For the three months ended March 29, the nation's largest chicken processor lost $111.4 million, or $1.67 per diluted share, compared with a net loss of $40 million, or 60 cents per share, in the year-earlier period.

"While we continue working to pass along price increases to our customers, the simple fact is that, to date, we have not been able to raise prices fast enough to match the extreme price volatility in the grain markets," President and CEO Clint Rivers said in a statement.

What's more, Rivers estimated that Pilgrim's Pride would incur $800 million in additional feed costs in fiscal 2008 over the year earlier.

Second-quarter results included $17.7 million, or 17 cents per share, in impairment and restructuring charges related to the closure of the company's Siler City, N.C., plant and six distribution centers. Excluding those items, the Pittsburg, Texas-based chicken processor lost $1.50 per share.

Analysts expected a loss of 81 cents per share, according to Thomson Reuters.

Quarterly sales reached $2.1 billion, slightly above last year's $1.99 billion.

JP Morgan analyst Pablo Zuanic said in a note to investors that he is concerned that Pilgrim's Pride "faces company-specific issues that may not allow it to benefit from better chicken economics in the next six months." Specifically, Zuanic noted that, according to his estimates, Pilgrim's Pride has only increased prices on fixed-price contracts 10 to 12 percent in the last two years while, based on the cost of grains, prices should have increased about 20 percent.

What's more, Zuanic raised concerns about the length of those contracts. Pilgrim's Pride officials, however, said during a conference call with analysts on Monday that most of the company's fixed contracts have been reduced to 90- and 180-day contracts from year-long contracts. Chief Operating Officer Bob Wright noted that overall one-year contract volume was down to 17 percent while that number is typically 40 percent.

Shares of Pilgrim's Pride were $23.04, down $1.06, in midday trading Monday on the New York Stock Exchange.

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