US turkey producer files for bankruptcy
One of the largest turkey producers in the US, Zacky Farms, has filed for Chapter 11 bankruptcy as increasing loses from high feed prices take their toll.
The Fresno, California-based producer plans to sell itself to pay off creditors who are owed as much as $100 million. The company has stated however that normal operations and customer service will continue without disruption.
According to court documents the company will be auctioned by mid-January, after the main turkey-selling season of the Thanksgiving and Christmas, during which the company expects to rebuild its cash flow.
The poultry industry has been under severe stress due to historically high corn and soybean meal prices leading to significant operating losses in its turkey and chicken business, the company said.
Starting in April, the company tried to avoid bankruptcy by borrowing $7 million from the Robert D. Zacky and Lillian D. Zacky trust, which owns half of Zacky, court papers show. Family members related to Albert Zacky own the other half.
Two branches of the Zacky family have been negotiating in recent months to buy each other out in both the turkey farming and processing business and a sister company, Integrated Grain & Milling, Keith Cooper, Zacky's chief restructuring officer said court records.
Zacky spends about $1.8 million a week on feed for about 1.9 million turkeys and 600,000 chickens, according to court documents. The two biggest unsecured creditors listed in the bankruptcy petition were Western Milling, of Goshen, California, owed $6.6 million, and Foster Farms LLC, of Livingston, California, owed $1.2 million.
Zacky not only sells whole turkeys and turkey parts, but also processes and sells ground turkey and cooked turkey deli products.
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