Sanderson Farms expects to see a continued increase in poultry prices next year as the economy improves, the chief of the US poultry group said today (25 August).
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Speaking on the company’s conference call today (25 August), CEO Joe Sanderson said he thinks the increase in prices for poultry will be similar to what the industry experienced this year.
“As people gradually go back to work and you see gradual improvement in markets, pricing will gradually increase.”
Sanderson today posted an increase in net profit for the first nine months of the year, which the company said reflects “improved market conditions”.
For the nine months ended 31 July, net income totalled US$62.5m compared with $8.8m for the same period of last year.
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By GlobalDataNet sales for the period were $1.32bn, an improvement on $1.26bn in the prior year.
Sanderson said it was a combination of lower costs and improved market conditions.
“We’ve haven’t changed what we’ve been saying about 2010. Volume will be up about 7%, but that is subject to changes in market conditions. That number could change,” Sanderson said.
He added: “We are very close on our target for our fourth quarter. The market is very unsettled, which is weather driven. There is potential for record crops but the market is nervous because the crop is late. An early crop would be an anomaly, there hasn’t been one since the 1970s. Nevertheless, that could occur but we’re just being very patient right now.”
Last month, Sanderson kick-started its plans to build a processing complex in North Carolina. Once the project is up and running, Sanderson expects production to rise by 7%.
The company, which last month put the project on hold, said that an improvement in market conditions had allowed it to revisit its plans. The budget for the site in Kinston has come down and now rests at US$121.4m, compared to an initial estimate of US$126.5m.
“We’re pretty much focused on Kinston right now,” Sanderson said today, dismissing plans for any future expansion. “Kinston is what we’ve chosen to do, but we are always evaluating our opportunities.”
Construction is expected to being next month with production beginning in the first fiscal quarter of 2011.
“We remain bullish about our long-term prospects for the company. We think we’re headed into a normal fall period where our August/September/October quarter right now looks decent and we comfortable with it,” Sanderson added.
