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Foster Farms cuts contracted growers

Foster Farms, which took over the shuttered Pilgrim's Pride poultry processing plant in a deal involving $50 mln from the state, has announced that it will not extend contracts to all chicken growers who previously sold to Pilgrim's Pride in the region.

According to Director of marketing services Ira Brill, independent growers had been providing chickens to both the Farmerville plant and another now-shuttered Pilgrim's Pride plant in Clinton, Ark.

"As Foster Farms brings the Farmerville plant up to full capacity, it expects to extend contracts to the vast majority of Louisiana growers, but the regrettable fact is that this single plant cannot fully accommodate a grower base that was previously supplying two plants," said Brill.

Brill said the company, which planned to spend about $18 mln annually on chickens, would use such factors as cost, the quality of chicken housing and distance from a feed mill and the processing plant in its decision to extend grower contracts.

"Foster Farms is committed to premium, locally raised poultry products and is very pleased to begin operations in Louisiana," Brill said. "It has a long-standing history of fairness in working with growers and other business partners."

Following the company's bankruptcy reorganisation filing in Texas, Pilgrim's Pride closed the Farmerville plant in early May, affecting 1,300 employees. Foster Farms agreed to buy the plant for $80 mln. The state will contribute $50 mln.

Foster Farms has said total employment is projected to exceed 1,100 by September with the payroll eventually hitting 1,300 again.

Foster Farms plans to begin operations at the Farmerville plant on July 16.

Source: The Associated Press

Natalie Berkhout

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