Dive Brief:
- Pilgrim's Pride sales grew in the fourth quarter as the poultry processor reported strong demand in the U.S. and the potential for export opportunities with the spread of bird flu.
- The company, which is majority owned by meat conglomerate JBS, said Monday that fourth quarter revenue hit $4.53 billion, up from $4.13 billion a year earlier. Earnings beat analyst estimates.
- U.S. demand has remained strong as rising beef prices position chicken as a more affordable option for consumers, Pilgrim's executives said on an earnings call. The global spread of bird flu, combined with transportation slowdowns around the Suez Canal, also provided new export opportunities.
Dive Insight:
Poultry producers are gearing up for a surge in demand for 2024 as tightening beef supply could allow chicken to grab more share of the protein market.
"We're seeing some very strong demand for chicken," Pilgrim's CEO and President Fabio Sandri told investors. "The spread between chicken and beef and pork are close to record levels, and we're seeing a strong increase in the promotional activity by the retailers."
A global oversupply of chicken eased in the second half of 2023 as growers hatched fewer chicks and highly pathogenic avian influenza swept through commercial flocks around the world. The rightsizing of flocks has positioned Pilgrim's "for a strong year for chicken in 2024," Sandri said.
Pilgrim's massive manufacturing footprint has allowed it to largely avoid the impact of bird flu on operations. Bird flu dynamics "are relatively consistent with prior quarters," Sandri said, noting that trading partners have adjusted restrictions "to minimize impacts as much as possible."
In some cases, the spread of avian influenza has been a boon for Pilgrim's as tightening supply in Southeast Asia countries boosts demand for imports from the U.S. Additionally, higher production costs and transportation hurdles in the Middle East have also "favored the U.S.," Sandri added.
"We elevated our performance and demonstrated an ability to drive profitable growth despite circumstances," he said.
