Seaboard Corporation has released its first quarter 2024 earnings report, highlighting a $43 million decrease in operating loss for the three-month period of 2024 compared to the same period in 2023. The pork production, processing and ocean transportation company says the change primarily came from a $164 million drop in the pork segment operating loss due to higher margins on the sale of pork products and market hogs.
According to the firm’s recent filing with the U.S. Securities and Exchange Commission, Seaboard’s net sales were $2.191 billion, a $308 million decline from the same period in 2023. However, net income was $22 million compared to a net loss of $16 million a year ago.
Seaboard cites lower biodiesel and renewable diesel sales for the decrease in sales, however reduction was partially offset by higher volumes and prices of pork products and market hogs sold which increased sales $31 million and $24 million, respectively.
“The decrease in operating loss primarily reflected $180 million in higher margins on pork products and market hogs sold due to higher sales prices and lower hog production costs, including a decrease in adjustments to the lower of cost and net realizable value inventory reserve of $92 million and lower feed costs of $37 million. An inventory adjustment has been necessary since the third quarter of 2022 to properly state the hog inventory balances at quoted future market 19 prices for pork products and grain costs. With more favorable pork prices and grain commodity costs, the need for the LCNRV adjustment was minimal for the first quarter of 2024.”
While management said it is unable to predict market prices for pork products, biodiesel, renewable diesel or the cost of feed or third-party hogs in the future, based on current conditions the company anticipates the segment to be profitable for the remainder of 2024.
During Q1 2024, Seaboard invested $87 million in the pork segment for renewable biogas recovery projects and other investments. Management has budgeted capital expenditures totaling approximately $424 million for the rest of the year. The pork segment planned expenditures are primarily for biogas recovery projects, normal replacement of breeding herd and other investments. The company plans to continue constructing biogas recovery facilities at some hog farms to capture methane from its lagoons and inject it as renewable natural gas into the local pipeline infrastructure.
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