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Seneca Foods Records Lower Earnings, Spending More to Move PL Output

June 1, 2011
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An inaccurate prediction of increasing consumer demand and the impact that had on private label sales was one factor contributing to lower earnings for the fiscal year ending March 31 at Seneca Foods, the private label processor reported in late May.

 

“The price mix decrease was attributed to the private label category as we continued to focus on moving product,” Kraig H. Kaiser, president and chief financial officer of Marion, N.Y.-based Seneca, said in a prepared statement.

 

The company had purchased a large supply of commodities in fiscal 2008 and 2009 to accommodate what it expected would be higher consumer demand in fiscal 2011. But market demand has decreased since those forward purchases, leaving Seneca more goods to sell. The overabundance of product in turn led to increased promotional spending and lower selling prices as the company tried to clear out private label production.

 

As a result, net earnings for fiscal 2011 fell by 63.5 percent to $17.7 million, compared to last year's $48.4 million, the company reported.

 

In the fourth quarter, Seneca saw $253 million in sales, a 9.4 percent decrease from the $279 million in same period the prior fiscal year and the company recorded a net loss of $1.9 million.

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