CHICAGO – Smithfield Foods and Sanderson Farms will give their quarterly reports on Tuesday, Aug. 26, and both companies are expected to report losses.

Smithfield will report fiscal first quarter results, and Sanderson will give its third quarter reports. According to Reuters, higher feed costs are expected to negatively affect both companies. Feed costs have affected many companies that raise their own animals, and while they have raised the costs of the meat, it has not been enough to affect the cost of the feed.

“Buying the feed and selling the meat is not nearly as good a model as it was a few years ago,” said Steve meter, economist at Paragon Economics. “That is a fundamental change. For a long time, you were a lot better off buying the feed instead of the animals.”

According to Reuters, Wall Street analysts expect Smithfield to report a quarterly loss of $9.12 million, compared to last year’s profit of $62 million. Sanderson Farms is expected to report a loss of $750,000, a change from last year’s quarterly profit of $30.7 million.

Meyer said that companies lost money on hogs in June and July and will likely lose money for the rest of the year.


Source: Reuters