Source: MEATINGPLACE, 4/3015

Pilgrim’s Pride is bucking the industry trend by boosting its presence in the small-bird category and has set an aggressive goal for reducing antibiotics usage in its poultry, Chief Executive Bill Lovette told analysts Thursday.

While small-bird production has shrunk to 20 percent of industry output from 40 percent of total head over the past few years, Pilgrim’s has continued to invest in small-bird production, Lovette said.

The approach has paid off as small-bird pricing has edged higher due to reduced supplies and strong demand for rotisserie chicken and from quick-service operators, he said.

Antibiotic-free
Pilgrim’s also is aggressively moving production to antibiotic-free chicken toward a goal of having 25 percent of its chicken certified by the end of 2018, Lovette said.

The company now uses antibiotics strictly for therapeutic purposes only and is working to eliminate antibiotics used in human medicine from its hatcheries over the next 18 months, the CEO said.

Supply and demand
Lovette predicted industry supply measured in total pounds will grow by as much 4 percent to 5 percent this year over last year, but demand is strong and will keep pace with supply growth.

Pullets placed are running 7.6 percent above last year, and the industry may have 3 to 3.5 percent more hatching eggs in the second half of this year into 2016, he said.

Plant progress
Construction of Pilgrim’s Veracruz, Mexico, plant is on track, with the feed mill and hatcheries expected to start running by mid-May, production of live chickens beginning in the summer, and the first chickens hitting the market in early September, Lovette said.

Earnings double
Pilgrim’s reported first-quarter net income doubled to $204.2 million from a year ago. Adjusted earnings per share climbed to 82 cents from 39 cents. Sales rose to $2.05 billion from $2.02 billion.

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