PITTSBURG, Texas (AP) -- Chicken producer Pilgrim's Pride Corp. said Tuesday it will cut 600 jobs at its El Dorado, Ark., plant, saying the cost-cutting move was in response to record-high prices for feed.
Pilgrim's Pride will consolidate its tray-pack chicken business from its El Dorado processing plant into six other facilities. The move will cut 600 jobs by Sept. 19., about half of Pilgrim's Pride's workforce in El Dorado.
The processing plant will be converted to a supply plant, which will send fresh chicken in bulk to plants that produce prepared foods, Pilgrim's Pride spokesman Ray Atkinson said Tuesday.
"The process requires less labor," Atkinson said. The company also said the union at the plant turned down a proposed benefit reduction, which contributed to the jobs cut.
The company said in April the plant was being reviewed as a target for possible consolidation or closing.
Pilgrim's Pride also plans within 60 days to close a distribution center in El Paso, Texas. The facility employs about 34 workers.
In the past year, the cost of animal feed has become more expensive because of rising prices for corn, a key ingredient, and some meat producers have cut back on production to help counter the higher costs.
"Since March, we have been conducting a thorough review of all our production facilities to ensure we are operating as efficiently as possible in response to the unprecedented challenges facing our company and our industry," said Clint Rivers, president and chief executive officer, in a statement.
Rivers noted in Tuesday's announcement that the El Dorado live operation is keeping costs low for the company.
Pilgrim's Pride doesn't expect to record material financial charges from the closings.
Shares of Pilgrim's Pride was up 30 cents to $14.25 in early afternoon trading.
