US processor cuts production

30-10-2006 | | |

A major US chicken producer will cut its weekly chicken processing level by 5 percent because of decreasing chicken prices and high feed costs.

Pilgrim’s Pride, the number 2 US chicken producer after Tyson Foods, will cut it’s processing level by around 1.3 millions heads per week by January next year.
The cut begins today with the number of eggs set, with weekly processing cuts beginning immediately in the new year.
The company said the reduction would be maintained until average industry margins return to normal.
Pilgrim’s Pride is just one of the US chicken producers that must choose between reducing supply or watching breast meat prices fall even lower than the seven-year lows being seen at the moment.
Last week, the US Department of Agriculture reported that boneless chicken breasts traded wholesale at $1.19 per pound in Georgia markets. A year ago, they were about $1.34 and seven years ago $1.475.
Corn and soybean meal prices are skyrocketing – and grain is the single most expensive individual cost in producing the birds.
With lower returns and higher costs, producers are unable to maintain production levels.
Earlier this month, the USDA estimated chicken production would be up about 2 percent for the entire year and up 1.5 percent next year.

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