PSF sees profits drop dramatically
Premium Standard Farms (PSF), US’s second largest pork producer, saw net profits drop by 65% in this year’s second quarter.
Last year profits were $12.2 million, but this year they proved to be only $4.3 million. Sales, however, rose 3% to $220.4 million from $213.2 million last year.
The company blamed the lower results, which were better than Wall Street had expected, on costs related by the company’s announced merger with Smithfield Foods ($1.6 million) and an ongoing requirement to reduce pollution of wastewater, air and odour emissions from its Missouri pig plants ($7.4 million).
Another contributor was flat sales in the export market, compared to a 55% increase in 2005.
The company said that while it expects pig prices 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.