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CHICKEN GROWERS FACING FINANCIAL DIFFICULTY

By Wes Clement/OF THE COMMERCIAL STAFF
Saturday, April 4, 2009 10:50 PM CDT

The December bankruptcy of Texas-based poultry company Pilgrim’s Pride left some Southeast Arkansas farmers with empty chicken houses as their own financial obligations remain.

The company suspended operations at three poultry processing plants in Arkansas, Louisiana and Georgia recently as part of its reorganization affecting nearly 430 chicken farmers.

About 160 contract growers were affected by the closure of the Pilgrim’s Pride El Dorado facility, according to Ray Atkinson, the company’s director of corporate communications.

Eleven growers in Bradley County alone have been left without chickens or a foreseeable contract with another poultry company.

Perry Watkins, a chicken farmer east of Banks, borrowed and invested about $150,000 last year in company-required upgrades when he switched to Pilgrim’s Pride. Watkins now has four empty chicken houses and the accrued debt coupled with existing debt.

“I raised one flock and they pulled it out early,” he said. “They had to know it was coming, so why would they enlist and entice new growers? Why would they be expanding if the market was failing or in bad shape?”

Atkinson said the company understood the predicament caused by the closures.

“We recognize the pain and uncertainty the idling of these plants will have on our employees and growers at these locations, as well as the surrounding communities,” Atkinson said. “It’s a devastating situation, and we sincerely wish that such actions were not necessary.”

Atkinson referred to the situation that led to the closures as “a response to one of the worst markets for chicken in memory.”

Weak consumer demand and an industry-wide over-supply of chickens resulted in Pilgrim’s Pride’s loss of nearly $1 billion last year and an additional $229 million in the first quarter of 2009, Atkinson said.

Other farmers in the area, concentrated somewhat around Bradley County, have also suffered a loss of income at a time when foreclosure was already a looming possibility for some.

“All it did was dig me in deeper,” Watkins said.

In accordance with Pilgrim’s Pride growing facility requirements, the 15-year full-time chicken farmer purchased a “controller/computer” for the houses and an extra feed bin for each house. Watkins said he also purchased additional lighting and had to change the location of some existing lights. The houses’ cooling cells were also upgraded.

He and others have been contacting other “integrators” in the area and have found no demand for growing chickens.

“I’m facing bankruptcy and foreclosure,” Watkins said, “and will have to find a job several hundred thousand dollars in debt.”

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