American meat supplies have been piling up for much of 2018, and for Sanderson Farms Inc., the nation’s third-largest poultry processor, that means much lower prices for its products.
Boneless chicken-breast prices dropped 26 percent, and jumbo wings were 30 percent cheaper in the three months ending Oct. 31, compared with the prior year, Sanderson said Thursday in a statement on fourth-quarter results. Overall, prices for poultry products were 9.2 percent lower in fiscal 2018.
Sanderson sold a record 4.44 billion pounds of poultry in fiscal 2018. But prices for chicken have been sagging as supplies of competing commodities such as pork and beef overwhelm Americans with meat. Chicken, in particular, has suffered as retailers promoted more premium items like steaks.
Meanwhile, Hurricanes Michael and Florence tore through some of the company’s operations in Georgia and North Carolina this year. That resulted in extra costs and inefficiencies. Sanderson reported a net loss of $1.95 a share for the fiscal fourth quarter, compared with the average analyst forecast of $1.35 in estimates compiled by Bloomberg. Net sales were $798.1 million, topping the analyst outlook.
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The quarter was “the end of a challenging year for Sanderson Farms,” said Joe F. Sanderson Jr., chairman and chief executive officer of the company. “Market conditions weakened significantly during our fourth fiscal quarter of 2018 as market prices declined after Labor Day, reflecting weak demand for products produced for the food-service market at our plants that process a larger bird. The decrease in demand and resulting weak market prices were exacerbated by hurricane disruptions.”