Pilgrim's Pride Shuts Down Several Chicken Facilities

Pilgrim's Pride shuts down several chicken facilities as part of a plan to curtail losses amid record-high costs for corn, soybean meal and other feed ingredients and an oversupply of chicken in the United States. The closings, which are expected to be completed by June 2008, will result in the elimination of approximately 1,100 jobs. Additionally, the company announced that it is in the process of reviewing other production facilities for potential mix changes, closure and/or consolidation. The company also recently sold its turkey production facility and distribution center in New Oxford, Pa., to New Oxford Foods. As a result of this sale, Pilgrim's Pride is no longer a producer of turkey, which is a business it entered in 2001 with the purchase of WLR Foods Inc. "Our company and industry are struggling to cope with unprecedented increases in feed-ingredient costs this year due largely to the U.S. government's ill-advised policy of providing generous federal subsidies to corn-based ethanol blenders," says Clint Rivers, president and chief executive officer, Pilgrim's Pride Corporation. "The cost burden is already enormous, and it's growing even larger. Based on current commodity futures markets, our company's total costs for corn and soybean meal to feed our flocks in fiscal 2008 would be more than $1.3 billion higher than what they were two years ago. We simply must find ways to pass along these higher costs."