Tracking the drought in the filings…

August 13, 2012

For the past few months, we’ve been hearing increasingly dire stories about the drought that’s impacting large swaths of the U.S. This Reuters story, which talks about rising food prices, provides a good summary. With last week’s big filing crunch, we saw a number of companies mention the drought in their routine filings. Here’s a few snips:

  • Just this morning, Sysco (SYY), in its earnings release, said this about the drought: “Additionally, certain agricultural areas of the United States experienced severe drought in the summer of 2012, and we may experience increased input costs for a large portion of the products we sell for up to a one year period as a result.
  • Red Robin Gourmet Burgers (RRGB) said “continued drought conditions throughout a large portion of the United States, continue to increase commodity prices, which we believe will have a moderate negative effect on our costs of sales for the remainder of this fiscal year and next year.
  • During a conference call last week, Modine Manufacturing (MOD) executives said that “The domestic construction market has continued to be stable, but current drought conditions have added uncertainty to the outlook for the agricultural equipment market.
  • In a presentation as part of its earnings, Wendy’s International (WEN) devoted a slide to the drought, discussing both the short-term and long-term impact. In the short-term, the drought sends cattle to market sooner, which helps pricing. In the long-term, Wendy’s expects this to impact beef supply due to the thinning of herds.
  • In a twist, Westway Group (WWAY) said that the drought was actually helping its sales in the 10-Q it filed last week: “Increased customer demand and the associated growth in our sales volume have benefited from the record drought conditions as normally higher priced competing dry feed commodities have become even more expensive.”

We’ll continue to keep an eye on these disclosures as they come in.

Image source: Drought-stricken corn field via Shutterstock

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