Pilgrim’s Pride sees chicken supplies dropping
The CEO of Pilgrim’s Pride Corp. said that the company does not expect any liquidity problems this year. Bill Lovette said the company's banks are "comfortable" with its strategy and added that JBS SA , the Brazilian meat company that holds two thirds of Pilgrim's Pride, can, if needed, lend up to $100 million that could serve as a "backstop" for the company, reports Market Watch.
Lovette noted that the poultry industry hasn’t been profitable any week this year, due in part to rising feed costs. He said that Pilgrim’s has already purchased all the corn it will need this year.
Analysts say the industry's fortunes won't improve significantly until production starts to fall. While supplies in storage remain high, Lovette noted, the number of eggs set in incubators--a sign of future supplies--has fallen the past several weeks, and by the fourth quarter the numbers could be declining by 4%-6%.