US meat producer Smithfield Foods today (9 December) posted “record” second-quarter results today (9 December) driven by higher prices in the pork business.
The company said net income for the quarter ended 31 October reached US$143.7m against a $26.2m loss in the same quarter of the previous year.
In the pork segment, operating profit increased 8.8% to $278.1m, with the company’s president and CEO Larry Pope saying the record earnings were driven by “disciplined management in packaged meats and fresh pork accompanied by improved fundamentals in hog production”.
Consolidated sales for the quarter were up 11.4% to $3bn against the same period of last year, which was due to higher average unit selling prices in the pork segment and higher live hog market prices.
“Supply and demand remained well in balance in the quarter. Reduced protein supplies, coupled with strong protein demand, supported record high pork prices in all trade channels. Export demand for pork continued to be enhanced by a weak US dollar, as the US remained one of the lowest cost global protein producers,” added Pope.
The meat producer said the “outlook for corn supplies and prices is getting brighter” and that it is “encouraged that support for ethanol produced from corn appears to have diminished in recent months. The ethanol blenders tax credit, which is set to expire this year, has come under increased scrutiny in the media and in Congress, and may be reduced or even eliminated.”
He added that Smithfield is performing at “record levels”, and is “focused on continuing to deliver strong earnings in the second half of fiscal 2011. All indications are that fiscal 2011 will be a record year for the company”.
Click here for Smithfield Foods’ full earnings statement.