Pilgrim's Pride to close N.C. facility
No. 1 poultry processor blames ethanol push for driving up feed cost
CHOY LENG YEONG
Pilgrim's Pride Corp., the world's biggest poultry processor, will close an N.C. chicken-processing plant and six distribution centers and cut 1,100 jobs, blaming U.S. ethanol policies for pushing the industry into "crisis."
The company is considering closing other production facilities, citing oversupply and a "crisis facing the U.S. chicken industry" because of rising feed costs. Costs have surged along with the price of corn, which reached a record $5.795 a bushel Tuesday in Chicago. U.S. mandates promoting ethanol use led to record demand for fuel derived from crops.
"Our company and industry are struggling to cope with unprecedented increases in feed-ingredient costs this year due largely to the U.S. government's ill-advised policy of providing generous federal subsidies to corn-based ethanol blenders," chief executive Clint Rivers said in the statement.
"Based on current commodity futures markets, our company's total costs for corn and soybean meal to feed our flocks in fiscal 2008 would be more than $1.3 billion higher than what they were two years ago," Rivers said.
The company's plant in Siler City, about 100 miles northeast of Charlotte, employs about 830 people. Pilgrim's Pride will shut distribution centers in Oskaloosa, Iowa; Plant City and Pompano Beach, Fla.; Jackson, Miss.; Nashville, Tenn; and Cincinnati.
The Siler City facility represents 1.5 percent of the company's processing capacity and 0.4 percent of the industry's, Credit Suisse analysts led by Robert Moskow said in a note Wednesday. "While the move won't do much to choke chicken supply, this is a step in the right direction for the industry."
Ethanol subsidy--inducing farmers to plant more corn, then turn that extra food (and often a lot more that the extra)--into fuel for SUVs and monster trucks that get horrifically bad mpg ratings, not to mention all the latest vroom-vroom muscle cars for NASCAR idiots has devastating consequences। Huge layoffs of workers barely on the bottom rung of the economic ladder, devastation of one-company towns, higher food prices।. And, of course, the financial sector sees throwing thousand of workers out of jobs as a "step in the right direction".
Anything, absolutely anything, aimed at keeping the cars and trucks running in "happy motoring" mode, will be seen as salvation of the American way of life. This is sick and twisted.