BMO Capital Markets 2014 Farm to Market Conference New York, New York. May 21, 2014

Transcription

1 0 BMO Capital Markets 2014 Farm to Market Conference New York, New York May 21, 2014

2 1 Forward Looking Statement Warning This presentation contains forward-looking statements about the business, financial condition and prospects of the Company. The actual performance of the Company could differ materially from that indicated by the forward-looking statements because of various risks and uncertainties. These risks and uncertainties are described in our most recent Annual Report on Form 10-K.

3 The Company 2

4 3 We Are a Leading Chicken Producer Organized in 1947 Incorporated in 1955 Who We Are Vertically integrated in 1961 Initial public offering in rd largest poultry processor in the U.S. Current processing capacity of 9.375MM head/week

5 4 Top 10 Poultry Companies for 2013 All Other 40.6% Tyson 21.3% Source: WATT PoultryUSA Survey, March 2014 Pilgrim's 17.5% Koch 6.1% Perdue 7.1% Sanderson 7.4% Processing Further Processing Million Million Lbs Average Million Lbs % R-T-C Company Plants Operations Head Live Weight Live Weight R-T-C Market Share Tyson Foods, Inc. 33 9/ % Pilgrim's Corporation 25 0/ % Sanderson Farms, Inc. 9 0/ % Perdue Farms Incorporated 12 3/ % Koch Foods, Inc. 8 4/ % Wayne Farms, LLC 9 0/ % Mountaire Farms, Inc % Peco Foods, Inc. 5 1/ % House of Raeford Farms, Inc. 5 2/ % Foster Farms 5 5/ % Total Top / % All Others 40 23/ % Total / %

6 5 Balanced Asset Base Poultry Plants Big Bird Deboning Full Capacity Live Pounds Processed Pounds Per Week (1) Per Week (2) Per Week (3) Hazlehurst, MS ,000 5,468,750 4,922,000 Kinston, NC Laurel, MS ,000 5,468,750 4,922,000 Hammond, LA ,000 5,468,750 4,922,000 Collins, MS ,250,000 10,937,500 9,843,750 Waco, TX ,250,000 10,937,500 9,843,750 Waco, TX McComb, MS Jackson, MS Hazlehurst, MS Palestine, TX 2015(4) 1,250,000 10,937,500 9,843,750 Retail Total 5,625,000 49,218,750 44,297,250 McComb, MS ,250,000 8,437,500 7,256,250 Bryan, TX ,250,000 8,437,500 7,256,250 Moultrie, GA ,250,000 8,437,500 7,256,250 Kinston, NC ,250,000 8,437,500 7,256,250 Total 5,000,000 33,750,000 29,025,000 Expected Capacity 10,625,000 82,968,750 73,322,250 Prepared Chicken Plant Jackson, MS 1986 Note: (1) Capacity measured in head/w eek. (2) Based on target live w eights. (3) Based on historical yields. (4) Under construction. Moultrie, GA Collins, MS Laurel, MS Hammond, LA Bryan, TX Palestine, TX (4) Big Bird Deboning Plants Retail Tray Pack Plants Prepared Chicken Plant

7 6 4,000 3,500 3,000 2,500 2,000 1,500 1, Strong Track Record of Organic Growth % 986 1,077 1,167 1,308 24% 9% 8% 12% Pounds Processed (millions) 2,441 2,426 21% -1% 2,025 1,802 12% 1,530 1,580 14% 1,437 10% 6% 3% 3,670 3,694 3,356 9% 1% 3,166 6% 2,959 3,041 4% 2,805 5% 3% 2,567 9% 6% * 2015* 2016* 2017* * Estimated. 6% production cut was restored during 3 rd Quarter of Assumes Palestine, TX opens January 2015, and reaches full production in March 2016.

8 7 Key Strengths Low Cost Producer As one of the industry s most efficient producers, well positioned to capture share Favorable Product Mix New plant under construction focused on higher margin big bird deboning market Attractive Growth Profile Track record of generating strong internal growth History of delivering above industry average returns Strong Balance Sheet Managed and maintained appropriate capital structure Strong balance sheet enables growth even during industry downturns

9 8 Strong Portfolio of Customers Prepared Foods

10 9 Strong Portfolio of Customers Big Bird Deboning / Foodservice

11 10 Tray Pack / Retail Strong Portfolio of Customers

12 11 Favorable Product Mix Operating Margin / Head (Cents) (1) Shift to Higher Margin Foodservice Market (10) (20) (30) Mix (%) Tray Pack / BBD (2) /43 53/47 55/45 49/51 46/54 46/54 49/51 53/47 53/47 53/47 Source: Agri Stats, Company Filings Small Bird Tray Pack Big Bird Deboning Note: (1) Industry average. Calendar year. (2) March 2014

