Pilgrim’s Pride files for bankruptcy protection

Pittsburg, Texas-based Pilgrim’s Pride announced Monday morning it has filed for bankruptcy protection while it reorganizes debt and operations.

The nation’s largest poultry processor has many operations in Arkansas, including a hatchery in Atkins and processing facility in DeQueen.

As noted in previous report on The City Wire, a Pilgrim’s Pride restructuring and bankruptcy could help beleaguered regional poultry companies like Fort Smith-based OK Foods and even the Tyson Foods of the food processing world.

Fitch, a national ratings agency, has said a bankruptcy by Pilgrims Pride would help the poultry sector by reducing the amount of chicken on the market. Fewer tons of poultry would support higher prices, according to Fitch.

Fitch analyst Carla Norfleet Taylor said a bankruptcy would result in a major shift in the industry that would help Springdale-based Tyson Foods and other poultry companies survive the near-term financial challenges of the current economic environment.

OK Foods could use the help. The regional, fully-integrated poultry processor has laid off many high-level vice presidents in the past few weeks, and could lay off hundreds of other employees if chicken prices remain weak. The company employs more than 5,000. OK Foods, like most poultry companies, is having to deal with the profit-margin destroying effect of high feed, fuel and other input prices and low chicken prices.

OK Foods did not respond to inquiries from The City Wire about the executive layoffs.