Let’s be honest CALM will have huge Q3 EPS and that is why it is moving up today. Who knows this? All egg producers’ cause they look at feed and UB every day … us five people who read this board … and the three other people in the U.S. who are interested in eggs and egg production.
Now maybe the two “analysts” know their $1.27 is off … maybe by a buck!! … And they are getting their clients in today before they upgrade later this week??? Just speculation
Bird numbers are up … but
Shell egg and breaking stock inventory compared to this time last year is down.
Dried egg inventory is down 20% yoy to a very low 14.5m lbs
The USDA demand indicator shows only three down weeks in the last half year … none since early November
Asking prices lower this week but still at very profitable levels
Would have to think it would be devastating to CA egg producers if CA is forced to let generic eggs in … 63% of CA voters said yes on Prop 2 …. we will see how they vote with their pocket books … probably more like 20% actually willing to fork over the extra for the enriched colony eggs …
Egg whites up over $1 on McD expanded breakfast … delightful … lean hogs over $1 … live cattle $1.50 … all protein boats are rising
Organics getting more expensive to produce … grain farmers find it less risky … more profitable to produce non organic corn … making organic feed costs twice regular … plus all the other farmers laugh at them when their fields are all full of weeds
If McD uses egg product to make their sandwiches and ships that egg product into CA after Jan 1, 2015, can they avoid the ethical treatment standards AND gain a competitive advantage to those serving fresh egg breakfasts???
Egg industry positives for this year and beyond:
- Grain prices have been spiking up a bit in February. This should give producers pause when contemplating expansion and should encourage producers to retire late stage less productive hens. Historically higher grain prices have been good for producers … however I fear sub $3 in a year or two.
- CA 2008 Prop 2. Places raising standards on hens which has and will cause CA producers to replace equipment to give hens more space. CA egg prices will likely be up next year relative to rest of the country and supply of CA eggs down. They will also draw cage free and enriched colony eggs from a limited supply outside CA which will make those specialty eggs more valuable not only in CA but across the country.
- Protein availability is lower due in part to lower beef numbers resulting from the 2012 drought. Eggs will help fill that void. Look at what chicken promotions at McD, BK, Wendy’s, TB etc. did for PPC, SAFM and TSN last April … it’s looking like some of these companies are pushing breakfast food because they have lower costs and higher margins than beef burgers. I asked a friend who owns and runs a beef feedlot when beef numbers would get back to 2011 levels? his answer .... NEVER!!
- Exports. Many people around the world are moving into the middle class. Some estimate 300m in china alone, about as many as live in the US. These people will be eating more protein and U.S. is an efficient protein producer. Innovations in packaging and egg products will also boost the ability to export.
We have seen per-capita egg consumption dip a bit since the whole Atkins thing. Per-capita consumption has leveled out at about 248 and now looks to be moving higher.
Been a while since I have been this excited about CALM!! Too bad it is not severely undervalued like the good ole days.
Yes great momentum into Q4 .. Taco Bell is going to start serving breakfast egg burritos ... and McD is going to offer breakfast all day ... eggs helping to fill the protien void left by lower beef numbers.
Good Q .... . But ... was looking for even higher margins ... safm is doing a lot of things right for a long term BULL market in chicken
IF … analysts are predicting 85 cents Q1 profit based in part on a very poor YOY 31 cent loss last Q1 2013 … it would be a mistake … SAFM had some pricing difficulties in that some of their contracts were not set up to capture the fast rising chicken prices of last January … SAFM mentioned in Q2 and Q3 cc’s that this issue had been addressed.
It is worrisome that SAFM had a down day today b4 earnings … and yes maybe they had some energy issues with the southern cold spell … and volumes will be down as they planned … BUT … I think they will beat earnings and maybe quite substantially!!
I guess we will see tomorrow
Revenue $398.5m with generic egg sales at avg. $1.42 / dz and specialty at $1.84 / dz … total dz sold of 257m.
CGS $284.7m with feed costs at 43 cents / dz
Other $9.3 including EB related patronage dividend of about $10m, might be more
I haven’t guessed at EPS for about a year … so my model might be a bit rusty … tried to stay a bit conservative … but the margins seem to be quite huge
BW … you seem to be describing a Chickentopia on the horizon …. I cannot disagree
Was a bit surprised PPC .. I think it was Bill … hinted to even better chicken pricing this summer than last … and we know how great pricing was from April to August last year… Americans are grillers … but there just won’t be enough pork and beef to grill at prices that fit the family budget … couple that with much lower feed costs this year, lower interest expense and ……..
PPC’s margin was about to 7.8% for Q4 and 9.5% for the year.
TSN and PPC have indicated they use feed prices as a component to their customer pricing as in cost plus may make up a certain % of the price. My question then is … for November and December did having feed as a component of pricing help or hurt their margins?
SAFM has indicated they don’t base their customer prices on chicken prices only.
PPC said they were hearing of more producers using fixed pricing anticipating lower feed costs … were they talking about SAFM???
GP for Q4 was only 7.8% … I quite frankly thought they might be closer to 10%.
PPC Moving to a spread biz… ppc wants to grow but decrease volatility
2014 Chicken supply / placements … pork and beef availability could result in relatively strong chicken pricing year
All NOL’s have been used up … PPC is now a taxpayer
Cutout pricing is down about 15% in 2014... But PPC expects much stronger pricing into grilling season due to lower supplies of beef and pork
PPC sees competitors using more fixed pricing given lower feed.
PPC expanding Antibiotic free chicken supply
Expanding in Mexico … added production starting in 2015
What’s the plan for cash after this and next year’s good profits … answer: increase Shareholder value with dividends … shareholder buy back and … refinance debt to lower interest paid
PPC has hired a Smithfield sales / marketer with mandate to help build out brand / value added product and grow further processed chicken biz.
Do not plan to sell idle capacity … a defensive hold.
Normalized target margin … 6-8% IBITDA has been have been historic targets … going forward PPC expects the upper maybe over that margin maybe 6-9% IBITDA margin.
Industry is mature in U.S. … future growth will come outside U.S.
holding might be the right choice here at $16.22 … IMO … lower revenue not a concern … there was one less week this Q yoy
PPC just reported a 9.5% margin … TSN reported 9.5% margin on their domestic operations … chicken prices have gone down a bit in January … but SAFM shouldn’t have much of the old corn working into CGS this Q … if SAFM can hit 9.5% also … they should make about $1.50 … I think they will do better.
Have you noticed how low dried egg inventory has gotten ... a good harbinger for futue egg prices .. egg whites in particular are short