Sanderson Farms CEO: Chicken industry needs to cut production

In a phone call with investors, Sanderson Farms CEO Joe Sanderson Jr. said that the industry will need to start cutting production, possibly twice this year, to restore profitability to the industry. Those cuts could start by the July 4 holiday if there is no improvement in consumer demand and prices, reports MarketWatch. A second round of cuts may be needed in the fall, he added.

"The industry cannot sustain losses like they are sustaining for a long period of time," Sanderson said, adding that a recovery in June seems unlikely. "Typically in my experience, the first cut is not enough.”

Sanderson Farms recently posted a second-quarter loss due in part to feed costs and soft chicken prices. Sanderson said that the majority of chicken producers are losing money, and he personally knows of three smaller companies that are currently looking to be acquired.

Source: MarketWatch

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