Pilgrim's reported a net loss of $162.5 million for the third quarter ending September 25, 2011, compared to net earnings of $57.9 million during the same time in 2010, according to the company's latest report.
Market prices for some key chicken products were down sharply compared to 2010, according to the company. Boneless skinless breast meat in the third quarter averaged $1.27 per pound versus $1.71 per pound in 2010, while the market price for wings was $0.89 per pound compared to $1.19 per pound in 2010. The average market price for leg quarters was $0.46 per pound, up $0.09 per pound from the same time in 2010.
Simultaneously, feed-ingredient costs remained high over the quarter. Market prices for corn averaged $6.92 per bushel, up 65% from 2010 numbers, while soybean meal averaged $352 per ton, a 15.4% increase. Feed ingredient purchases, which represent the largest component of Pilgrim's cost of goods sold, were approximately $102 million higher during the quarter than in 2010. The corn market continued to demonstrate volatility, ranging from $6.17 to $7.65 per bushel during the third quarter.
Although prices have yet to stabilize at profitable levels, egg sets, pullet placements and chicks placed all showed declines year over year, said CEO Bill Lovette. As cold storage levels also reflect a reduction for the year, the signals are in favor of stronger chicken pricing heading into 2012.