Seaboard Corporation has released its first quarter 2023 earnings, reporting a net loss of $16 million and a $13.78 drop in per-share basis. Revenue was $2.499 million compared to $2.709 million for the same time period a year ago.
Net sales for the pork segment fell by $6 million for the three-month period of 2023 compared to the same period in 2022. According to the owner of Seaboard Foods the reduction was "primarily the result of lower sales prices of pork products and market hogs due to declines in commodity market pricing, reducing net sales by $58 million."
The firm credits $54 million in sales from the renewable diesel plant in Hugoton, Kansas that began operations during the third quarter of 2022 for partially offsetting the loss.
Operating income for the pork segment dropped $239 million in the first quarter of 2023 compared to the same period in 2022. The company states the "$215 million in lower margins on pork products and market hogs was due to lower sales prices, higher hog costs primarily due to an increase in feed costs of $74 million and a $53 million non-cash adjustment to record this segment's inventory as of April 1, 2023, at the lower of cost and net realizable value." The adjustment was based several factors, including quoted future market prices for pork products and higher incurred and quoted future grain costs.
Biodiesel and renewable diesel sales also added $23 million in lower operating income due to decreased margins and additional costs related to the operation of the renewable diesel plant.
Unable to predict market prices, but based on current conditions, management anticipates the pork segment will not be profitable for the remainder of 2023. "Income from affiliates increased $10 million primarily due to improved volumes and margins on further-processed pork products, and to a lesser extent, improved margins and volumes on fresh pork products processed from third-party and affiliate hogs."
In first three months of 2023, Seaboard invested $111 million in property, plant and equipment, with $81 million specifically in the pork segment for biogas recovery projects and other investments. For the remainder of 2023, management has budgeted capital expenditures totaling approximately $595 million.