Dive Brief:
- Pilgrim’s Pride reported $8 million in losses related to Hurricane Helene damages affecting farm equipment, housing and poultry raised by its growers.
- The JBS USA subsidiary included an inventory write-down of “broiler losses incurred” as a result of the storm in late September to its third quarter earnings report.
- While Pilgrim’s had minor setbacks at a couple of processing plants due to Helene, the nearby farm communities raising flocks for the facilities were “severely impacted,” CEO Fabio Sandri said in an earnings call Thursday morning.
Dive Insight:
Hurricane Helene barreled across the Southeast, impacting Pilgrim’s facilities and poultry growers near Live Oak, Florida, and Douglas, Georgia. While Pilgrim’s was able to rebalance production to other locations to avoid disruption to key customers, many farmers were without electricity for several days and suffered serious damages, Sandri said.
“Many houses were totally destroyed, not only for us, but some in the industry,” he said.
Georgia and Florida suffered an estimated $8.5 billion in agricultural damages from Helene, including significant losses to citrus crops, pecans, blueberries, cotton and poultry.
According to the American Farm Bureau Federation, rebuilding poultry houses, restocking flocks and addressing supply chain disruptions could take months or even years for the industry. Sandri said it could take anywhere from nine months to a year to replenish Pilgrim’s “grow-out base.”
In addition to environmental and health issues from flooding, higher insurance premiums and other costs may be too much for growers and force many out.
To assist with efforts, Pilgrim’s has begun talks with Georgia’s agriculture commissioner for financial assistance to affected poultry growers. The company is also offering basic supplies to impacted communities and $1 million to support repairs in Douglas.
While there were production issues during the week of Helene, there were also disruptions to retail and foodservice operations that slowed demand. Sandri said he believes the industry has enough capacity available to support future growth as rebuilding efforts begin.
“I don’t expect a significant impact into the marketplace because of the hurricane,” he said.
During the third quarter, Pilgrim’s Pride reported net income of $350 million, nearly triple what the company earned last year due to stronger margins as feed costs declined and production improvements were realized. Net sales totaled $4.6 billion, up 5% over the same period last year.