Pilgrim's Pride to Idle Chicken Processing Plants
Pilgrim's Pride Corporation plans to idle a chicken processing plant in Clinton, Ark., and a further-processing facility in Bossier City, La. Both moves, which are expected to be completed within 60 days, are part of the company's ongoing effort to operate more efficiently and return to profitability amid high feed costs and an oversupply of chicken on the market.
"Over the past six months, Pilgrim's Pride has taken a number of proactive steps to strengthen our competitive position amid a very difficult operating environment," says Clint Rivers, president and chief executive officer. "These steps include the production cutbacks for the second half of fiscal 2008, the closure of a plant in North Carolina and seven distribution centers, and the consolidation of our tray-pack operations in El Dorado, Ark., to six other case-ready sites. Those changes, when combined with today's announcement, will result in the elimination of nearly 2,300 positions."
When completed, the idling of the Clinton processing plant will result in an approximate 1.25 percent incremental increase in the company's previously announced production cutback heading into the fall. Meanwhile, value-added items currently produced in Bossier City will be shifted to other Pilgrim's Pride further-processing facilities. Pilgrim's Pride plans to keep both plants idle until it believes that industry margins can be sustained at more normalized levels of profitability should these or our other production cutbacks be reversed.
The company attributed today's announcement to the continued imbalance in supply and demand in the U.S. chicken industry, which has led to market prices for breast meat that are unusually weak for the peak summer grilling season. Market pricing for breast meat is currently at $1.33 per pound, well below the prior five-year average for August of approximately $1.63 per pound, and significantly below the average price of more than $1.80 just four years ago.
"Over the past six months, Pilgrim's Pride has taken a number of proactive steps to strengthen our competitive position amid a very difficult operating environment," says Clint Rivers, president and chief executive officer. "These steps include the production cutbacks for the second half of fiscal 2008, the closure of a plant in North Carolina and seven distribution centers, and the consolidation of our tray-pack operations in El Dorado, Ark., to six other case-ready sites. Those changes, when combined with today's announcement, will result in the elimination of nearly 2,300 positions."
When completed, the idling of the Clinton processing plant will result in an approximate 1.25 percent incremental increase in the company's previously announced production cutback heading into the fall. Meanwhile, value-added items currently produced in Bossier City will be shifted to other Pilgrim's Pride further-processing facilities. Pilgrim's Pride plans to keep both plants idle until it believes that industry margins can be sustained at more normalized levels of profitability should these or our other production cutbacks be reversed.
The company attributed today's announcement to the continued imbalance in supply and demand in the U.S. chicken industry, which has led to market prices for breast meat that are unusually weak for the peak summer grilling season. Market pricing for breast meat is currently at $1.33 per pound, well below the prior five-year average for August of approximately $1.63 per pound, and significantly below the average price of more than $1.80 just four years ago.