Pilgrim’s Pride posts large quarterly loss

Source: Exec

Date :06/05/2008 01:48:10

Pilgrim’s Pride Corp., the largest US chicken producer, posted a surprisingly large quarterly loss on Monday due to higher feed costs and a restructuring charge.

The company is negotiating shorter contracts with customers to more quickly pass on the expenses. Shares of the company fell as it warned of a possible loss in the current quarter as well.

Pilgrim’s Chief Executive, Clint Rivers, said in a statement, “Our financial results in the second quarter of fiscal 2008 reflect the crisis facing our company and industry from record-high feed costs caused by the federal government’s deeply flawed ethanol policy.”

Feed costs

The meat industry has blamed US tariffs and credits to promote production of the biofuel ethanol, for pushing up corn and soybean meal prices this year.

Pilgrim’s feed costs for the second quarter rose $200 million from a year earlier and are estimated to be up more than $800 million for the fiscal year, the company said.

Mr. Rivers added, “While we continue to pass along price increases to our customers, the simple fact is that to date, we have not been able to raise prices fast enough to match the extreme price volatility in the grain markets.”

The Pittsburg, Texas, company reported a loss of $111.45 million, or $1.67 per share for the second quarter ended March 29, compared with a year earlier loss of $40.08 million, or 60 cents per share.

To stem losses the company has cut production and closed facilities.

May 6, 2008