Perdue to cut chicken output, citing low prices 7 percent reduction not expected to result in layoffs on Eastern Shore

March 08, 1996|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

Perdue Farms Inc. of Salisbury said yesterday that it will cut chicken production by 7 percent, saying low prices for boneless chicken products, high grain costs and high production levels by other meat packers led to the move.

The cuts work out to about 3.2 million pounds of chicken a week, Perdue spokesman Dan Prince said.

The company, the second-biggest chicken producer in the United States, now processes 46 million pounds of chicken every seven days.

Mr. Prince said the cuts are not expected to lead to layoffs among Perdue workers on the Eastern Shore, but some workers are likely to see their hours reduced.

"We are taking these measures on an individual plant basis," Mr. Prince said. "It's up to the local management team how best to handle it."

The move follows Perdue's announcement earlier this week that it will close a plant in Fayetteville, N.C.

It also follows announcements by publicly traded competitors such as Tyson Foods Inc. and Hudson Foods Inc. that they also have cut production by between 7 percent and 8.5 percent.

Chicken prices have fallen sharply at the wholesale level since the fall. Statistics from Maryland's Department of Agriculture show the price of boneless, skinless breasts in Mid-Atlantic states falling to about $1.60 a pound in January from $2.20 in September.

The average price of whole fryers also fell, to about 54 cents a pound last week in a 12-city price index from 64 cents in September.

Corn futures hit on Feb. 29 a 15-year high of $3.95 a bushel for March delivery. About 80 percent of chickens' diet is corn, according to the National Broiler Council in Washington.

Mr. Prince said Perdue has no firm idea how long the cutbacks will last.

"We're going to have to read the changes in chicken prices and feed costs," he said.

Perdue is the largest integrated poultry producer in the Northeast. The company employs more than 20,000 people at facilities in Alabama, Delaware, Florida, Indiana, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, Virginia and West Virginia.

Pub Date: 3/08/96

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