MERRIAM, KAN. – Seaboard Corp. said in its latest regulatory filing that the company acquired hog inventory and certain hog farms in the central US from The Maschhoffs LLC for $58 million in cash considerations.

The purchase, which began on Sept. 2, allocated $9 million to inventories, $45 million for property, plant and equipment, and $4 million to goodwill. According to the company, the assembled workforce and the benefits of acquiring an existing operation represent goodwill. 

“These additional farms increase the Pork segment’s sow base, resulting in less reliance on third-party hog suppliers,” Seaboard said in the filing. 

On Nov. 1, Seaboard also announced its third fiscal quarter numbers that ended Oct. 1, 2022. 

Operating income for the Pork Segment stood at a $51 million loss for the third quarter. This is down from $52 million in the same period during 2021. Operating income in pork for the first nine months of 2022 was a $23 million loss compared to $242 million last year.

“The decrease for the three-month period 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,” Seaboard said in the filing.

In the third quarter, the pork segment showed net sales of $678 million, a 9.4% increase compared to the same quarter in 2021, which totaled $620 million. 

The company explained that the increase in sales was due to higher sales of biofuel credits and to a lesser extent higher biodiesel and pork product prices. It was partially offset by lower volumes and prices of market hogs and lower volumes of pork products sold.

As an investor in Butterball LLC, Seaboard reported net sales of $552 million in Q3, a 19% increase compared to $464 million during the same period in 2021. 

In its turkey segment for the quarter, the company reported a net profit of $33 million, an improvement from the previous year’s loss of $10 million. Operating income in turkey for the quarter was $65 million compared to a $15 million loss last year.

Seaboard stated that the turkey results were due to product mix and grain-related market-to-market derivate contract gains. This was partially offset by lower turkey product volumes and higher feed costs.

Overall, Seaboard posted a net income of $146 million in the third quarter, equal to $125.74 per share on the common stock, up 55% from $94 million, or $81.50 per share, in the same period a year ago. Net sales were $2.90 billion, up 27% from $2.28 billion in the same period a year ago.

In its latest filing, Seaboard said it invested $367 million in property, plant and equipment in the first nine months of fiscal 2022, of which $223 million was in the pork segment and $128 million was in the marine segment. For the remainder of 2022, Seaboard said management has budgeted capital expenditures totaling $245 million.