A long-awaited increase in profitability is paying off for Seaboard Corp. The Merriam, Kans.-based company reports that higher pork prices and lower feed costs have increased Seaboard's pork business operating income by $43.5 million.
Company officials first-quarter, which ended April 3, operating income was $26.4 million, compared with a loss of $17.1 million for the same period on year ago
"The increase was primarily related to higher sales prices and lower feed costs," according to Seaboard’s filled report.
Net sales rose to $317.9 million in the quarter, a $55.1 million jump from the same quarter last year. In addition to an increase in overall pork product prices, Seaboard officials credited high volumes of biodiesel.
Seaboard opened a new biodiesel plant in the first half of 2007. Part of the plant’s profitability relies on federal tax credits that which expire late last year and have yet to be renewed. Officials cautioned that a portion of the facility’s recorded value ($42.5 million as of April 3, 2010) could be deemed impaired, resulting in a charge to future earnings if those tax credits are not renewed by Congress.
Seaboard officials said the company’s pork division plans to spend $14.1 million for upgrades to existing facilities and equipment before the end of the year.