PITTSBURG, Texas -- Pilgrim's Pride Corp. will reduce weekly chicken processing by 5 percent year over year, or approximately 1.3 million head per week, by January 2007, as part of its continuing effort to better balance supply and demand amid declining chicken prices and sharply higher costs for corn.



The reduction will begin with eggs set as of Oct. 30, 2006, and will take effect with weekly processing beginning Jan. 1, 2007. The company said the reduction will remain in effect until average industry margins return to more normalized levels.



"The U.S. chicken industry is subject to volatility, and there are a number of factors impacting near-term market conditions," said O.B. Goolsby Jr., Pilgrim's Pride president and CEO. "Although industry dynamics improved in the spring and early summer of 2006, market conditions have weakened over the past few months, as evidenced by a decrease in prices for boneless breast meat and leg quarters, as well as a sharp increase over the past two months in the price of corn.

"We believe the reduction announced today will help to strike a better balance between production and demand and strengthen our competitive position. As we have said before, reducing overall supply to better match demand is an important component in helping return the industry to more normalized levels. While the short-term operating environment remains challenging, we are confident that continued demand for high-quality, convenient and low-fat meat proteins will position our cmpany for profitable long-term growth when conditions in the chicken markets improve."



Pilgrim's Pride Corporation is the second-largest chicken producer in the United States and Mexico and the largest chicken producer in Puerto Rico. Pilgrim's Pride employs approximately 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah.



SOURCE: Pilgrim's Pride Corporation via PR Newswire.