Pilgrim Reports Mounting Losses
CEO blames high feed prices and ethanol policy.
Compiled by staff
Published: May 6, 2008
Pilgrim's Pride Corp., the largest chicken company in the U.S., reported Monday a loss of $111.4 million for its fiscal 2008 second quarter and a loss of $143.8 million for its last six months. This compares with losses of $40.1 million and $82.9 million for its comparable fiscal 2007 periods.
Pilgrim's Pride chief executive officer and president Clint Rivers sharply blamed the impact of the draw on corn for ethanol production. He said the financials reflected "the crisis facing our company and industry from record-high feed costs caused by the federal government's deeply flawed ethanol policy."
He said the company's total feed costs for fiscal 2008 will be $800 million higher than in fiscal 2007, and he emphasized that while the company is passing through these costs to customers and consumers, "there will be much more to come as food producers fully pass along" the increased feed ingredient costs. Rivers said the company has closed an entire production complex and, despite good demand for chicken, is implementing a 5% production cutback, a practice that is necessary to bring supply down enough to where prices increase sufficiently to cover feed input costs.
"The federal government has helped spark a growing worldwide food crisis by mandating corn-based ethanol production at the expense of affordable food," Rivers said.
Source: Feedstuffs
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Tagged: ethanol, input costs
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