New York, 28 – Sanderson Farms is expected to see an increase in expenses and a reduction in production volumes by the end of the fiscal year because of the new coronavirus (covid-19) pandemic, the company said on Thursday. “We anticipate that these lower production rates and higher operating costs will continue until the effects of covid-19 on our company, our customers, our employees and the communities in which we operate decrease,” said the executive director of the processing company. birds, Joe Sanderson.
According to Sanderson, the estimates point to a reduction in the company’s production in the rest of the fiscal year, due to social distance measures and operating limitations caused by the virus. “We expect our total production during the third and fourth fiscal quarters of 2020 to be 2.2% and 5.0%, respectively, compared to the same quarters in fiscal year 2019,” he said in a press release. results.
With regard to costs, the company’s expectation is that grain prices, used for animal feed, will remain lower until the end of 2020 compared to 2019. “There are ample supplies of corn and soybeans worldwide, and the pandemic had an impact on the demand for feed grains, especially corn, also used for ethanol “, informed the company. Another evidence of this, according to Joe Sanderson, is the crop monitoring reports from the US Department of Agriculture (USDA). The most recent survey showed that corn planting is at 88% in the country, well above the 55% observed in the same period last year.
The spread of the new coronavirus halted production at many meat processing facilities in the United States, increasing pressure on the nation’s food supply chain. In April, however, the units began to reopen after U.S. President Donald Trump signed an executive order to guarantee meat production during the pandemic, establishing a series of rules and inspections for the return of plant operations.
In addition to the temporary shutdown of activities, the poultry processor also reported that it is dealing with a transformation in its customers’ demand. In the last quarter, purchases from restaurants and other establishments in the food service segment fell amid social isolation measures, but purchases from grocery stores increased. “General prices for chicken products sold to retail customers remained relatively strong during the second quarter and volumes reflected the increased demand caused by consumers who cook more meals at home, rather than going to restaurants and bars “said Joe Sanderson.
In the second fiscal quarter, ended April 30, Sanderson’s sales increased from $ 845.2 million to $ 844.7 million in the year-over-year comparison. Despite the growth, revenue was still below analysts’ expectations of $ 848 million, according to FactSet. The company posted a profit of $ 6.1 million, or 28 cents per share, well below the $ 40.6 million, or $ 1.83 per share, recorded a year earlier. The government’s $ 37.4 million tax benefit boosted the company’s earnings. Without the contribution, Sanderson saw a quarterly loss of $ 31.3 million.
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