Citing unprecedented increases in feed-ingredient costs and oversupply of chicken, Pilgrim's Pride Corp., Pittsburg, Texas, on March 12 announced it will close its chicken processing complex in Siler City, N.C., plus six of its 13 distribution centers, ultimately resulting in the elimination of approximately 1,100 jobs.
"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," said Clint Rivers, newly named president/CEO. 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.
"While the decision to close a facility is always very difficult, we believe the actions we are announcing today are absolutely necessary to help bring supply and demand into better balance. That portion of the demand for our products that exists solely at pricing levels below the cost of production is no longer a demand that this industry can continue to supply."
The closings are to begin immediately and will be completed by June. The Siler City plant employs approximately 830 people. The distribution centers to close are in Oskaloosa, Iowa; Plant City and Pompano Beach, Fla.; Jackson, Miss.; Nashville, Tenn.; and Cincinnati, Ohio. And company officials say they are reviewing other production facilities for potential mix changes, closure and/or consolidation.
Two days earlier (March 10) Pilgrim's Pride exited the turkey business by selling its turkey production facility and distribution center in New Oxford, Pa., to New Oxford Foods LLC, a subsidiary of Hain Pure Protein Corp. Pilgrims Pride entered the turkey business in 2001 with the purchase of WLR Foods.