Rising costs and weak demand for chicken has led Industrias Bachoco, Mexico’s largest poultry firm, to post a loss for the third quarter of the year.
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The company blamed an increase in raw material costs and low demand for chicken for its MXN100.3m (US$7.7m) net loss during the three months to the end of September. The loss compared to net income of MXN370m during the third quarter of 2007.
Bachoco CEO Cristobal Mondragon said: “During this quarter, our company faced severe adverse conditions that lead us to negative operating results.
“Traditionally, the third quarter is the weakest of the year; however, demand for chicken was particularly weak during this third quarter, which combined with the ongoing growth of the industry, pushed for an excessive oversupply in our markets. In addition, the ongoing increase in raw materials costs continued affecting our cost of sales.”
Chicken sales fell 3.8% amid an 8.6% fall in prices. Volumes were up 5.2% but weak demand for chicken products hindered sales.
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By GlobalDataBachoco said overall net sales inched up 0.2% to MXN4.7bn, with the rise driven by table eggs sales, which jumped by over a quarter. Swine sales rose by 25% and balanced feed sales were up 2.7%.
