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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Q & A
Operator
Operator

Thank you. [Operator Instructions]. Our first question will come from Ken Goldman.

Analyst
Kenneth B. Goldman

Good morning everyone.

Executive
Joe F. Sanderson

Good morning, Ken.

Analyst
Kenneth B. Goldman

Two questions from me. Lampkin, you mentioned that as a company, you're always looking for efficiency improvements. That's nothing new. As you as you look at what some of the packaged food producers are doing companies like Campbell, Mondelez I won't go as far as Kraft but are there things you can learn from them in terms of your own cost structure. Again, I realize, I guess making chickens pretty different thing than producing cornflakes, but just looking at some of these margin numbers coming in, does it does it make you as an essential to be more I guess, aggressive with your own P&L?

Executive
Lampkin Butts

Yeah. The businesses you mentioned, I don't know anything about them. We capture and identify opportunities by looking at just about everything that goes on in our industry, and that's through Agri stats. And so that's between looking at Agri stats and look and comparing our own operations as improvements materialize that's where we develop our targets for opportunity.

Analyst
Kenneth B. Goldman

Okay, I'll follow up on that one afterward. But my second question is, you highlighted market prices for Georgia dork as reasonably close to last year's levels. I'm curious the prices in the quarter that you actually received for tray pack. Were they at similar levels to these market prices? Or do they travel a bit? I guess how are those prices trending into 2Q as well?

Executive
Lampkin Butts

I would say they are very similar to what we tray pack would bet like last year the the prices, particularly in November and December. We were selling boneless breasts off of $1.11 on a Berry and we were selling leg quarters of the market was $0.15 for November and December and that is a no go and that doesn't work. That January, we got about a nickel, about a nickel a pound improvement on leg quarters. And we got $0.10 improvement on boneless breast.

And I think you all know how many pounds a week we do a boneless breast and leg quarters is 16 million pounds with leg quarters and you know 5 million pounds a bone and you multiply that times a nickel a pound and times 10 six pounds and January was much better month and then take a little bit to make that work and but tripod was about the same.

Executive
Mike Cockrell

Ken and as far as the realized prices versus the Georgia dork. You know, I realized prices are going to track very close to that the only thing that would messed are that makes that different is the number of add features that they are during any particular month or quarter. And during the first quarter we were what 5% realized value.

Executive
Lampkin Butts

Yeah. So we're not insulated from herbarium.

Analyst
Kenneth B. Goldman

Well what happens in November and December though?

Executive
Lampkin Butts

Yeah, you got you don't you? You got hams and turkeys. So you have excess product in November and