Source: MEATINGPLACE, 12/18/14

Sanderson Farms Inc. on Thursday said its profit more than doubled in the fiscal fourth quarter, helped by lower grain prices and strong retail buying, and predicted an improving U.S. economy will support demand in the year ahead.

“We are a bit more optimistic about the consumer in 2015 than we have been in the past. And it feels like the economy is moving in the right direction,” Chief Executive Joe Sanderson Jr. told analysts on a conference call.

The company said overall market prices for chicken improved only slightly during the past year, but grocery demand remains strong due to high prices for beef.

While depleted breeder stocks constrained production numbers during much of fiscal 2014, the industry could produce between 2.5 percent and 3.5 percent more chicken during 2015, Sanderson predicted.

“More optimistic and fully employed American consumers could easily absorb that increase,” Sanderson added.

“However, the extent to which foodservice customers will feature chicken over beef, and the extent to which consumers filling their grocery carts will continue to switch from high-priced beef to lower-cost options, is not knowable today,” he cautioned.

The company itself expects to process 3.351 billion pounds of chicken in fiscal 2015, up 9.6 percent over pounds processed in fiscal 2014.

During 2015, the company will focus on getting its Palestine, Texas, complex up to full production and remains committed to expanding the company beyond Palestine, Sanderson said.

The company, which wants to build a new plant in North Carolina, could know by the end of January whether it has a deal for a site and, if it gets the green light, could begin construction in March or April, Sanderson said.

Sanderson Farms said its earnings rose to $93.1 million, or $4.04 a share, in the quarter ended Oct. 31, from $45.3 million, or $1.97 a share, a year ago. Fourth-quarter net sales rose to $760.9 million from $727.1 million.

Analysts had expected earnings of $4.01 a share on revenue of $758.3 million, according to Thomson Reuters.

Sanderson Farms shares fell about 4 percent to trade at $84 at midday.

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