FARMERVILLE (AP) -- A California-based poultry company that recently took over a closed Louisiana processing plant with assistance from the state says it will not extend contracts to all of the plant's former growers.
Foster Farms agreed to buy the shuttered Pilgrim's Pride poultry processing plant in Farmerville for $80 million, with Louisiana contributing $50 million of the purchase price and another $10 million for equipment upgrades.
The company's director of marketing services, Ira Brill, said in a statement that independent growers had been providing chickens to both the Farmerville plant and another now-shuttered Pilgrim's Pride plant in Clinton, Ark.
''As Foster Farms brings the Farmerville plant up to full capacity, it expects to extend contracts to the vast majority of Louisiana growers, but the regrettable fact is that this single plant cannot fully accommodate a grower base that was previously supplying two plants,'' Brill said.
Brill said the company, which planned to spend about $18 million annually on chickens, would use such factors as cost, the quality of chicken housing and distance from a feed mill and the processing plant in its decision to extend grower contracts.
Grower contracts are subject to regulation by the U.S. Department of Agriculture.
''Foster Farms is committed to premium, locally raised poultry products and is very pleased to begin operations in Louisiana,'' Brill said. ''It has a long-standing history of fairness in working with growers and other business partners.''
Pilgrim's Pride put 1,300 employees out of work when it closed the Farmerville plant in early May, following the company's bankruptcy reorganization filing in Texas.
Foster Farms plans to begin operations at the Farmerville plant on July 16. The company said total employment was projected to exceed 1,100 by September with the payroll eventually hitting 1,300 again.
Last month, the city of Clinton sued Pilgrim's Pride for $28.5 million in federal court, accusing the company of trying to manipulate the price of chicken by idling some of its processing plants. Pilgrim's Pride has refused to comment on the suit. That plant employed 450 before it closed.
Comments
Posted by IBFreeman on July 2, 2009 at 7:07 p.m. (Suggest removal)
The most important thing to remember here is Foster Farms agreed to pay $30 million for the plant. Jindal and Co. paid Pilgrim's Pride another $50 million.
I don't see how anyone should expect Foster Farms to do anything but to look out for their best interest. They didn't overpay for the plant. They only paid what they thought it was worth and was perfectly willing to walk away.
Pilgrim's Pride is attempting the same tactics now with Georgia. Thus far, wisely, the Georgia governor has resisted this call for corporate welfare that Louisiana was more than eager to spend.
Bo Pilgrim was a contributor to Jindal's campaign.
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