LAUREL, Miss. — Sanderson Farms Inc. reported improved sales and revenue for its second fiscal quarter while commenting on the status of its acquisition by Continental Grain Co. and Cargill.
For the second quarter ended April 30, 2022, net sales totaled $1.54 billion, up from $1.13 billion reported in the same quarter a year earlier.
Net profit for the quarter was $321.2 million, compared to net profit of $96.9 million recorded in the second quarter of 2021.
In the earnings release, Sanderson also provided details on the status of the merger.
A Form 10-Q from Sanderson Farms said the companies involved had received a request from the Justice Department for additional information and documents as part of its review of the transaction. The companies said they complied with that request and continued to cooperate with the DOJ. The parties expect the merger to be completed in the first half of calendar year 2022.
In the earnings news, Sanderson Farms also touched on other major market drivers right now, including avian influenza (AI). The poultry processor reported that one of its broiler flocks in North Carolina and a commercial pheasant flock in Texas were also affected.
“We have great confidence in our industry’s biosecurity program, but we cannot be certain that our herds or others in our industry will not be significantly affected by AI,” Sanderson Farms said. “Given our high degree of confidence in our biosafety programs, we believe the primary risks associated with national AI outbreaks are market risks, as many countries to which our industry sells products typically impose bans on the importation of chicken meat produced in the United States. when the AI is found.
Sanderson noted that the average selling price of produce increased by 33.6%, but was partially offset by increased food costs as well as higher non-food costs.
“The increase in average selling prices for fresh and frozen chicken products in the second quarter of fiscal 2022 compared to the same quarter a year ago reflects significantly higher realized prices for products from our plants which process larger poultry primarily for foodservice customers and further processors,” the company said.
Sanderson also said its strong demand for chicken has coincided with supply-side constraints. This includes limited capacity expansion, labor shortages, supply chain logistics and high construction costs.
Full earnings information can be found here.