Good results from National Beef1 August 2011
Privately owned National Beef Packing Company (NBP), headquartered in Kansas City, have made good profits although net income in its fiscal 2011 third quarter fell 22% from year earlier. NBP earned $61.5 million in the quarter ended May 28, virtually the same as it earned in the prior quarter. They earned $177.2 million in the first nine months of fiscal 2011, 4.4% more than for the same period in fiscal 2010. National’s sales were up 16-17% on last year in the quarter and for 39 weeks.
The company said that cattle supplies during the summer are expected to remain above last years levels and shift below prior year levels during the fourth quarter due to drought-induced placement of cattle on to feed earlier than anticipated. Liquidation of herds on the Southern Plains and Southwest due to drought continues to keep long-term prospects for any type of herd growth unlikely through 2012.
NBP said they anticipate annual fed cattle supplies to continue to decline with the ongoing downsizing in the cow-calf sector.
National Beef are the fourth largest US beef processor had net sales in their third quarter of $1.78 billion, versus $1.54 billion a year earlier. The 15.3% increase in sales resulted primarily from a 15.9% increase in the sales per head. Demand for beef products remained strong and price of beef products increased during the period. Cost of sales though was 17.7% higher than a year earlier, primarily a result of a 19.8% increase in average cattle prices. Operating income in the quarter was $65.1 million versus $82.8 million, while net income was $61.5 million versus $79.2 million. They had a net income of $61.3 million in their fiscal 2011 second quarter, versus $49.4 million a year earlier.
For 39 weeks, National Beef had sales of $5.01 billion, versus $4.22 billion a year earlier. The 18.7% increase in sales resulted primarily from a 16.7% increase in the sales per head. Cost of sales though was 19.9% higher than a year earlier, primarily a result of a 19.7% increase in average cattle prices and a 2.0% increase in the number of cattle processed during the period. Operating income in the nine months was $186.9 million versus $185.6 million while net income was $177.2 million versus $169.8 million.