Chicken and Pride Corporation Pilgrim

Pilgrim’s Pride Corporation Pilgrim’s employs about 38,500 people with sales of $7. 5 billion in 2011, and has operations in 12 states, Mexico and Puerto Rico. They have the capacity to process about 36 million birds per week resulting in almost 9. 5 billion pounds of live chicken annually. [1] Pilgrim’s Pride products are distributed primarily through foodservice and retail outlets. Pilgrim’s traces its origins to a feed store opened in 1946 in Pittsburg, Texas by Lonnie “Bo” Pilgrim and his older brother, Aubrey. The brothers were known to give away free chicks with the bags of feed they sold, thereby expanding their business.

Bo Pilgrim, wearing traditional Pilgrimdress, with a pet chicken named “Henrietta” under his arm, was featured in Pilgrim’s Pride advertisements. Today, Pilgrim’s Pride is vertically integrated, meaning the company has its own divisions for every process from “egg to table. ” Pilgrim’s Pride is a supplier of Kentucky Fried Chicken and was named its “supplier of the year” in 1997. Other customers include Wal-Mart,Publix and Wendy’s. Pierce Chicken (formerly of ConAgra Foods and Hester Industries) is a division of Pilgrim’s Pride. Pierce Chicken is best known for its brand-name Wing Dings, Wing Zings, and various other prepared food products.

On October 12, 2002, Pilgrim’s Pride recalled 27. 4 million pounds of sliced deli poultry after finding a strain of Listeria monocytogenes in the drain of one of their facilities. It was the largest food recallin the US at the time. The outbreak killed 7 people, sickened 46, and caused 3 miscarriages. [2] [3] [2] In May 2004, Pilgrim’s Pride experienced an outbreak of avian influenza in Hopkins County in northeast Texas; 24,000 breeder hens were destroyed to contain the outbreak. [4] On July 20, 2004, PETA released a video showing cruelty to chickens at a Pilgrim’s Pride plant in West Virginia. 3] The video showed Pilgrim Pride employees kicking, jumping, throwing, and spitting on live chickens. [4] Pilgrim’s Pride held an investigation, fired 11 employees, including managers, and has provided ongoing animal welfare training to its work force after KFC owner Yum Brandsthreatened to cease purchasing from the company following the incident; none of the employees faced any criminal charges. Pilgrim’s is also is a supplier of cattle feed to various ranching operations in East Texas. The supply of cattle feed was criticized because of the alleged use of “inedible” chicken parts being used for protein content.

This is a common practice in the poultry industry known as protein conversion, so as to profit from all parts of the bird. Protein conversion uses techniques to convert inedible parts of the animal, such as keratin in feathers and skin, into digestible protein to be used for livestock and pet food. On December 4, 2006, Pilgrim’s Pride announced the successful acquisition[5] of Gold Kist (formerly the third largest chicken company) for $21. 00 a share. Although there was initial resistance from Gold Kist, the board members of both companies voted unanimously to combine the two companies. On December 17, 2007, Pilgrim’s Pride’s CEO, O.

B. Goolsby, Jr. died after suffering a stroke while on a hunting trip in South Texas with customers. [5] On April 16, 2008, after a yearlong investigation US Immigration and Customs Enforcement raided plants in Batesville, Arkansas, Live Oak, Florida, Chattanooga, Tennessee, Mount Pleasant, Texas, and Moorefield, West Virginia. Officials arrested 311 foreign national employees on suspicion of identity theft. Of these, 91 have been formally charged On September 17, 2009 was announced the purchase of 64% of the shares of Pilgrim’s Pride by JBS USA Holdings, Inc. , a subsidiary of Brazilian multinational JBS S. A. he largest meat processor in the world and the largest by revenue. Currently Jbs owns 75% of the company. As a result, Pilgrim’s Pride closed its corporate offices in Texas and Georgia and moved its headquarters to Greeley, Colorado. [7] About 160 of the cuts occurred at the headquarters in Pittsburg, Texas and at a location in nearby Mt. Pleasant, Texas. Other positions losing jobs included sites in Atlanta, Dallas, and Broadway, Virginia The chicken producer has been saddled by the debt from its $1. 3 billion acquisition of rival Gold Kist Inc. in 2007 — what analysts cite as the primary cause of its large debt load.

Pilgrim’s Pride’s financial problems have been known for months, since it said in late September it would post a “significant loss” in the fourth quarter, citing woes from hedging of feed inputs like corn. It has had to extend its temporary credit line three times since September — most recently as last week. Its third extension was set to expire Monday afternoon. Last month, in accordance with rules set by its lenders, the company hired a chief restructuring officer, and has maintained since its credit issues surfaced in September that it wanted to avoid filing for bankruptcy.

After the market closed Friday, the poultry producer said in a filing with the Securities and Exchange Commission that it would delay filing its 2008 annual financial report, which had been due Nov. 26. It expects to post a loss of $802 million, or $10. 83 per share, on sales of $2. 17 billion for the fourth quarter, which ended Sept. 27. Those results include a non-cash charge of $501. 4 million, or $6. 77 a share due to the impairment of goodwill related to its acquisition of Gold Kist, and an income tax valuation allowance of $35 million, or 47 cents a share, against net operating losses.

The nation’s meat makers, especially Pilgrim’s Pride, are hurting as their profits shrink in the wake of high commodity prices for key inputs like corn and oil. Those prices are moderating after reaching record highs this summer, but they are still high for producers. Further hurting the industry is a drop in demand in foodservice, since cash-strapped consumers are cutting back on their restaurant spending, and an oversupply of meat on the market. Both of those factors are keeping prices down and making it more difficult for meat makers to recoup their high input costs.