Pilgrim’s Pride Corp., the second-biggest U.S. poultry producer, last week reported better than expected quarterly profit and reiterated plans to open idled plants and boost production over the next two years, saying it’s optimistic on chicken prices and demand.
Restaurant business is improving, and the prospect for increasingly pricey beef and pork next year means many consumers will be seeking cheaper alternatives at the supermarket meat case, Pilgrim’s Pride executives said during a conference call after the company released results.
“Given the reduction in beef supply and the higher prices that are expected for beef and pork, chicken should be attractively positioned with consumers who are looking for the best value,” Pilgrim’s Pride chief executive officer Don Jackson said during the call.
“As a result, many of our customers are planning to feature chicken more prominently on their menus or in their stores next year,” Jackson said. “We are already seeing an increase in foodservice demand for next year.”
Pilgrim’s Pride is “on track” to resume processing at an idled plant in Douglas, Ga., in mid-November, and “continues to target further expansion later in 2011 and 2012,” the company said today, repeating plans it initially announced in May. Adding production from the Douglas plant will boost company-wide output by about 3 percent, Pilgrim’s Pride said.
“We are optimistic about the outlook for chicken heading into 2011,” Jackson said. “While all of us are concerned about higher grain prices and the uncertain economy, there are several encouraging signs heading into next year.”
Nationwide chicken production is already expanding this year, and the outlook for additional supply may be onerous for the nation’s beef and pork producers, who’ve seen their margins shrink as corn prices rallied to two-year highs above $5 a bushel in recent weeks.
With retail bacon prices at record highs and steaks and pork chops also up from last year, many consumers may opt for cheaper chicken breasts and legs, analysts say. Still, chicken supplies won’t be as abundant as they were a few years ago, said Steve Share, an analyst with Wisco Research LLC in Madison, Wis.