Pilgrim's Pride Exits Turkey Business

Poultry News
Pilgrim's Pride exits turkey business
By Ann Bagel Storck on 3/11/2008 for Meatingplace.com

Pittsburg, Texas-based chicken company Pilgrim's Pride Corp. on Monday announced the sale of its turkey production facility and distribution center in New Oxford, Pa., to New Oxford Foods LLC, a subsidiary of Hain Pure Protein Corp., Melville, N.Y.

Financial terms were not disclosed, and there was no material gain or loss as a result of this transaction, Pilgrim's Pride said.

As a result of the sale, which is effective immediately, Pilgrim's Pride is no longer a producer of turkey, a business it entered in 2001 with the purchase of WLR Foods Inc.

Pilgrim's Pride reported total U.S. turkey sales of $122.3 million for fiscal 2007. The New Oxford facility processes 175,000 turkeys per week and employs approximately 530 workers, including the distribution center.

"Despite the positive improvements made in our turkey business over the past few years, we found that our small size and scale in this segment made it difficult to achieve acceptable levels of profitability on a consistent basis," said Clint Rivers, Pilgrim's Pride's president and CEO.

Rivers said the sale of the New Oxford complex is not expected to have any significant short-term impact on Pilgrim's Pride's current turkey customers. As part of the sale agreement, New Oxford Foods will continue to co-pack product for Pilgrim's Pride through the end of September, and Pilgrim's Pride will work closely with customers to avoid unexpected interruptions in delivery of frozen turkeys through Thanksgiving.

Shares of Pilgrim's Pride closed Monday at $22.42, down 79 cents, on the New York Stock Exchange.