That ain’t chicken feed: High grain costs bite poultry giant — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

That ain’t chicken feed: High grain costs bite poultry giant

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in Office Communication,Workplace Communication

Pilgrim’s Pride Corp.—based in Pittsburg, Texas, and one of the nation’s largest poultry growers—will close a plant and six distribution centers because of rising feed costs.

Blame it on the growth of alternative fuels—and farmers’ realization that they can get higher grain prices from fuel producers than they can from chicken processors.

According to Ray Atkinson, Pilgrim’s Pride’s director of corporate communications, the closures will force the company to cut some 1,100 jobs. It will shutter a North Carolina processing plant and distribution centers in Florida, Iowa, Mississippi, Ohio and Tennessee.

Atkinson said the closings and job losses are the result of federal policies that make it more profitable for farmers to sell crops for distilling into ethanol than for grinding into chicken feed. Atkinson said federal subsidies have raised the price of corn by 115% in the past two years.

In addition, more farmers are planting subsidized corn instead of soybeans, which Pilgrim’s Pride also uses as feed. That means soy costs have gone up, too.

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