Higher Costs Forcing Changes at Pilgrim's Pride

Last Updated Apr 12, 2008 3:49 PM EDT

Pilgrim's Pride, the country's largest chicken processor, has named Robert A. Wright, its sales and marketing chief, as its new chief operating officer and announced that it will reorganize its management structure so that each of its four division vice presidents will report to Wright.

Wright is replacing J. Clinton Rivers, who ascended to the CEO's office this month, three months after CEO O.B. Goolsby Jr. died of a stroke.

The moves come during a turbulent period for the beleaguered company, but they likely won't do much to help. Feed prices are surging for reasons including the falling dollar, higher fuel costs, poor weather worldwide and the government-assisted shift of corn crops into ethanol production.

In response, Pilgrim's Pride earlier this month announced it would close seven plants and lay off 1,100 workers.

Dealing as it is with forces largely outside its control, Pilgrim's Pride was left with blaming the government for its ills. According to a statement issued by Rivers in the wake of the plant closings, rising costs are "due largely to the U.S. government's ill-advised policy of providing generous federal subsidies to corn-based ethanol blenders."

True enough, but that's just one factor. He left out the others.

Joel Newman, president and CEO the American Feed Industry Association, this week acknowledged that there is a host of causes of rising commodity prices -- ethanol being just one. He added that the situation doesn't appear likely to improve any time soon. Corn selling for $5 a bushel looks to be closer to the new 'normal,'" he said in his annual state of the industry report.

  • Dan Mitchell

    Dan Mitchell has spent the past 20 years writing and editing for newspapers, magazines, and Web publications. Currently, he writes the What's Online column for the Saturday business section of the New York Times. He has also written for the Chicago Tribune, the Minneapolis Star-Tribune, National Public Radio, Business 2.0, and Wired.