|View printer-friendly version|
|Pilgrim's Pride to Reduce Weekly Production by 5% in Second Half of Fiscal 2008 in Response to Soaring Feed Costs|
PITTSBURG, Texas, April 14 /PRNewswire-FirstCall/ -- Pilgrim's Pride Corp. (NYSE: PPC) today said it plans to reduce weekly chicken processing by approximately 5% in the second half of fiscal 2008 when compared to the same period a year ago, as part of its continuing effort to better balance supply and demand amid record-high costs for feed ingredients such as corn and soybean meal.
The reduction began with eggs set earlier this month and should take full effect with weekly processing beginning in June. The company said the reduction will remain in effect until average industry margins return to more normalized levels. The 5% reduction includes the impact of the previously announced closing of the Pilgrim's Pride plant in Siler City, NC, which should be completed by June.
"Soaring feed-ingredient costs fueled by the federal government's misguided ethanol policy has created a crisis in our industry, the true effects of which are only just now beginning to be felt by American consumers in the form of higher food prices," said Clint Rivers, president and chief executive officer. "Over the past two weeks, a growing number of smaller chicken producers have announced production cutbacks in an effort to manage these unprecedented increases for corn and soybean meal, which are expected to add billions of dollars of cost to our industry this year. It is clear that chicken producers of all sizes are feeling the tremendous financial strain from these additional grain costs. We have been encouraged by these public announcements, for they indicate that the production cutbacks this time are being shared more broadly across the industry, rather than limited to just the largest processors, as was the case last year. We believe the cuts we are enacting will strike a better balance between production and demand and strengthen our competitive position. As we have said in the past, reducing overall supply to better match demand is an important component in helping return the industry to profitability."
The company also said it is continuing to review its production facilities for potential mix changes, closure and/or consolidation in response to current negative industry fundamentals. Pilgrim's Pride acknowledged that its processing complex in El Dorado, Ark., is among those being reviewed for possible closure. But the company emphasized that no decision has been made at this time.
About Pilgrim's Pride
Pilgrim's Pride Corporation is the largest chicken company in the United States and Puerto Rico and the second-largest in Mexico. Pilgrim's Pride employs approximately 54,500 people and operates 37 chicken processing and 12 prepared-foods facilities, with major operations in Texas, Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico as well as other facilities in Arizona, Iowa, Mississippi, Ohio and Utah.
Pilgrim's Pride products are sold to foodservice, retail and frozen entree customers. The Company's primary distribution is through retailers, foodservice distributors and restaurants throughout the United States and Puerto Rico and in the Northern and Central regions of Mexico. For more information, please visit http://www.pilgrimspride.com.
Statements contained in this press release that state the intentions, plans, hopes, beliefs, anticipations, expectations or predictions of the future of Pilgrim's Pride Corporation and its management, including as to the expected benefits and synergies associated with the acquisition of Gold Kist and changes in pricing, demand and market conditions for chicken products and profitability, are forward-looking statements. It is important to note that the actual results could differ materially from those projected in such forward-looking statements. Factors that could cause actual results to differ materially from those projected in such forward-looking statements include: matters affecting the poultry industry generally, including fluctuations in the commodity prices of feed ingredients, chicken and turkey; additional outbreaks of avian influenza or other diseases, either in our own flocks or elsewhere, affecting our ability to conduct our operations and/or demand for our poultry products; contamination of our products, which has previously and can in the future lead to product liability claims and product recalls; exposure to risks related to product liability, product recalls, property damage and injuries to persons, for which insurance coverage is expensive, limited and potentially inadequate; asset impairment and other charges related to facility closures or modifications; management of our cash resources, particularly in light of our substantial leverage; restrictions imposed by, and as a result of, our substantial leverage; changes in laws or regulations affecting our operations or the application thereof; new immigration legislation or increased enforcement efforts in connection with existing immigration legislation that cause our costs of doing business to increase, cause us to change the way in which we do business, or otherwise disrupt our operations; competitive factors and pricing pressures or the loss of one or more of our largest customers; inability to consummate, or effectively integrate, any acquisition, including integrating our recent acquisition of Gold Kist, or realize the associated cost savings and operating synergies currently anticipated; currency exchange rate fluctuations, trade barriers, exchange controls, expropriation and other risks associated with foreign operations; disruptions in international markets and distribution channels; and the impact of uncertainties of litigation as well as other risks described under "Risk Factors" in our Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission. Pilgrim's Pride Corporation undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.SOURCE Pilgrim's Pride Corporation
Phone: +1 970.506.7801 | Email: email@example.com