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Chicken industry may face $8 corn: Pilgrim CEO

May 16, 2008
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According to Reuters, the U.S. chicken industry, which has been cutting production in reaction to higher feed costs, may have to contend with even higher feed prices this year, Pilgrim''s Pride Corp Chief Executive Clint Rivers said during a recent webcast presentation.

Pilgrim''s Pride is the largest U.S. chicken producer and recently announced it was cutting production about five percent, largely in reaction to higher feed costs.

The price of corn, an important livestock and poultry feed, hit a record $6 per bushel this year, due to strong demand from exporters, livestock feeders and makers of the biofuel ethanol.

Livestock producers have been worried that corn prices could go even higher if there is any disruption to this year''s U.S. corn crop.

To cope with higher feed costs, Rivers said he would like to see a three to four percent reduction in U.S. chicken production.

Recently, the industry has reduced by two to three percent the number of eggs and young chicks placed in the production cycle, but it will be early this summer before that reduced supply reaches grocery stores.

To more quickly pass on higher costs to consumers, Pilgrim''s Pride recently shortened the duration of fixed-price contracts with grocery stores, restaurants and other customers to as little as 90 days from a year.

Earlier at the BMO conference, Tyson Foods Inc. Chief Executive Richard Bond said that, because of production cutbacks and higher feed costs, there will be less, but more expensive, chicken on store shelves this summer.

Tyson is the largest U.S. meat company, producing beef, pork, and chicken.
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