Foster Farms, which took over the shuttered Pilgrim's Pride poultry processing plant in a deal involving $50 million from the state, said on 1 July that it will not extend contracts to all chicken growers who previously sold to Pilgrim's Pride in the region, reports CNBC.

In a statement issued by the California-based company, director of marketing services, Ira Brill, said independent growers had been providing chickens to both the Farmerville plant and another now-shuttered Pilgrim's Pride plant in Clinton, Arkansas.

"As Foster Farms brings the Farmerville plant up to full capacity, it expects to extend contracts to the vast majority of Louisiana growers, but the regrettable fact is that this single plant cannot fully accommodate a grower base that was previously supplying two plants," Brill said.

Brill said the company, which planned to spend about $18 million annually on chickens, would use such factors as cost, the quality of chicken housing and distance from a feed mill and the processing plant in its decision to extend grower contracts.

Grower contracts are subject to regulation by the US Department of Agriculture.

"Foster Farms is committed to premium, locally raised poultry products and is very pleased to begin operations in Louisiana. It has a long-standing history of fairness in working with growers and other business partners," according to the statement.