk leg quarters increased 20.6 percent for the fourth fiscal quarter of 2019 and increased 1.3 percent for fiscal 2019 compared to last year.
Cash prices for corn during the fourth quarter increased 12.8 percent, while soybean meal cash prices were lower by 8.4 percent.
“Grain prices were slightly higher during fiscal 2019 compared with prices paid in fiscal 2018; however, feed costs in processed flocks were essentially flat per pound, as higher prices paid for feed grain were offset by improved live bird performance,” Sanderson said.
Even with the ups and downs of the fiscal year, the poultry processor Sanderson is optimistic about opportunities in 2020.
“We are cautiously optimistic as we enter fiscal and calendar 2020. Poultry market prices have moved counter-cyclically higher in November and December, and most expect protein markets to be supported in 2020 by a worldwide protein deficit caused by African swine fever’s impact on Asian pork supplies,” Sanderson concluded. “In addition, increased promotional activity for chicken sandwiches at quick-serve restaurants and higher expected prices for beef and pork should also support a stronger poultry market as we move into 2020.”