Meat + Poultry - February 2006 - 4

Continued from Page 3
came just days after similar news from
Cagle's, Inc. For the third quarter ended Dec. 31, Cagle's posted a loss of
$534,000, compared with net income of
$115,000 in the same period last year.
Net sales for the quarter rose 9 percent to $54,495,000, reflecting an increase in pounds marketed of 15.18 percent offset by sales prices that were 5.95
percent lower per pound.
J. Douglas Cagle, chairman and
C.E.O., said A.I. "severely impacted our
industry, both domestically and internationally. (It) has affected demand in our
industry's overseas markets resulting in
lower pricing and dramatically increased
cold storage inventory domestically."
Meanwhile, Tyson Foods' most recent results reflected similar market challenges. For its first quarter
of fiscal 2006, ended Dec.
31, the company's net income declined $9 million
compared with the same
period in fiscal 2005, declining from $48 million last year to $39
million this year. Sales for the first quarter
of 2006 were $6,454,000,000 compared
with $6,452,000,000 for the same period
in 2005.
The company also announced it was
slashing its earnings guidance for fiscal
2006 from a range of 95c to $1.25 per
diluted share, announced this past November, to 50c to 80c per diluted share.
"We entered fiscal 2006 knowing
market conditions would be difficult, es-

pecially early in the year," said John Tyson, chairman and C.E.O. "During the
first quarter our chicken segment generated solid results and prepared foods
improved, while pork struggled and beef
further deteriorated, producing significant operating losses.
"Recent declines in international demand for chicken coupled with greater-than-expected domestic supply will
dramatically impact the projected performance of our chicken segment."
In Tyson's chicken division, first quarter fiscal 2006 operating income increased $19 million compared with the
same period last year in fiscal 2005, going from $104 million to $123 million.
Operating income was positively impacted by decreased grain costs of
approximately $14 million
compared with the same
period last year.
The company's beef
division suffered a $38
million decline in operating
income due to trade disruptions,
higher operating costs and a labor dispute at its facility in Lakeside, Alberta.
Operating income in Tyson's pork division was negatively impacted by decreased
average sales prices and higher operating
costs per head, partially offset by lower
live costs and increased sales volumes.
The company's prepared foods segment saw operating income increase $9
million compared with the same period
last year.

Hog prices hinder P.S.F.'s
third quarter earnings
KANSAS CITY, Mo. - Net income at
Premium Standard Farms, Inc. in the
third quarter ended Dec. 24, 2005, was
$13,754,000, equal to 44c per share on
the common stock, compared with net
income of $22,996,000, or 74c per share,
in the third quarter of 2005. Net sales for
the quarter totaled $242,899,000, down
2 percent from $246,759,000 during the
same period a year ago. Company executives attributed
the decrease in
net sales during
the quarter to a 17
percent decline in
hog prices, which
was offset by increased volume
and
favorable
hog hedging.
Net sales for
the first nine months of fiscal 2006 were
$701,437,000, which compared with
$677,725,000 last year.
"We are pleased with our third quarter results, which were in line with internal expectations," said John Meyer,
C.E.O. "During the quarter, our net income increased 12.5 percent over our
second quarter as a result of our continued efforts to improve processing margins and increase productivity in the
production segment."

Trim-Rite to build $17 million pork plant in Illinois

Mexico to resume
importing bone-in beef

CARPENTERSVILLE, Ill. - County and state officials have announced
plans for the construction of Trim-Rite
Food Corp.'s $17-million pork processing plant in Stephenson County, Ill., just
outside of Freeport. Negotiations between company officials and local government leaders about the environmental and financial impact of the plant have
been ongoing for approximately a year.
The announcement was made earlier
this month.
The new hog plant, which will span
more than 100,000 square feet, is expected to employ 400 workers by the
end of the development's first phase and
up to as many as 800 people if a second

WASHINGTON - Trade officials in
Mexico this past month announced the
country would reopen its borders to U.S.
and Canadian bone-in beef from animals less than 30 months of age. A ban
on bone-in beef had been in place since
the 2003 discovery of bovine spongiform encephalopathy in a single U.S.
cow. Trade with Mexico will begin after
officials from the three countries agree
on trade procedures.
"Mexico's decision to further open its
market to U.S. beef is a testament to the
safety of U.S. beef and a clear expression of confidence in the U.S. safeguards
to prevent B.S.E.," said U.S. Secretary
of Agriculture Mike Johanns.

MEAT&POULTRY

February 2006

shift is added. Trim-Rite officials say the
plant features include: a state-of-the-art
air filtration system, a CO2 stunning system for slaughtering hogs, automated
processing equipment, and a snap-chiller to cool the meat in less than an hour.
The company reportedly received more
than $1.7 million worth of tax incentives
and grants to build the new plant in Stephenson County.
Freeport Farms, the name of TrimRite's proposed plant, will be built on
approximately 25 acres of industrially
zoned land within the Mill Race Crossing economic development area outside
Freeport. The plant is scheduled to open
in the first quarter of 2007.

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