Original article written by Susan Kelly
Seaboard Corp.’s pork segment acquired hog inventory and a hog farm operation in the central U.S. from The Maschhoffs LLC for a total cash consideration of $58 million, Seaboard disclosed Tuesday in a regulatory filing.
The added operation increases the pork segment’s sow base, resulting in less reliance on third-party hog suppliers, Seaboard said in the filing.
The preliminary purchase price allocation for the Sept. 2 acquisition was $9 million to inventories, $45 million to property, plant and equipment and $4 million to goodwill, the company said. Goodwill represents the assembled workforce and the benefits of acquiring an existing operation.
For the third quarter, Seaboard reported an operating loss in its pork segment of $51 million, compared to operating income of $52 million in the year-ago period. The decrease primarily reflected lower margins on pork product and market hog sales due to higher costs of hogs, including an inventory adjustment, and higher feed and plant processing costs, the company said.
Third-quarter net sales in the pork segment increased to $678 million from $620 million a year ago, due to higher sales of biofuel credits, and to a lesser extent, higher biodiesel and pork product prices, partially offset by lower volumes and prices of market hogs and lower volumes for pork products sold. Pork product sales fell to $500 million from $527 million.
For its investment in turkey processor Butterball, Seaboard reported third-quarter net sales of $552 million, up from $464 million a year ago. Operating income rose to $65 million from a year-ago loss of $15 million, while net earnings increased to $63 million from a loss of $18 million.
Original article published on MeatingPlace.com on November 3, 2022