Sanderson Farms, Inc. (NASDAQ:SAFM) Q1 2016 Earnings Conference Call - Final Transcript

Feb 25, 2016 • 11:00 am ET

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Sanderson Farms, Inc. (NASDAQ:SAFM) Q1 2016 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, everyone and welcome to the Sanderson Farms First Quarter 2016 Conference Call. Today's call is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to Mr. Joe Sanderson, Chairman and CEO. Please go ahead, sir.

Executive
Joe F. Sanderson

Thank you. Good morning, and welcome to Sanderson Farms first quarter conference call. This morning we announced net income of $10.7 million, or $0.47 per share for our first quarter of fiscal 2016. This compares to net income of $66.5 million, or $2.87 per share for our first quarter of fiscal 2015. I'll begin the call with comments about general market conditions and grain cost and then turn the call over to Lampkin and Mike, for a more detailed accounting quarter. Before we make any further comments, I'll ask my guests cautionary statements regarding forward-looking statements.

Executive
Mike Cockrell

Thank you, Joe and good morning everyone. This call will contain forward-looking statements about the business financial condition and prospects of the company. Examples of forward-looking statements include statements regarding supply and demand factors, feature grain and chicken market prices, economic conditions, production levels and our future growth plan. The actual performance of the company could differ materially from that indicated by the forward-looking statements because of various risks and uncertainties. These risks and uncertainties are describing our most recent annual report on form 10-K. And on the company's quarterly report on form 10-Q by with the SEC this morning in connection with our first fiscal quarter.

Executive
Joe F. Sanderson

Thank you Mike. Results for the first quarter reflect the lower market prices compared to the start of fiscal 2015. Demand for Retail grocery store customers has remained stable, and that stability is reflected in a Georgia Dock price. That was only slightly lower than during last year first quarter.

On the other hand, market prices for food service and export products were significantly lower compared to last year's first quarter. While those markets improved somewhat in January, they remained over supplied primarily as a result of weak export demand. Quoted market prices for boneless breast, tenders, wings and leg quarters were all lower during the quarter compared to last year's first fiscal quarter.

While overall market prices for chicken were lower during the quarter compared to last year market prices for corn and soybean meal were also lower. Our feed costs were down almost $0.03 per pound of chicken process during that first fiscal quarter. Market prices for corn and soybean meal have moved lower as a result of last year's near record harvest. And both corn and soybean oil soy bean balance tables are healthy as we move into the 2016 planning season. The next events to grain markets are why we'll watch are the South American harvest the market supply and demand report and the march 31 planting intentions report.

The South American crops are progressing well. And expectations now are for good crop from that region. And it's 2016 agricultural outlook forum this morning, the USDA estimated corn