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Email Content: Poultry Industry News, Comments and more by Simon M. Shane

Seaboard Q3 Report Includes Butterball Profit


On November 1st Seaboard Corporation (SEB) filed SEC Form 10-Q reporting results for Q3 of FY 2022 ending October 1st.  The company is a conglomerate with segments dedicated to pork production, grain milling, commodity trading, marine transport and power generation. Seaboard owned 50 percent of the equity of Butterball LLC at the end of the first quarter with warrants to purchase an additional five percent of the shares, expiring in 2025.  On April 19th Seaboard exercised rights to purchase the additional equity thereby acquiring a controlling interest with 55 percent of the equity of the turkey producer.


For Q3 FY 2022 SEB earned $134 million on revenue of $2,895 million with an EPS of $125.78. Comparable values for Q3 of FY 2021 ending October 2nd were net income of $103 million on revenue of $2,276 million with an EPS of $81.50


On October 1st Seaboard posted total assets of $7,744 million with long-term debt and lease obligations of $1,375 million.  Seaboard had a market capitalization of $4,405 million on November 3rd with 79 percent of equity held internally. The 12-month trailing operating margin was 5.1 percent with a profit margin of 4.8 percent. Return on assets and equity were 4.8 and 10.6 percent respectively. During the past 52 weeks share price has ranged from $3,295 to $3,885 with a 50-day moving average of $3,669.


Effective April 19th Seaboard was the majority shareholder of Butterball LLC., ranked as the second largest turkey producer in the U.S. The performance of this now-incorporated subsidiary, producing 850 million tons of RTC product in 2021 from four complexes, is reflected in the Seaboard Corp. SEC Q-10 submission. For Q3 FY 2022 Butterball posted sales of $552 million compared to $464 million in Q3 FY 2021. Net income attained $63 million generating a profit margin of 11.4 percent compared to a loss of $(18) million for the corresponding 3rd Quarter of 2021. As of October 1st 2022 Butterball LLC posted assets of $1,200 million.


The SEC 10-K report includes the following statement:- “The Turkey Segment, accounted for using the equity method, represents Seaboard’s investment in Butterball, LLC. The Turkey segment, accounted for using the equity method, represents Seaboard’s investment in Butterball, LLC. The increase in income from affiliates for the three month period of 2022 compared to the same period in 2021 was primarily the result of higher selling prices due to product mix and grain-related mark-to-market derivative contract gains, partially offset by lower volumes of turkey products sold and higher feed costs.

Management is unable to predict market prices for turkey products or the cost of feed for future periods; however, management anticipates this segment will be profitable for the remainder of 2022”

Copyright © 2022 Simon M. Shane