US poultry giant Pilgrim’s Pride is facing a “crisis” after seeing its half-year losses almost treble, its president and CEO has warned.
Clint Rivers said “record-high” feed costs had hammered the company, which posted an underlying operating loss of US$144.7m, compared to $48.9m a year earlier.
Rivers pointed the finger at the US government’s “deeply flawed” biofuels programme for pushing up corn prices. According to company figures, the average price for a bushel of corn is 29% more expensive than a year ago.
“While we continue working to pass along price increases to our customers, the simple fact is that, to date, we have not been able to raise prices fast enough to match the extreme price volatility in the grain markets,” Rivers said.
Rivers did not stop there, describing conditions in the poultry sector as “among the most difficult” during his 27 years in the business.
“The federal government has helped spark a growing worldwide food crisis by mandating corn-based ethanol production at the expense of affordable food,” Rivers said. “American consumers are only just beginning to feel the impact of sharply higher food prices. There will be much more to come as food producers fully pass along these higher input costs.”
He added: “The government is using tax dollars to provide generous subsidies to big oil companies for blending ethanol and stiff duties on imported ethanol help protect domestic ethanol producers at the expense of end consumers. As a direct result of these soaring grain costs, a growing number of food companies are shutting down plants and eliminating thousands of jobs in rural America.”
Net sales jumped by a quarter, reaching $4.1bn.