Sanderson Farms, Inc. Provides Update on Hurricane Florence Damage
As earlier reported, the Company experienced no significant damage to
either of its
The Company continues its assessment of damage to independent farms and
losses to its live inventories. Out of 880 broiler houses in
The Company does not believe the loss of housing capacity will affect its ongoing operations, as it can shorten layouts and take other temporary measures to compensate for these losses.
In addition to the loss of live birds, the Company will be unable to hatch and place live broilers in the field at its normal rate during the coming week. While the Company maintained operations at its hatcheries, the Company was unable to set eggs in hatcheries on its normal schedule. The reduced egg sets and chick placements will affect the Company’s weekly processing volumes through December, with the reductions occurring primarily during October and November.
Electrical power is being restored to the farms of independent contract producers on a steady basis, but the Company believes it could be as long as three weeks before power is fully restored to all of its independent contractors’ farms. Until power is restored, equipment on grow out farms, including ventilation, feeding and watering equipment, will be operated using electricity generated by diesel-powered generators. The Company is providing diesel fuel to its independent contract producers to allow them to run their generators and maintain power to farms. The Company believes it has been able to secure sufficient diesel fuel to operate all of the farms housing its live inventories.
Sanderson continued, “I am also pleased that our assets were not significantly damaged by the hurricane. While the storm’s impact on our live inventories and live production process will have an impact on the Company’s capacity and volume over the next two months, none of the losses sustained will be long term. The impact on volume from our live losses will be spread over three months, although inefficiencies resulting from bird stress, overtime pay and loss of processing days will affect the Company’s fourth fiscal quarter. Our focus over the next few weeks will include working to maintain our assets, responding to customers’ needs and replenishing our live production inventories.
“Most importantly, we will provide ice, water, food and other
necessities to those affected by this catastrophic storm. While we will
work hard over the next week to get our operations back on line, our
primary focus will be to respond to the needs of our local communities.
We are fortunate that
This press release includes forward-looking statements within the
meaning of the “safe harbor” provisions of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended.Forward-looking statements are based on a
number of assumptions about future events and are subject to various
risks, uncertainties and other factors that may cause actual results to
differ materially from the views, beliefs, projections and estimates
expressed in such statements.These risks, uncertainties and
other factors include, but are not limited to, those discussed
under “Risk Factors” in the Company’s Annual Report on Form 10-K for the
fiscal year ended
(1) Changes in the market price for the Company’s finished products and feed grains, both of which may fluctuate substantially and exhibit cyclical characteristics typically associated with commodity markets.
(2) Changes in economic and business conditions, monetary and fiscal policies or the amount of growth, stagnation or recession in the global or U.S. economies, any of which may affect the value of inventories, the collectability of accounts receivable or the financial integrity of customers, and the ability of the end user or consumer to afford protein.
(3) Changes in the political or economic climate, trade policies, laws and regulations or the domestic poultry industry of countries to which the Company or other companies in the poultry industry ship product, and other changes that might limit the Company’s or the industry’s access to foreign markets.
(4) Changes in laws, regulations, and other activities in government agencies and similar organizations applicable to the Company and the poultry industry and changes in laws, regulations and other activities in government agencies and similar organizations related to food safety.
(5) Various inventory risks due to changes in market conditions, including, but not limited to, the risk that net realizable values of live and processed poultry inventories might be lower than the cost of such inventories, requiring a downward adjustment to record the value of such inventories at the lower of cost or net realizable value as required by generally accepted accounting principles.
(6) Changes in and effects of competition, which is significant in all markets in which the Company competes, and the effectiveness of marketing and advertising programs. The Company competes with regional and national firms, some of which have greater financial and marketing resources than the Company.
(7) Changes in accounting policies and practices adopted voluntarily by
the Company or required to be adopted by accounting principles generally
(8) Disease outbreaks affecting the production, performance and/or marketability of the Company’s poultry products, or the contamination of its products.
(9) Changes in the availability and cost of labor and growers.
(10) The loss of any of the Company’s major customers.
(11) Inclement weather that could hurt Company flocks or otherwise adversely affect the Company’s operations, or changes in global weather patterns that could affect the supply and price of feed grains.
(12) Failure to respond to changing consumer preferences and negative or competitive media campaigns.
(13) Failure to successfully and efficiently start up and run a new plant or integrate any business the Company might acquire.
(14) Unfavorable results from currently pending litigation and proceedings or litigation and proceedings that could arise in the future.
Readers are cautioned not to place undue reliance on forward-looking
statements made by or on behalf of
Sanderson Farms, Inc.
Mike Cockrell, 601-649-4030
Treasurer & Chief Financial Officer