Source: Chris Scott, MEATINGPLACE, 4/16/14

At least two industry analysts are raising their 2014 earnings estimates for two chicken processors in light of stronger poultry prices and other positive factors, including higher corn production.

Farha Aslam at Stephens Inc. raised her fiscal 2014 earnings estimates for Sanderson Farms to $7.15 a share from $5.70 on sharply higher chicken prices, which should drive higher earnings for the year. With whole birds at historic highs of $1.07 and chicken breasts expected to hit $1.85 later this year, Aslam notes that the supply will continue to be constrained this year because of recent cold weather. She adds that U.S. export demand should rise if Mexico experiences a widespread avian flu outbreak, pointing out that recent channel checks indicate avian influenza has been reported in southern Mexico.

Separately, Kenneth B. Zaslow at BMO Capital Markets today raised his 2014 earnings estimate for Pilgrim’s Pride Corp. to $1.76 a share from $1.66. He cited the current outlook for chicken exports to Mexico and cost savings programs at the Greeley, Colo.-based company. Zaslow also notes that U.S. corn production may exceed 13 billion bushel and that U.S. corn exports are “stellar” and should support the outlook for U.S. corn exports for the rest of the year.

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