Pilgrim’s Pride CEO Fabio Sandri stopped short of saying whether the company has any intention in making changes to the size of its chickens in its live operations, but indicated it could be a possibility, depending on the needs of the company’s key customers.
During the Pilgrim’s second quarter earnings call, held on July 27, Sandri mentioned that the greater U.S. poultry industry “continues to shift production away from the smaller bird sizes, to the heavier weight ranges, supporting a consistent year-over-year growth in average live weights.” Sandri also hinted at a possible imbalance in bird sizes in the U.S. flock relative to the consumer demand.
That prompted Stephens analyst Ben Bienvenu to ask: “Have you all thought at all about any capacity conversions between sizes across your network, perhaps from big birds to smaller sizes?”
Some of the company’s processing capacity is being increased to accommodate the demand for smaller bird sizes, as Sandri spoke of an expansion project at the Pilgrim’s plant in Athens, Georgia, where smaller chickens are processed.
However, any other shift on the horizon remains to be seen.
“We are happy with the portfolio that we have, and of course we are always looking for opportunities to improve, diversifying options … but overall, our portfolio is well balanced in the fresh category. We are always investing to grow with our key customers, so I think it’s more an issue of growth, rather than just converting operations,” Sandri replied. “So if there is any balancing in our portfolio, I believe it will be through the growth in partnership with our key customers.”
Financial results
During the call, Sandri highlighted the company’s financial performance for the second quarter, which concluded on June 25.
Net income was down significantly, when compared to the second quarter of 2022, at $60.9 million, a year-over-year drop of more than $300 million. Net sales for the quarter were down 7% to $4.3 billion.
Pilgrim’s Pride is the second-largest poultry producer in the United States. The company also has operations in Mexico and in Europe.
