United States-Pilgrims Pride leavce producers and suppliers High and Dry.

11 March 2009 | by FarmingUK Team |

UNITED STATES-PILGRIMS PRIDE-LEAVE SUPPLIERS HIGH AND DRY.

Lincoln Parish Police Juror Mickey Mays saw a roomful of desperate people at the Farmerville Recreation Center last week.

The 500 people who packed the center were mostly independent chicken growers who contract with Pilgrim’s Pride, which announced that it would close its northeastern Louisiana and southern Arkansas processing operations within 75 days, leaving the farmers with empty chicken houses and crushing bank notes.

"Most of these folks are all in," Mays said after listening to grower after growing talking about million-dollar loans they won’t be able to service after they send their final batches of chickens to the plants in Farmerville and El Dorado, Ark.

Lara Smith of Lillie and her husband invested everything they had, including his retirement, and borrowed $450,000 more to build chicken houses on the promise that Pilgrim’s Pride would continue operating.

"I’ve got one foot in the grave and another on a banana peel," Smith said. "We were going to grow chickens for the rest of our lives. But we’ve got a $14,000 note every two months that we won’t be able to pay if something doesn’t happen."

That’s the problem for the growers and their lenders.

While the 1,300 Pilgrim’s Pride employees at the Farmerville plants also face potential financial ruin, they will qualify for unemployment benefits and training that could help stand them up until they find other work.

The growers aren’t likely to find jobs that could provide enough money to meet their chicken farm loan obligations, and even if they do, there’s little practical incentive for them to pay back loans on investments that have no chance of any return.

"There’s really only one thing that you can do with chicken houses, and that’s grow chickens," said Union Parish grower Butch Sensley.

Sensley operates 13 chicken houses, which he said cost about $100,000 each..

Louisiana Agriculture Commissioner Mike Strain said that the state will lobby lenders to relax or defer terms on the loans, but even that would only postpone the inevitable unless a buyer for the plant can be found, and found fast.

"Our entire lives are on the line," said Robert Moore, a Jackson Parish grower. "Everything we have is mortgaged and built to Pilgrim’s Pride’s specifications. We owe millions. So they leave, and we’re left holding the bag."

Unfortunately, even in a best-case scenario, Louisiana Economic Development Secretary said last week that finding a buyer willing to invest $65 million to $70 million in a processing plant when there is a glut of chicken on the market would probably take at least a year.

Another option would be for the growers to form a co-operative and take over the operations themselves. Strain said the state would help, but it’s a massive undertaking.

Still, it may be the growers’ only hope.

"What’s stopping us from being a co-op?" Sensley said. "Everybody here is in it together. If we don’t do something, it’s complete devastation."

Bright spot: Even as Union Parish faces an economic catastrophe, the community will celebrate its status as an ideal retirement location Tuesday at the Farmerville Recreation Center with a public forum, exposition and dinner..

The "Re-Discover Union Parish" event will begin at 5 p.m. with displays by local retailers and organizations. The 6 p.m. forum will focus on the parish’s Certified Retirement Community project.

Dinner of fish and, yes, chicken will be served at 6:30 p.m. The event and dinner are free to the public, but reservations are required by calling 368-3947 no later than noon Monday.

Special guest will be Heather Reggio Finke, director of the Louisiana Retirement Development Commission.

The event is sponsored by Retire in Union Parish, an initiative of the Union Parish Police Jury and the Union Parish Chamber of Commerce. It’s supported by a grant from the Louisiana Retirement Development Commission.