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.
