Sanderson Farms CEO told investors Thursday that the chicken processing business in 2011 will face challenges with high feed prices and soft sales to restaurants.

But speaking at the company’s annual meeting in Laurel, Mississippi, Joe Sanderson gave no indication that market conditions would curtail the company’s plans to move ahead with building a new plant in Southern Nash County.

A site at the southeast quadrant of N.C. 97 and Interstate 95 is the top candidate for that new plant.

“Our financial position is strong, and finally, we have demonstrated our confidence in the long-term success of Sanderson Farms with our plans to make a considerable investment in a second new complex in North Carolina,” Sanderson said in the annual meeting, which was broadcast over the Internet.

Plant opponents said the high feed prices are just another reason for Sanderson Farms to rethink its plans.

“The weak poultry market should give us all a reason to push the pause button on the new Sanderson Farms slaughterhouse in Nash County,” said Con Ward, co-chairman of the Nash County Landowners Association in a prepared statement. “It just doesn’t make any sense for Nash County or Sanderson Farms to rush into an ‘economic development project’ when profits are down and studies show that ‘devastating losses’ are possible. Maybe this is the reason why Mr. Sanderson is no longer in a hurry to bring in the bulldozers.”

Kathy Williamson, a Southern Nash resident who recently purchased Sanderson Farms stock to voice her opposition to the project, said shareholders need to have a heart-to-heart with the management team.

“From a business perspective, this site location doesn’t make sense,” she said in the prepared statement. “The management team at Sanderson Farms is doing a disservice to the shareholders by selecting a site that will result in expensive legal expenses and construction delays.”

Wilson resident Linda Matthews was planning to fly to Laurel to express her opposition to the plant being built in Nash County. But an illness prevented her from making the trip, she said Thursday.

Last November, the Nash County Board of Commissioners approved the industrial rezoning of 150 acres of land at Interstate 95 and N.C. 97. Wilson officials have committed $1 million to fighting the plant, saying it could harm their drinking water supply and hinder efforts recruit high-tech industries. The city of Wilson has also joined residents in Southern Nash County and Wilson in filing a lawsuit challenging the zoning process.

Sanderson told shareholders that the chicken processing industry is facing challenges in 2011 but he was optimistic about the future.

“I imagine we in this industry will experience much higher costs for grain input costs during 2011 when compared to 2010, and we already have,” Sanderson said. “Furthermore, until the 2011 crop is made and harvested, markets will react to every weather threat, whether real or perceived.”

While feed grain costs will be much higher this year, the company and industry can still earn positive margins if chicken prices move sufficiently higher, Sanderson said.

“We need either a decline in supply of chickens, or increase in demand, or combination of both,” Sanderson said.

In November and December, the industry was setting between between four and five percent more eggs in incubators than the same months in 2009,’ he said. “Those eggs are now chickens on the market, which is why chicken markets have remained sluggish.”

However over the past few weeks, egg sets have trended lower to about the same levels as 2009, he said.

“I believe challenging market conditions will ultimately cause the industry to produce less chickens, which should move chicken markets higher,” he said.

Fiscal 2010 for Sanderson Farms was highlight by record sales of $1.9 billion dollars, surpassing the previous year’s record by more than 7 percent, Sanderson said.

“Our net income of $134.8 million was also a record,” he said. “Our revenue growth since 1992 reflects the execution of our growth strategy to steadily increase our production capacity. And our net results reflect the quality of our operations as well.”