13 12 Export Destinations (SAFM) Fiscal 2013 Sales Pounds (million) 19.0% of total Gross Sales Dollars $292.6 (million) 10.6% of total Other 18% China 14% Other 16% China 19% Russia 15% Central Asia 26% Russia 14% Central Asia 25% Mexico 27% Mexico 26%

14 US Export Volumes RTC million pounds, paws excluded Country Mexico ,006 1,237 1,404 Russia 1, Angola Canada Cuba China Iraq Taiwan Georgia Guatemala Other 2,287 3,302 3,648 3,365 3,116 Total 6,818 6,762 6,968 7,274 7,364 Source: ERS calculations using data from U.S. Department of Commerce, Bureau of the Census 13

15 Market Overview 14

16 15 Current Market Overview Broiler egg sets declined year over year during 2012; moved higher through 2013 and in to 2014; breeder flock remains constrained Cold storage inventories remain manageable Retail grocery demand remains strong; prices at record levels Casual dining traffic remains weak; jobs, consumer confidence and macro economic conditions are the key; new chicken items on QSR and casual dining menus helped demand last summer High cost of competing protein could help chicken demand Corn and soybean meal prices have moved lower compared to fiscal 2013, but have moved higher since February; 2014 crop is key Export market steady; one eye on Russia

17 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr Pullet Placements Potential Breeder Placements 120% 115% 110% 105% 100% 95% 90% 85% 80% 110% Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 % of Prior Year Broiler Eggs Set 108% 106% 104% 102% 100% 98% 96% 94% 92% 220 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 % of Prior Year Avg. Weekly Broiler Egg Sets 108% 106% 104% 102% 100% 98% % 94% YTD Current Year Prior Year Source: USDA

18 17 Intended Placements: Broiler-Type Pullet Chicks for Hatchery Supply Flocks by Month and Total, Cumulative Potential Placements Month Pullet Chicks Hatched as % of as % of as % of Relative to Current Supply Flocks Months Earlier ,000 1,000 1,000 1,000 Percent Percent Percent 1,000 1,000 1,000 1,000 US Placements Jan 6,557 6,673 6,303 6, ,996 64,111 60,864 60,546 Feb 7,284 7,025 7,156 7, ,283 63,679 60,646 60,850 Mar 7,058 6,753 6,589 6, ,250 63,323 61,094 61,214 Apr 7,044 6,524 6, ,751 63,209 61,342 61,457 May 7,721 7,472 7, ,990 62,941 60,934 61,385 Jun 7,211 6,800 7, ,558 62,547 60,676 61,444 Jul 6,444 6,071 6, ,656 61,927 60,591 61,524 Aug 7,233 7,338 7, ,388 61,556 60,370 61,772 Sep 6,657 6,686 6, ,321 60,860 60,054 61,446 Oct 6,289 6,265 6, ,251 60,402 59,843 61,225 Nov 6,890 6,767 7, ,620 60,482 59,994 Dec 6,438 6,668 6, ,028 60,721 60,221 Annual Total 82,826 81,042 81, Source: USDA

19 18 Source: USDA USDA Broiler-Type Eggs Set (in thousands) Week End Week Ending Jan , , , , ,379 Jul , , , ,502 Jan , , , , ,500 Jul , , , ,737 Jan , , , , ,325 Jul , , , ,313 Jan , , , , ,647 Jul , , , ,122 Feb , , , , ,539 Aug , , , ,085 Feb , , , , ,206 Aug , , , ,022 Feb , , , , ,653 Aug , , , ,520 Feb , , , , ,905 Aug , , , ,626 Mar , , , , ,828 Aug , , , ,308 Mar , , , , ,824 Sep , , , ,444 Mar , , , , ,408 Sep , , , ,058 Mar , , , , ,460 Sep , , , ,190 Mar , , , , ,659 Sep , , , ,618 Apr , , , , ,743 Oct , , , ,238 Apr , , , , ,529 Oct , , , ,356 Apr , , , , ,866 Oct , , , ,897 Apr , , , , ,119 Oct , , , ,011 May , , , , ,822 Nov , , , ,924 May , , , , ,274 Nov , , , ,479 May , , , ,696 Nov , , , ,392 May , , , ,847 Last 6 weeks Nov , , , ,299 May , , , , vs 2013 Nov , , , ,608 Jun , , , , % Dec , , , ,855 Jun , , , ,524 Dec , , , ,448 Jun , , , ,006 Dec , , , ,094 Jun , , , ,840 Dec , , , ,493 Average 201, , , , ,595

