PITTSBURG, TEXAS — Pilgrim’s Pride Corp. sustained a loss of $111,448,000 in the second quarter ended March 29, which compared with a loss of $40,077,000 during the same quarter a year ago.
"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," said Clint Rivers, president and chief executive officer.
Sales for the quarter were $2,100,794,000, up from $1,987,185,000 during the previous year. The results included an asset impairment charge of $17.7 million related to the closing of one processing facility and six distribution centers.
"The operating environment for chicken producers today is among the most difficult I have seen during my 27 years in the business," Mr. Rivers said. "The federal government has helped spark a growing worldwide food crisis by mandating corn-based ethanol production at the expense of affordable food. American consumers are only just beginning to feel the impact of sharply higher food prices."
For the first six months of fiscal 2008, Pilgrim’s Pride suffered a loss of $143,777,000, which compared with a loss of $48,812,000 during the same period during fiscal 2007. Sales for the period were $4,148,147,000 during fiscal 2008 compared with $3,279,142,000 for the first six months of 2007.
"While consumer demand for chicken remains strong, we believe that production cuts are necessary to bring supply into better balance with demand at appropriate selling prices to cover input costs," Mr. Rivers said. "Indeed, industry data for the last full week in April show that egg sets declined 2.4% year over year, the fifth consecutive weekly decline. In addition, market pricing for breast meat has begun a much-needed rise, though we believe that little, if any, of this increase is attributable to the recent production cutbacks.
"While we are encouraged by these positive trends, we believe that high grain costs will continue to exert pressure on our operating results during the second half of fiscal 2008. Accordingly, we continue to evaluate our production facilities for potential mix changes, closure, sale and/or consolidation in an effort to position the company for a return to profitability."