Sanderson Farms, Inc. (NASDAQ: SAFM) today provided an update on
the Company’s operations and the impact of the severe winter storm
that has affected the Company’s Texas, Louisiana, and Mississippi
locations.
Winter storm Uri brought bitter cold temperatures, snow and ice,
leaving millions without power across the Company’s footprint in
Texas, Louisiana and Mississippi, on Monday, and Uri, along with
winter storm Viola, will continue to affect operations. The
National Weather Service reports extremely cold temperatures as low
as minus five degrees are predicted on Tuesday for all Central
Texas, and record-breaking cold temperatures continue in
Mississippi. In addition, the National Weather Service predicts
more snow, ice and extreme cold across the Company’s Texas
footprint on Wednesday and Thursday.
In anticipation of the storm, the Company activated its Crisis
Management Plan this past weekend. “We were able to operate at
least one shift at our Texas, Hammond, Louisiana, and Collins and
Laurel, Mississippi, plants on Saturday,” said Joe F. Sanderson,
Jr., chairman and chief executive officer of Sanderson Farms, Inc.
“We also took steps to secure our assets, provide fuel, feed and
support to our independent contract producers in anticipation of
extended power outages, and suspended operations at our Texas,
Mississippi and Hammond, Louisiana, processing plants Monday and
Tuesday.
“While our processing plants, feed mills and hatcheries are
secure, we continue to monitor conditions on our live grow-out
farms and live production supply chain. As of this morning, out of
1,918 broiler houses in Texas, as many as 200 do not have power and
are experiencing generator failure, and another 300 are operating
on generator power. Of 87 pullet houses and 194 breeder houses in
Texas, seven pullet houses and at least four breeder houses are
operating on generator power. In addition, 24 broiler houses have
ruptured or frozen water pipes and are without water. While our
four hatcheries in Texas have maintained power, two have been
unable to deliver day-old chicks to grow-out farms and all four
hatcheries will be unable to receive hatching eggs on our regular
schedule until road conditions improve. Based on current weather
reports, that may not happen before early next week.
“In Mississippi, four broiler houses were destroyed as a result
of collapsed roofs from accumulated ice and snow. Our hatcheries in
Mississippi continue to operate normally, but our processing plants
will remain closed today. Conditions in Mississippi have improved
this morning, and we expect to be able to resume operations in at
least two of our Mississippi locations on Wednesday as well as
Hammond.
“This experience is similar to a hurricane,” added Sanderson.
“We have experience managing through catastrophic weather events,
and this will be no different. Our top priority has been and will
continue to be the safety of our employees and independent contract
producers, as well as the health and wellbeing of the animals under
our care. We will resume normal operations when it is safe to do
so, and will, in the meantime, do everything we can to maintain our
live production supply chain. We are grateful for the support from
local authorities, our customers, and communities, and we will do
all in our power to assist in the recovery effort when this weather
event ends. Fortunately, our Georgia and North Carolina locations
are operating normally.”
The Company will provide updates as conditions warrant, and will
provide further updates on Thursday, February 25, 2021, when it is
scheduled to publish financial and operating results for its first
fiscal quarter ended January 31, 2021. The Company will host a call
with investors at 10:00 AM CST that morning, and information
regarding that call is available on the Company’s website at
www.sandersonfarms.com.
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, 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
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 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
growers.
(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
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.
(15) Changes resulting from the COVID-19 pandemic, which could
exacerbate any of the risks described above, and could include:
high absentee rates that have prevented and may continue to prevent
the Company from running some of its facilities at full capacity,
or could in the future cause facility closures; an inability of
contract poultry producers to manage their flocks; supply chain
disruptions for feed grains; further changes in customer orders due
to shifting consumer patterns; disruptions in logistics and the
distribution chain for the Company’s products; liquidity
challenges; and a continued or worsening decline in global
commercial activity, among other unfavorable conditions.
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 future growth plans, future demand for its
products, future prices for feed grains, future expenses, future
production levels, future earnings, economic conditions or other
industry conditions.
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version on businesswire.com: https://www.businesswire.com/news/home/20210216006043/en/
Mike Cockrell Treasurer, Chief Financial Officer &
Chief Legal Officer (601) 649-4030
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