August 28, 2020

Oversupply, higher feed costs lead to net profit plunge for poultry producer Ingham's

Ingham's produced 3.3% more poultry in financial year 2019-2020, even as demand fell due to COVID-19 restrictions that constrained supply chains and operations in Australia and New Zealand.

The Australia-based company was met by oversupply in both markets in the June quarter, but operations quickly responded to changing demand requirements, according to Chief executive Jim Leighton, NCA NewsWire reported.

Along with the pandemic constraints, higher feed costs due to tight domestic wheat supply and inflated prices of imported ingredients contributed to a more than 68% net profit plunge to A$40.1 million.

Chief Executive Jim Leighton said that although it had been a period of "considerable stress and uncertainty", Ingham's "has performed exceptionally well", adding that investors were pleased with the result, sending the company's shares more than 4% higher.

Nevertheless, Ingham's warned that the outlook was uncertain due to government restrictions, which affect chicken and turkey consumption and which could again disrupt supply, as per report.

The company closed its Thomastown plant in Victoria for 10 days in July after five employees tested positive for the coronavirus.