June 2, 2006

 

Pork sales down while exports are up for PSF

 

 

Pork processor Premium Standard Farms reports lower fourth quarter and fiscal 2006 pork sales, even though export volumes climbed. 

 

The company reported net sales for the fiscal 2006 fourth quarter at US$218.1 million, compared to US$249.8 million during the fourth quarter of fiscal 2005.

 

The company blamed the poor sales on a 17.4 percent decline in live slaughter-pig prices and an 11.2 percent decline in meat prices. However, the company did have hedging gains of US$11.3 million.

 

PSF's net income for the fiscal 2006 fourth quarter of US$11.8 million, was almost half of the US$23.4 million for the fiscal fourth quarter of 2005.

 

PSF CEO John Meyer said during the fourth quarter, there was a sharp decline in pork price levels, due to higher production in the US.

 

Net sales for fiscal 2006 fell US$8.1 million to US$919.5 million compared with US$927.6 million last year.

 

The decline would have been worse had it not been for an increase in volume and a significant gain of US$4 million in pig futures contracts.

 

As a result of the increased supply of all meat proteins in the United States, live slaughter-pig and wholesale-pork prices have continued to decline toward more historical levels during the final months of fiscal 2006 and into fiscal 2007, PSF said.

 

Internationally, demand for PSF's products and increased utilisation of the company's plants both contributed to strong export volumes to countries such as Japan, Canada, and Mexico.

 

The company also plans to expand its development efforts in Latin America and China this year.