Feed cost spike slams Pilgrim's Pride in third quarter
July 29, 2008
by Keith Nunes
PITTSBURG, TEXAS – Pilgrim’s Pride Corp. experienced a 41% increase in the cost of feed ingredients when compared to the same period during the previous year. The cost spike led the world’s largest poultry processor to record a loss of $52,781,000 for the third quarter of fiscal 2008, ended June 28. During the third quarter of fiscal 2007, Pilgrim’s pride had net income of $63,641,000, equal to 95c per common share.
Sales for the third quarter of 2008 were $2,207,476,000 compared with $2,104,499,000 for the same period during 2007.
"Our financial results in the third quarter of fiscal 2008 reflect the significant headwinds facing our company and industry from high feed costs," said Clint Rivers, president and chief executive officer. "We have worked diligently to pass along price increases to our customers to help offset the impact of record-high corn and soybean meal costs. But, like other producers, we simply have not been able to keep pace with the extreme price volatility in the grain markets."
Total feed-ingredient costs in the quarter climbed $266 million compared to the previous year. Based on the actual costs incurred for the first three quarters of the fiscal year and current commodity futures markets for the remaining quarter, the company's total feed-ingredient costs for fiscal 2008 are estimated to be $900 million higher than the previous year.
For the first nine months of the fiscal year, Pilgrim’s Pride had a loss of $196,558,000 compared with net income of $13,829,000, equal to 22c per common share, for the same period during the previous year. Sales for the period were $6,355,623,000 compared with $5,383,641,000 during the first nine months of fiscal 2007.