Pilgrim's reported a net loss of $85.4 million for its fourth quarter 2011, ending a challenging year for the company that included extreme grain volatility and increased cost inputs, according to Bill Lovette, Pilgrim's CEO.
The company also saw an overburden of finished goods inventories and overproduction in the first half of the year and weak chicken prices relative to costs throughout all of 2011. But Pilgrim's changed its operating model, focusing on a strategy and management realignment as well as growth of value-added exports. "This transformation brings forth a goal of more effective working capital management, an improved cost structure and a more profitable sales mix," said Lovette. "Pilgrim's has also changed its pricing strategy, creating less dependence on one-year fixed price contracts and [creating something] more reflective of markets."