The Registrant was incorporated in Mississippi in 1955, and is a fully-integrated
poultry processing company engaged in the production, processing, marketing
and distribution of fresh and frozen chicken products. In addition, the Registrant
is engaged in the processing, marketing and distribution of processed and minimally
prepared chicken.
The Registrant sells ice pack, chill pack, bulk pack and frozen chicken, in
whole, cut-up and boneless form, primarily under the Sanderson Farms® brand
name to retailers, distributors, and casual dining operators principally in
the southeastern, southwestern, northeastern and western United States, and
to customers who resell frozen chicken into export markets. During its fiscal
year ended October 31, 2016, the Registrant processed approximately 507 million
chickens, or approximately 3.8 billion dressed pounds.
The Registrant’s fresh and frozen chicken operations presently encompass
9 hatcheries, 8 feed mills and 10 processing plants, and those figures do not
include the facilities under construction at its new St. Pauls, North Carolina
complex. The Registrant began operations at the new St. Pauls hatchery in November
2016, and expects to begin processing chickens at the new processing plant in
January 2017. The Registrant has one prepared chicken plant.
The Registrant has contracts with operators of approximately 690 grow-out farms
that provide it with sufficient housing capacity for its current operations.
The Registrant also has contracts with operators of 208 breeder farms.
The Registrant is engaged in the production, processing, marketing and distribution
of fresh and frozen chicken and the preparation, processing, marketing and distribution
of processed and minimally prepared chicken items. The Registrant has one reporting
segment, poultry products.
The Registrant sells chill pack, ice pack, bulk pack and frozen chicken, in
whole, cut-up and boneless form, primarily under the Sanderson Farms® brand
name to retailers, distributors and casual dining operators principally in the
southeastern, southwestern, northeastern and western United States.
The Registrant conducts its chicken operations through Sanderson Farms, Inc.
(Production Division) and Sanderson Farms, Inc. (Processing Division), both
of which are wholly-owned subsidiaries of Sanderson Farms, Inc. The production
subsidiary, Sanderson Farms, Inc. (Production Division), which has facilities
in Laurel, Collins, Hazlehurst and McComb, Mississippi; Bryan, Waco, Palestine,
Freestone County, and Robertson County, Texas; Adel, Georgia and Kinston, North
Carolina, is engaged in the production of chickens to the broiler stage. Sanderson
Farms, Inc. (Processing Division), which has facilities in Laurel, Collins,
Hazlehurst and McComb, Mississippi; Hammond, Louisiana; Bryan, Palestine, and
Waco, Texas; Moultrie, Georgia and Kinston, North Carolina, is engaged in the
processing, sale and distribution of chickens.
The Registrant conducts its prepared chicken business through its wholly-owned
subsidiary, Sanderson Farms, Inc. (Foods Division), which has a facility in
Flowood, Mississippi. This facility is engaged in the processing, marketing
and distribution of approximately 70 processed and minimally prepared chicken
items, which it sells nationally and regionally, principally to distributors
and national food service accounts. The facility is managed by the same senior
management team that manages our Processing Division.
Generally, the Registrant prices much of its chicken products based upon weekly
and daily market prices reported by the Georgia Department of Agriculture and
by private firms such as Urner Barry. Consistent with the industry, the Registrant’s
profitability is affected by such market prices, which may fluctuate substantially
and exhibit cyclical and seasonal characteristics. The Registrant will adjust
base prices depending upon value added, volume, product mix and other factors.
While base prices may change weekly and daily, the Registrant’s adjustments
are generally negotiated from time to time with the Registrant’s customers.
The Registrant’s sales are generally made on an as-ordered basis, and
the Registrant maintains some long-term sales contracts with its customers.
These agreements, which provide for the pricing of product based on formulas
that use market prices reported by the Georgia Department of Agriculture and
by private firms such as Urner Barry, as well as various other guidelines for
the relationship between the parties, do not require the customers to purchase
or the Company to sell any specific quantity of product.
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