Kansas City-based pork producer Premium Standard Farms has reported net sales for the fourth quarter of US$218.1m, down from $249.8m in the fourth quarter of the previous fiscal year.

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The company attributed to the decline to a 17.4% fall in live hog prices and an 11.2% decline in meat prices, which it said were partially offset by favourable hedging gains of $11.3m.


Net income for the fourth quarter fell to $11.8m, or $0.37 per diluted share, from $23.4m, or $0.75 per diluted share, in the corresponding period last year. PSF said net income for the fourth quarter of fiscal 2006 included favourable adjustments arising primarily from changes in estimated benefits from the American Jobs Creation Act and state tax rates, which reduced full-year income tax rate to 31.4% and increased diluted earnings per share by $0.13.


“As we had previously discussed, pork prices have recently been trending downwards to more historical levels,” said Premium Standard’s CEO John Meyer. “During the fourth quarter, we experienced a sharp decline in pork price levels compared to last year, primarily due to higher overall protein production in the USA. However, this decline was partially offset by favourable hog hedging.”


However, Meyer was pleased with the company’s international performance. “Internationally, demand remained strong during the fourth quarter of fiscal 2006 as a result of our superior product offering,” he said. “We continued to show a level of growth that exceeds the healthy industry growth in export sales.”

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For the full fiscal 2006 year, PSF’s net sales fell by $8.1m to $919.5m. Net income for the full fiscal year fell to $53.1m, or $1.70 per diluted share, from $67.7m, or $2.18 per diluted share last year.


The company has also announced the appointment Robert Kopriva as its new board chairman. Kopriva, who has been a director of PSF since December 2005, succeeds Michael J. Zimmerman who is stepping down because of his increased workload in other positions. Zimmermann is to remain a director PSF.


Prior to retirement in June 2005, Kopriva was a senior vice-president of Sara Lee Corporation and CEO-Sara Lee Foods.


“We are pleased that Bob will be expanding his role at the company by becoming Chairman,” Meyer said. “Based on his years of experience in the food industry, we look forward to benefiting from his guidance when implementing our future growth strategies. During the last six months, he has already become an invaluable resource to PSF, which will undoubtedly increase as he takes a more active role with the company.”