Sanderson Farms 2Q Profit Soars On Low Feed Costs

LAUREL, Miss. (AP) — Chicken producer Sanderson Farms Inc. said Thursday its fiscal second quarter profit soared due to far lower feed costs and strong demand for chicken at grocery stores.

For the quarter ended April 30, net income jumped to $26.2 million, or $1.27 per share, from $6.2 million, or 30 cents per share a year ago.

Analysts polled by Thomson Reuters expected profit of 55 cents per share.

Sales fell 2 percent to $426.8 million from $433.9 million. Analysts predicted sales of $408.7 million.

Lower feed prices helped boost profit, the company said. The company's costs for corn and soybean meal — the two main ingredients in chicken feed — fell 23 percent and 14 percent respectively.

The company also said its results reflect better market conditions for the poultry industry. Chicken producers have been cutting production to restrict the supply of chicken in the market.

A reduced supply generally leads to higher prices as long as demand stays high. The company said prices were higher than in the fiscal first quarter but were mixed in comparison with the second quarter of last year. Prices for whole chicken, for example, rose 6 percent from a year ago but prices for boneless breasts were 5 percent lower.