Sanderson Farms project still delayed

It's still quiet along U.S. 70 in Kinston, where Sanderson Farms plans to build a $126.5 million poultry processing plant.

Sanderson Farms Director of Development and Engineering Bob Billingsley said Tuesday the company's construction plans for the site are still on hold.

"We are still waiting for market conditions to improve," Billingsley said. "All of our engineering for the site is complete."

In April, Sanderson declared plans to build a new poultry processing plant in Kinston. By August 2009, Sanderson planned to launch an operation employing nearly 1,600 people.

But in June, the company announced that spiking feed grain prices - a big chunk of Sanderson's operating costs - would force it to delay construction.

Billingsley said Tuesday corn prices per bushel are now at about $5, down from $7 per bushel in June.

"Sanderson Farms is coming," Mark Pope, Lenoir County's economic development director, said in August of the country's fourth-largest poultry processing company.

Preparations continue, however. Sanderson purchased two parcels of land equaling around 700 total acres July 31 for $5 million from landowners Rodney Goodman and Dempsey Hodges. The tracts, off U.S. 70, are to be sites for the new poultry processing plant and an environmental spray field.

Lenoir County also finalized land deals at Smithfield Way worth $1.9 million during July.

The land was owned by the Parrott and Perry families. Sanderson Farms intends to build a hatchery and feed mill on 110 acres.

Billingsley and Pope were in Raleigh on Tuesday to finalize the land deals, which were approved by the N.C. Council of State.

On Feb. 28, Sanderson Farms met with 700 local poultry farmers at Lenoir Community College to discuss preliminary contract terms. Sanderson will build 404 broiler houses, 48 breeder houses and 24 pullet houses near the complex and will maintain 130 contractual relationships with local farmers within a 30-mile radius of the poultry complex to house and care for the chickens.

Each farmer will be required to sign a 15-year term contract with Sanderson, provide the land and invest in the necessary buildings and equipment to house and grow chickens to Sanderson's specifications. Each chicken farm will be about 50 acres.

Once Sanderson Farms completes its construction, the company will operate a feed mill facility on a 98-acre site adjacent to and north of the Dopaco Inc. site in the 70 West Industrial Park near Parrott Dickerson Road.

A spray field will be located on a 551-acre site on the right hand side of Pruitt Road on the Goodman property and a processing plant will be located on a 164-acre site off U.S. 70 across from West Pharmaceutical Company. A hatchery will also be located at a 12-acre site at corner of Smithfield Way and Hill Farm Road in the 70 West Industrial Park.

On Aug. 26, Sanderson Farms released its third quarter 2008 fiscal report, which showed net sales of $466.9 million as compared to $394.8 million during the same period in 2007. For the quarter, the company reported a net loss of $3.6 million.

"Our results for the third quarter of fiscal 2008 reflect difficult market conditions for our industry," Sanderson Farms CEO Joe Sanderson Jr. said in a press release. "While retail and export demand for chicken remained relatively strong during the quarter, casual dining and food service customers have been affected by a significant decline in restaurant traffic due to weak economic conditions and higher fuel prices."

The company continues to ramp up production at its Waco, Texas poultry plant.

"In spite of challenging market conditions, we are pleased with the progress made toward moving to full production at our newest facility in Waco, Texas," Sanderson Jr. said. "While everything will be in place to move to full production at the new plant (Waco) by October, the plant will operate at (about) 90 percent capacity until market conditions warrant moving to full production."

Chris Lavender can be released at (252) 559-1078 or clavender@freedomenc.com.