Source:  MEATINGPLACE.COM, 2/18/11

Sanderson Farms remains committed to building a second plant in North Carolina that will increase its big bird deboning capabilities and continue the company’s track record of steady growth, Chief Executive Joe Sanderson said Thursday at Sanderson’s annual shareholder meeting.

"Our revenue growth reflects the solid execution of our growth strategy to steadily increase our production capacity, and our net results reflect the quality of our operations,” Sanderson said. The company posted record sales of $1.9 billion in fiscal 2010, up 7 percent from the year before.

The company’s product mix will be weighted toward chill-pack poultry once its new Kinston, N.C., plant is running at full capacity, at which point 1,500 employees will produce 6.7 million pounds per week of dressed poultry meat, Sanderson said.

The planned second plant would allow the product mix to swing back toward a greater percentage of big bird deboning, he said. With the two new North Carolina plants, the company’s production capacity would increase by 30 percent.

Plans for the new processing facility in Nash County, North Carolina, have been delayed by challenges to local zoning laws from opponents of the plant. Construction was originally slated to begin in March.
Earlier this month, county commissioners approved new zoning rules that could finally clear the way for the plant to be built 

Supply and demand
Sanderson said the industry will experience “much higher” grain costs in 2011 than last year due to strong demand and low supplies. With grain costs moving higher, prices will have to move up as well, he said. The company also expects a strong export market for chicken in 2011.

Consumer demand for chicken at retail is steady, but food service demand will not improve until the economy picks up and workers find employment again, Sanderson said.

Soft demand for chicken is helping to curb egg sets, Sanderson noted. Because egg sets rose about 4 percent to 5 percent in November and December from a year ago, the amount of chicken on the market is now up by the same percentage. However, egg sets have trended lower in the past few weeks and are now approximately at the same level as a year ago.

“The reality of a sluggish chicken market and higher costs has promoted more restraint in eggs sets in January and February,” Sanderson said.

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