US Seaboard Corp suffer losses on pork segment
Seaboard Corporation announced on Tuesday, November 4 2008 that its net income for the third quarter ended Saturday, September 27 2008 declined 37 percent to US$32.9 million from US$52.6 million in the third-quarter last year.
The company imputes the poor results to higher feed costs related to corn and soy meal, the impact of using the LIFO (last in, first out) method of determining certain inventory and start-up costs related to its biodiesal processing plant in Guymanm Okla.
The firm reported third quarter sales for its pork segment of US$303.6 million, up from US$248.7 million in last year's third quarter, predominantly from higher sale prices for pork products and to a minimal extent, higher volumes of pork products sold. Pork segment sales in the first nine months totaled US$830.9 million, up from US$752.1 million in the prior year period, reflecting increased exports sales and daily capacity at its processing plan in Guymon, Okla.
The firm wrote in its 10Q filing with the Securities and Exchange Commission, without a noted improvement in current market conditions including feed costs, management expects to incur additional losses during the remainder of 2008.
It also noted the potential for escalated volatility in operating income during the rest of the year as a result of increased derivative positions entered in July, 2008.
Seaboard said the pork segment spent US$27.5 million on constructing additional hog finishing space, the biodiesel plant and the ham-boning and processing plant in Reynosa, Mexico during the first nine months of the year.
For the remainder of the year, Seaboard said it plans to spend US$3.3 million and finish the plant in Mexico, with US$5.2 million to improve existing hog facilities, upgrade the Guymon pork processing plant, make additional facility upgrades and pay for related equipment.
Seaboard said it plans to open the ham boning plant in Mexico in early 2009.