Pilgrim's Pride to idle three chicken plants

by Eric Schroeder
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PITTSBURG, TEXAS — Pilgrim’s Pride Corp. today said it will shut down operations at 3 of its 32 chicken processing plants, a move that will eliminate approximately 3,000 people, or 7% of its workforce. The facilities are located at Douglas, Ga.; El Dorado, Ark.; and Farmerville, La.

The closings, which are expected to occur by mid-May, are intended to improve the company’s product mix by reducing commodity production and to significantly reduce costs. Pilgrim’s Pride said the closings will reduce the company’s chicken production by approximately 10%, and are designed to save the company $110 million a year as part of an ongoing restructuring.

The company expects the closings to cost $35 million, not including asset write-downs it may take in the second quarter.

"The idling of these three plants is a painful reflection of the unprecedented challenges facing our company and our industry from an excess supply of chicken and weakening consumer demand resulting from a crippled economy," said Don Jackson, president and chief executive officer. "Simply put, we are producing too much commodity chicken in what is a very weak market. The actions announced today will reduce our production of low-value, commodity meat that is a financial drain on the company without affecting any of our core business lines or customers."

The company also said it would combine its protein salad production operation in Franconia, Pa., with its Moorefield, W. Va., facility.

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