US chicken producer Sanderson Farms has reported a sharp drop in quarterly profits as rising feed costs hit margins.
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Sanderson said earnings fell to US$6.2m in the second quarter, down from $26.9m booked in the comparative period of last year.
The drop in profits came despite an increase in sales, which rose from $360.5m to $433.9m.
“We are pleased to report a profit during our second fiscal quarter, in spite of challenging industry fundamentals,” said Joe Sanderson, Jr., chairman and chief executive officer of Sanderson Farms.
“Like others in our industry, the company’s financial results were affected by feed grain costs, which were significantly higher than they were in the same period a year ago, and higher than the first quarter of this year.”
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By GlobalDataThe company said that it expected this trend to continue throughout the current fiscal year. In response, Sanderson said it was focusing on “developing efficiency”.
