Pilgrim's Pride underestimated U.S. meat supplies, hurting earnings

Feb 16, 2023

Pilgrim’s Pride Corp, one of the biggest U.S. chicken companies, underestimated meat production at the end of last year, Chief Executive Fabio Sandri said on Thursday after the company reported a surprise quarterly loss.

The company, owned mostly by meatpacker JBS SA, joined rival Tyson Foods Inc in misjudging that lower beef and pork supplies would increase demand for chicken as consumers grapple with high inflation.

Pilgrim’s shares still rose by 5% as the company said it expects beef supplies to shrink later this year and is now seeing some consumers switching to chicken.

Executives expected total meat supplies to tighten toward the end of 2022 because U.S. ranchers slashed the size of the cow herd while avian flu wiped out millions of turkeys, Sandri told analysts on a call.

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Video: What Does 20 MILLION Hogs a Year Look Like?

?? The Multi-Plant System Processing 20 Million Hogs Annually in the Midwest JBS USA operates multiple large-scale pork processing facilities across the Midwest, including major plants in Iowa, Minnesota, and Indiana. Combined, these facilities have the capacity to process approximately 20 million hogs annually.

Each plant operates high-speed automated slaughter systems capable of processing up to 20,000 head per day, followed by fabrication lines that break carcasses into primals, sub-primals, and case-ready retail products.

Hog procurement is coordinated through electronic marketing platforms that connect regional contract finishing operations and independent producers to plant demand schedules. This digital procurement system allows for steady supply flow and scheduling efficiency across multiple facilities.

Processing plants incorporate comprehensive food safety systems, including pathogen intervention technologies, rapid chilling processes, and integrated cold-chain management. USDA inspection is embedded throughout the harvest and fabrication stages to ensure regulatory compliance and product integrity. Finished pork products — from bulk primals to retail-ready packaged cuts — are distributed through coordinated logistics networks serving domestic and export markets.