Pilgrim's Pride to Reduce Weekly Chicken Processing by 5% Year-Over-Year by January 2007

US - Pilgrim's Pride Corp. yesterday said it will reduce weekly chicken processing by 5% year over year, or approximately 1.3 million head per week, by January 2007 as part of its continuing effort to better balance supply and demand amid declining chicken prices and sharply higher costs for corn.
calendar icon 30 October 2006
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The reduction will begin with eggs set as of October 30, 2006, and will take effect with weekly processing beginning January 1, 2007. The Company said it intends that the reduction will remain in effect until average industry margins return to more normalized levels.

"The U.S. chicken industry is subject to volatility and there are a number of factors impacting near-term market conditions. Although industry dynamics improved in the spring and early summer of 2006, market conditions have weakened over the past few months, as evidenced by a decrease in prices for boneless breast meat and leg quarters, as well as a sharp increase over the past two months in the price of corn," said O.B. Goolsby Jr., Pilgrim's Pride president and chief executive officer.

"We believe the reduction announced today will help to strike a better balance between production and demand and strengthen our competitive position. As we have said before, reducing overall supply to better match demand is an important component in helping return the industry to more normalized levels.

While the short-term operating environment remains challenging, we are confident that continued demand for high-quality, convenient and low-fat meat proteins will position our Company for profitable long-term growth when conditions in the chicken markets improve," added Mr. Goolsby.

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