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Feed costs, weak markets prompt Pilgrim's Pride bankruptcy filing

Agriculture.com Staff 12/02/2008 @ 7:43am

A giant in the U.S. chicken processing and production industry has filed for Chapter 11 bankruptcy.

Officials with Pilgrim's Pride Corporation announced Monday the company's intentions to file voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the Northern District of Texas. Operations are expected to continue "as normal" throughout the bankruptcy and reorganization process.

The filing is a result of a combination of factors, company officials say, but feed costs and a weak chicken marketplace are the main drivers, says Pilgrim's Pride CEO and president Clint Rivers.

"Over the past year, Pilgrim's Pride has faced a number of significant challenges including high feed-ingredient costs, an oversupply of chicken, weak market pricing and softening demand," Rivers says.

"After careful consideration of all available alternatives, the Company's Board of Directors determined that a Chapter 11 filing was a necessary and prudent step and the best way to obtain the financing necessary to maintain regular operations and allow for a successful restructuring," he adds.

During the Chapter 11 reorganization process, company officials say that suppliers "should expect to be paid for post-petition purchases of goods and services in the ordinary course of business."

A giant in the U.S. chicken processing and production industry has filed for Chapter 11 bankruptcy.

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