GoodFuels

Pilgrim’s Pride Pays Perry’s Price

It’s no surprise to read in the Houston Chronicle that “Big Chicken” is behind Texas Governor Rick Perry’s request to waive half of the Renewable Fuels Standard.

According to the article, Perry had a meeting back on March 25 with Lonnie “Bo” Pilgrim, owner of Pilgrim’s Pride, the country’s largest chicken producer.

A few days later, Pilgrim donated $100,000 to the Republican Governors Association, which is chaired by Perry. That donation, according to the article, “also made it possible for Pilgrim to address nine Republican governors during a closed-door energy conference in Grapevine to explain his belief that ethanol production is driving up feed costs for poultry and livestock producers.”

Pilgrim’s Pride also generously donated its lobbyists and public relations firm to help Perry’s staff finalize the details of waiver request, which was submitted on April 25.

This company that is whining about increased feed costs had net sales of nearly $7.6 billion last year, with a gross profit of about $600 million. According to them, their U.S. market share, based on the total annual chicken production in the U.S., is approximately 25%, which is approximately 20% higher than the second largest competitor in the chicken industry.

According to their last annual report, the company still managed to make a significant profit despite higher feed costs.

Industry-wide production cutbacks implemented early in 2007 along with strong demand for our products created an improved pricing environment for our products in the last half of fiscal 2007 when compared to the same prior year period. This allowed the Company to return to profitability in spite of further increases in the cost of feed ingredients during fiscal 2007.

In fact, their gross profit for fiscal 2007 increased $293.9 million, or 98.8%, over fiscal 2006.

Seems like Perry sold out too cheap.