For the year, Seaboard’s pork segment brought in net sales of $2.605 billion, an increase of $124 million from 2021. The corporation noted, though, that the higher sales were “primarily the result of higher biodiesel prices and increased sales of biofuel credits, and to a lesser extent … higher prices of pork products sold.” Seaboard also noted net sales were “largest offset by a decrease in volumes of pork products sold and lower volumes and prices of market hogs sold.”
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Operating income for Seaboard’s pork segment was down $323 million from 2021 (with a loss of $96 million) due to “lower margins on pork product and market hog sales due to higher costs of hogs, including inventory adjustments, and higher feed and plant processing costs.”
Seaboard added that although it is “unable to predict market prices for pork products or biodiesel or the costs of feed or third-party hogs for future periods,” it “anticipates this segment will not be profitable in 2023.”
Labor, confinement regulations
Seaboard’s report also included wider-ranging analyses of its pork business.
Recruitment and retention, the company stated, “can be a challenge for certain locations.” Last year, Seaboard’s retention in its pork segment was 75%, with 25% dependent upon employment visas.
Additionally, Seaboard assessed the ongoing matter of gestation stalls and the disputed regulations in California and Massachusetts. Approximately 5% of Seaboard’s 2022 sales were for those states, and the company thinks that confinement laws could have far-reaching impacts on pork markets.
“Incrementally, strict growing standards could cause the creation of regional markets of compliant products or require the industry to build compliant assets for each market,” Seaboard stated.