Source: Chris Scott, MEATINGPLACE, 1/17/18


Demand for chicken that is antibiotic free (ABF) is not matching the amount of ABF poultry being produced, threatening the bottom line of America’s poultry producers, Sanderson Farms Inc. warned in a Securities and Exchange Commission (SEC) filing.

The nation’s third-largest poultry processor said its customers are not demanding ABF chicken from Sanderson – which the filing said is more expensive to produce – because they buy fresh chicken primarily based on price. Sanderson added that it has no indication that it is losing market share by not offering ABF chicken because it focuses on the retail grocery and big bird deboning markets. Those markets do not supply organic, specialty foods or fast casual restaurant segments, like ABF adoptees Perdue Farms and Tyson Foods.

Sanderson also cited industry data indicating that ABF chicken represented an average of 40.5 percent of all U.S. fresh chicken production for the first 10 months of 2017, with only 15.8 percent of all ABF chicken produced being marketed as ABF. The SEC filing also noted that Sanderson’s profitability and shareholder value would suffer if the company were unable to pass along the higher cost of foods sold for ABF products to consumers.

The filing was released in advance of next month’s annual shareholder meeting and outlined several issues that are scheduled to be discussed at the Feb. 15 gathering. The Sanderson board is recommending a vote against an expected proposal to consider a policy to phase out “medically important antibiotics for disease prevention” in birds, the filing said. The company also said that switching to ABF chicken would “undermine our environmental sustainability efforts,” and would “compromise animal welfare” at Sanderson’s operations.

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