SEABOARD : DE/ Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-K)
Sales and costs of Seaboard's segments are significantly influenced by worldwide
fluctuations in commodity prices and changes in foreign political and economic
conditions. Accordingly, sales, operating income and cash flows can fluctuate
significantly from year to year. As each segment operates in a distinct industry
and a different geographic location, management evaluates their operations
separately. Seaboard's reporting segments are based on information used by
Seaboard's CEO to determine allocation of resources and assess performance, in
his capacity as chief operating decision maker.
Seaboard's operations have been both directly and indirectly impacted by the
COVID-19 pandemic. At the onset of the pandemic in March and April of 2020,
Seaboard experienced a change in product mix, including a significant decline in
volume and prices for food service business due to restaurant closings, less
demand for transportation due to customers temporarily shut down due to
government orders and capital market volatility. Seaboard saw improvement in its
third and fourth quarter 2020 results though challenges remain. Seaboard
continues to encounter partially staffed shifts, lock downs or curfews in some
geographic regions and the impacts from commodity market volatility. The near
and long-term impacts of COVID-19 on Seaboard's operations and the global
economy are unknown and impossible to predict with any level of certainty.
The Pork segment primarily produces hogs to process and sells fresh and frozen
pork products throughout the U.S. and to foreign markets. Sales prices are
directly affected by both domestic and worldwide supply and demand for pork
products and other proteins. Feed accounts for the largest input cost in raising
hogs and is materially affected by price changes for corn and soybean meal.
Market prices for hogs purchased from third parties for processing at the plant
also represent a major cost factor. Within the portfolio of Seaboard's
businesses, management believes profitability of the Pork segment is most
susceptible to commodity price fluctuations. As a result, this segment's
operating income and cash flows can materially fluctuate from year to year,
significantly affecting Seaboard's consolidated operating income and cash flows.
This segment is Seaboard's most capital-intensive segment, representing
approximately 58% of Seaboard's total fixed assets, in addition to approximately
48% of total inventories, as of December 31, 2020. With the plant generally
operating at capacity, Seaboard is continually looking for ways to enhance the
plant's operational efficiency, while also looking to increase margins by
introducing new, higher value products. This segment also produces biodiesel for
sale to third parties. Sales prices are affected by the supply and demand of
diesel and environmental credit initiatives.
CT&M Segment ...
Marine Segment ...
Sugar and Alcohol Segment ...
Power Segment ...
Turkey Segment ...
LIQUIDITY AND CAPITAL RESOURCES ...
RESULTS OF OPERATIONS ...
CRITICAL ACCOUNTING ESTIMATES ...
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