Sanderson Farms Inc. on Thursday said it would delay the construction of a new poultry complex in Kinston, N.C., owing to the challenging economic environment.

The Laurel, Miss.-based chicken company had said in late April that it would invest $126.5 million in the project, which includes a new feed mill, hatchery and processing plant. 

"In light of escalating prices for corn and soybean meal, our primary feed ingredients, it has become increasingly difficult to predict our future input costs," Chairman and CEO Joe F. Sanderson said in announcing the delay. "While our balance sheet remains strong, we believe it is prudent to be conservative with our working capital and our balance sheet at this time."

Sanderson also said that the recent Midwest flooding contributed to the decision as millions of acres of grain were wiped out.

"In spite of this decision, we remain committed to our long term growth, to the new Kinston complex and to the local communities in North Carolina that have graciously supported this project," Sanderson added. "As always, our goal is to manage Sanderson Farms for the long term, and we look forward to pursuing this expansion opportunity at the appropriate time."

In a note to investors, investment banker Stephens Inc. called the move good for the industry and good for Sanderson Farms.

For more stories, go to www.meatingplace.com.