U.S. chicken industry still hurting - Sanderson Farms
CHICAGO, Sept 4
CHICAGO, Sept 4 (Reuters) - U.S. chicken companies, on average, lost money in July due to high feed costs and low meat prices and the industry is coping by cutting production, Joe Sanderson, chief executive of Sanderson Farms Inc (SAFM.O), said on Thursday
"The bottom line numbers were pretty much worse in July than they were in June," Sanderson said during a webcast presentation, referring to recently released industry data. "In July, the number of companies making profits were much less."
Chicken companies have already reported quarterly losses. In August, Sanderson Farms, the No. 4 U.S. chicken producer, reported a loss of $3.65 million, or 18 cents per share, for the fiscal third quarter that ended July 27.
Chicken companies have been raising meat prices, but the increases have not been enough to offset the sharp rise in feed prices this year.
The chicken industry has responded by cutting production, Sanderson said during the presentation at the Lehman Brothers Consumer Conference.
The U.S. Department of Agriculture on Wednesday reported egg sets, an indication of future production, were down 5 percent last week compared with a year earlier. In previous weeks, egg sets were down 4 percent to 5 percent from a year earlier.
Exports have been a bright spot for the chicken industry, and Sanderson said the company's exports remain strong, and it continues to ship to Russia. Russia has said it may reduce imports of pork and chicken and recently delisted some chicken plants, including two Sanderson plants.
"We still have two plants going to Russia," Joe Sanderson said on Thursday.
Sanderson' shares slipped 6 cents to $36.52 in early Nasdaq trading. (Reporting by Bob Burgdorfer, editing by Maureen Bavdek)