20 19 USDA Young Chickens Slaughtered by Month and Total, Month Head as % of as % of Live Pounds as % of as % of ,000 1,000 1,000 % % 1,000 Avg Wt 1,000 Avg Wt 1,000 Avg Wt % % Jan 707, , , ,131, ,350, ,226, Feb 674, , , ,931, ,839, ,992, Mar 699, , , ,060, ,992, ,113, Apr 683, , ,986, ,252, May 749, , ,370, ,366, Jun 706, , ,135, ,000, Jul 722, , ,166, ,370, Aug 760, , ,419, ,383, Sep 663, , ,899, ,127, Oct 745, , ,435, ,613, Nov 674, , ,011, ,939, Dec 642, , ,801, ,117, Annual 8,428,847 8,503, ,349, ,354, Source: NASS, USDA - Poultry Slaughter Report

21 20 Total Frozen Chicken United States Cold Storage Stocks, (1,000 pounds) 850,000 Total Chicken 800, , , , , ,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: USDA

22 21 160, , , , , , ,000 90,000 Total Frozen Chicken United States Cold Storage Stocks, (1,000 pounds) Breasts & Breast Meat 110, ,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 Wings 80,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 20,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ,000 Leg Quarters 28,000 Whole Chickens 160,000 26, ,000 24, , , , ,000 22,000 20,000 18, ,000 16,000 90,000 14,000 80,000 12,000 70,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: USDA ,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

23 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr Georgia Dock 5 Year Average Source: comtell.com

24 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr UB Boneless Skinless Breast (Approx. 9.1 million pounds/week assuming 23.75% yield*) UB Breast Tenders (Approx. 1.6 million pounds/week assuming 4.25% yield*) Year Average Year Average Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr UB Jumbo Wings (Approx. 3.0 million pounds/week assuming 7.75% yield*) UB Leg Quarters (Approx million pounds/week assuming % yield*) Year Average Year Average Source: comtell.com * Estimated pounds for BBDB plants based on target live weights and historical yields.

25 24 CBOT - CORN Source: CMEgroup.com

26 25 U.S. Corn Supply and Demand 2013/14 estimate 2014/15 forecast Change from 2013/14 Percent Planted area (million acres) Harvested area (million acres) Yield (bushels per acre) Million bushels Beginning stocks 821 1, Production 13,925 13, Imports Total supply 14,781 15, Feed and residual 5,300 5, Food, seed, and industrial 6,435 6, Ethanol 5,050 5, Domestic use 11,735 11, Exports 1,900 1, Total use 13,635 13, Ending stocks 1,146 1, Percent Stocks to use ratio Dollars per bushel Average market price 4.50/ / May 9, 2014

27 26 CBOT SOYBEAN MEAL Source: CMEgroup.com

28 27 U.S. Soybean Supply and Demand 2013/14 estimate 2014/15 forecast Change from 2013/14 Percent Planted area (million acres) Harvested area (million acres) Yield (bushels per acre) Million bushels Beginning stocks Production 3,289 3, Imports Total supply 3,519 3, Crush 1,695 1, Seed and residual Domestic use 1,790 1, Exports 1,600 1, Total use 3,390 3, Ending stocks Percent Stocks to use ratio Dollars per bushel Average market price / May 9, 2014

29 28 Corn/Soy Sensitivity Quantity Purchased Hypothetical Price Change Fiscal 2013 Impact on Cash Ultimate Impact on COGS Corn 87.4 Million Bushels $0.10 / bushel $8.74 million $ / lb processed Soybean M 801,000 Tons $10.00 / ton $8.01 million $ / lb processed Quantity Purchased Q1 Fiscal 2014 Hypothetical Price Change Impact on Cash Ultimate Impact on COGS Corn 21.0 Million Bushels $0.10 / bushel $2.10 million $ / lb processed Soybean M 201,000 Tons $10.00 / ton $2.01 million $ / lb processed

30 Financial Summary 29

31 30 (MM) 3,500 3,000 2,500 2,000 1,500 1, ($/Share) Pounds Sold Strong Track Record of Financial Performance 3,124 2,956 3,038 2,800 2,399 2,463 2,581 2,049 1,809 1,537 1, (1) Operating and Net Margin (2.00) (0.57) (4.00) (2.13) (6.00) (8.00) (5.74) (2) Note: (1) Estimated (2) Through first quarter EPS 25% 20% 15% 10% 5% 0% -5% -10% -15% (2) Gross Profit Operating Income Net Income

32 $180 Capital Expenditures $160 $140 $120 $100 $80 $60 $40 $20 $ * 2015* Maintenance Waco Complex General Office Foods Collins Expansion Georgia Complex Kinston Complex Palestine Complex Note: * Estimated 31

33 32