Premium Standard profits to drop down

by Editor
Monday, November 06, 2006

Net income of Premium Standard Farms, Kansas City, for the fiscal second quarter dropped from $12.2 million in 2005 to $4.3 million this year.

However, sales rose by 3.4% from $213.2 million last year to $220.4 million over the same period in 2006.

The lower results are due to a difficult business environment and the company's pending merger with Smithfield Foods. Another contributor was flat sales in the export market, compared to a 55% increase in 2005.

Although hog prices are expected to remain above historical averages, they will be below prices in 2005, leading to a suppression of sales and profits through the rest of the fiscal year, the Company told.

Premium Standard Farms is one of the largest vertically integrated providers of pork products in the United States, producing pork products for the retail, wholesale, foodservice, export, and further processor markets. Premium Standard Farms is the nation's second largest pork producer and sixth largest pork processor, with approximately 4,300 employees.