February 19, 2010

Sanderson Farms sets sights on continued growth in fiscal 2010
 

Short-term challenges such as volatile export markets and soft foodservice demand did not deter Sanderson Farms confidence to grow in fiscal 2010.

Sanderson Farms chairman and CEO Joe Sanderson said that the positive growth is largely due to the resumed construction of a new poultry complex in Kinston, North Carolina, that will process 1.25 million birds a week. The company has budgeted US$121.5 million for the project, and operations are scheduled to begin during the first quarter of fiscal 2011.

The Laurel, Mississippi-based poultry producer is fresh off a year in which it overcame an economic downturn to post three profitable quarters including a record quarterly profit in the third quarter and record annual sales of US$1.79 billion.

Increased production at the company's Waco, Texas, facility, along with improved prices and significantly reduced corn prices all helped the bottom line. Meanwhile, Sanderson strengthened its financial position and reduced debt.

Sanderson noted that USDA now predicts record or near-record soy and corn crops in 2010, which bodes well for the company in terms of keeping feed costs down. Retail sales have remained steady, but the company expects foodservice demand to continue to be soft most likely until early 2011.

Overseas, Sanderson officials are watching developments in Russia and China. Lampkin Butts, the company's president and chief operating officer, said US and industry officials are waiting for confirmation on a meeting with Moscow the first week of March to discuss Russia's January 1 ban on imports of US poultry treated with chlorine.

"While we are optimistic that an agreement will be reached that will allow shipment of US chicken into Russia over the long term, bulk leg quarter prices will remain soft until that is done as Russia is the industry's largest export market for that product," Butts said.