December 2011 Articles

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Just Rambling

Just Rambling: Remember back to December of 2008 when Pilgrim’s Pride Poultry Company declared bankruptcy. At that time, many of us felt that the bankruptcy would never happen, but to our dismay it did. Remember a little later in February of 2009, when Pilgrim’s Pride announced they were idling both the El Dorado, AR and the Farmerville, LA processing plants. Even earlier, they had announced the idling of the Clinton, AR processing plant. The shock of these announcements reverberated through Central and Southern Arkansas to North Louisiana. These areas in both states had been rich in poultry production for the past 50 years and would be forever changed by these announcements. Thousands of employees and hundreds of growers would be affected.
Fast forward to June of 2011. During the past 30 months growers and employees have faced stressful times. Many of the employees have been able to find other jobs but many have not. Thanks to Louisiana Governor, Bobby Jindal and other Louisiana elected officials, Foster Farms was able to receive $50 million in taxpayer funds from the state to help purchase the idled Farmerville facility from Pilgrim’s Pride. Foster Farms has re-employed a lot of those workers that were laid off and has picked up a large number of the growers in North Louisiana. A few growers in North Louisiana have been picked up by House of Raeford Poultry Company, and a few in South Jackson parish have been picked up by Pilgrim’s Pride in Natchitoches. Even so, there are approximately 50 growers in North Louisiana without chickens in their houses and very little hope of ever receiving birds again. South and Central Arkansas growers are even more devastated than Louisiana growers. There have been some growers that have been able to get contracts through Tyson, Morrison, and England but the vast majority remain without contracts in both the Clinton and El Dorado areas.
During the last 30 months growers have had meetings with attorneys, lenders, politicians, and prospective integrators to try to work out future growing arrangements for their farms in order to provide a livelihood for their families and to pay the debts owed against their farms and homes. A common element throughout all these meetings has been a hope to be back in the chicken business and a desire by all growers to be able to pay their debts. Many growers (those picked up by Foster Farms and other integrators) have seen their hopes and desires materialize, while most of those without contracts have turned their hope to lawsuits against Pilgrim's Pride. Even though a federal disaster grant was received by most growers, both with and without contracts, in most cases it could not replace the loss of a growing contract. These grants were very much appreciated (especially since, unlike many other farmers, poultry growers had never received any type of federal disaster assistance) but in many cases it was only a temporary stop gap for the many that have large debts against their farms. Without a poultry growing contract, the large investments required to get into the poultry business cannot be repaid. For this reason lawsuits have been filed against Pilgrim’s Pride. As of this writing, all lawsuits filed against Pilgrim’s Pride that remained in the bankrupt court have been dismissed by the Bankrupt Court Judge, with growers only getting a few cents on the dollar for their settlement. The only lawsuit left against Pilgrim's Pride by growers began trial on June 16, 2011 in Marshall, Texas out of the bankrupt court. This lawsuit involves between 200 and 300 growers without contracts, and hopefully these growers will prevail. It appears Pilgrim’s Pride came through their bankruptcy relatively unharmed after being protected by the bankrupt court. If Pilgrim’s Pride can protect their investments through bankrupt court, it appears these growers should get fair compensation through their lawsuit. However, only time will tell. If just compensation is not received, then not only will these growers suffer, but so will lenders involved with these growers, as well as our area as a whole. Please keep these growers in your thoughts and prayers. Van Bennett