Sanderson Farms, Inc. (NASDAQ: SAFM) reported today on measures
it is taking in response to the COVID-19 pandemic.
“With so much uncertainty surrounding the novel coronavirus, and
the changes we face in our daily lives, Sanderson Farms wants to
reassure our customers, consumers and communities that we will
continue to process and ship high-quality, safe and affordable
poultry products,” said Joe F. Sanderson, chairman and chief
executive officer of Sanderson Farms, Inc. “Currently, all 12 of
the Company’s poultry processing complexes and our prepared chicken
plant, as well as our corporate headquarters, are operating
normally. The Company has not experienced any supply chain
disruptions, and our logistics team continues to meet delivery
needs and schedules.”
The Company has had no reports that any of its personnel or
contract growers have tested positive for the virus. Management is
monitoring operations closely, however, and has consulted with
infectious disease experts to adopt precautions throughout the
Company. If any Company or grower personnel test positive, or if
any area of the Company’s operations becomes exposed to the virus,
the Company will cooperate fully with local, state and federal
authorities to implement and enforce appropriate quarantines.
“While there are no known indications that COVID-19 is
transferable through food, our safety team is following guidance
from public health organizations, including the Centers for Disease
Control and Prevention (CDC) and the World Health Organization
(WHO), to limit the spread of the disease,” said Sanderson. “We
have also implemented a response plan to ensure that we can adjust
our product mix and production volumes as needed to continue to
fulfill customer orders for fresh chicken. Last Saturday, March 14,
2020, the Company operated one shift at each of its five plants
that process chicken for retail grocery store customers, and it
expects to operate two shifts at each of those plants next
Saturday, March 21, 2020. Among other modifications, the Company
can convert its Hammond and Hazlehurst plants to process more birds
for retail customers, should the need arise.”
Measures the Company has taken to prevent the spread of the
disease in its operations include:
- Employees and members of their households are prohibited from
traveling for personal reasons outside the United States, through
major international airports, to certain locations in the United
States with severe COVID-19 outbreaks, to non-work gatherings of 50
people or more, and other high-risk destinations. If those persons
must travel to or through these areas, the Company will require
them to remain away from work for a minimum of two weeks.
Additionally, if any of the Company’s contractors travel to or
through these areas, those persons will not be allowed on the
Company’s premises for a minimum of two weeks.
- All corporate travel, including on Company and commercial
aircraft, has been suspended, other than essential travel to
- Hand sanitizing stations appropriate for use in food processing
facilities have been installed at each Company location, and the
Company is reinforcing the importance of personal hygiene and
social distancing practices that can prevent the spread of the
- Company nurses have been trained on CDC protocols for novel
coronavirus and have masks and other equipment necessary for
contact with symptomatic employees.
- Supervisors have been trained to identify signs of the COVID-19
illness in employees.
- The Company has increased the frequency and scope of cleaning
of common areas like breakrooms and restrooms.
- Any personnel who have symptoms of COVID-19 will be placed on
two week’s paid sick leave.
- Members of the senior management team are working from home as
a precaution. Additionally, any employee who is in a high-risk
group for COVID-19 is being allowed to work from home.
“As of the close of business on Friday, March 13, 2020, we had
$811.9 million in borrowing capacity under our revolving credit
facility with several banks, and we are confident in the ability of
the bank group to meet draws,” added Sanderson. “Our first priority
is the health and wellbeing of our employees and contract growers.
We will remain in daily contact with federal, state and local
authorities about this rapidly evolving situation and any
additional steps we need to take to protect our employees, growers,
customers and other stakeholders.”
Sanderson Farms, Inc. is engaged in the production, processing,
marketing and distribution of fresh, frozen and minimally prepared
chicken. Its shares trade on the NASDAQ Global Select Market under
the symbol SAFM.
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 year ended October 31, 2019, and
quarterly report on Form 10-Q for the quarter ended January 31,
2020, and the following:
(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
(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 market 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 accepted in the United States.
(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
(10) The loss of any of the Company’s major customers.
(11) Inclement weather that could hurt Company flocks or
otherwise adversely affect its operations, or changes in global
weather patterns that could affect the supply and price of feed
(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
Readers are cautioned not to place undue reliance on
forward-looking statements made by or on behalf of Sanderson Farms.
Each such statement speaks only as of the day it was made. The
Company undertakes no obligation to update or to revise any
forward-looking statements. The factors described above cannot be
controlled by the Company. When used in this press release or in
the related conference call, the words “believes”, “estimates”,
“plans”, “expects”, “should”, “outlook”, and “anticipates” and
similar expressions as they relate to the Company or its management
are intended to identify forward‑looking statements. Examples of
forward-looking statements include statements of the Company’s
belief about its growth plans, future demand for its products,
future prices for feed grains, future expenses, future production
levels, future earnings, future growth plans or other industry
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