Chicken processor Pilgrim’s Pride Corp. is in the process of converting one of its plants to process certified organic chicken and estimates the plant will be completely converted some time in 2017. Once up and running, company executives estimated its production will be approximately 20% of the organic chicken production in the United States.
“Our team continues to identify opportunities in high growth categories and once identified we’re willing to deploy the appropriate resources when necessary for the needs of our key customers to offset the impact from volatile commodity pricing,” said Bill Lovette, president and chief executive officer, during a conference call with financial analysts on April 28. “The organic plant conversion is a good example of the steps we’re willing to take to get there.
“Our team recognizes the importance of not only identifying key customers who are growing but more importantly seeking creative solutions to satisfy merging consumer demand preferences such as organic N.A.B.F. (naturally antibiotic free), which will lead to a stronger long-term relationship with our key customers.”
Mr. Lovette said organic makes up approximately 2% of total commercial production in the United States, but the category’s compound annual growth rate is 31%.
“…There’s very limited supply of both organically grown chickens and the feed ingredients that it takes to grow those,” he said. “Our key customers in conversations with us as a key supplier have told us that their business continues to grow in organic chicken consumption and so in support of our key customers we decided that the time was right for us to enter this market.
“Traditional chicken has experienced fairly tepid growth over the last few years and so this is about our participation in those categories that are growing more rapidly.”
Once the plant is fully converted, Mr. Lovette said that organic chicken production will be approximately 3% to 4% of the company’s total U.S. production.