The nation's largest chicken producer has filed for Chapter 11 bankruptcy protection. Pilgrim's Pride Corporation based in Pittsburg, Texas, sought bankruptcy protection in a filing on Monday, saying that as of Sep. 27 it had $3.75 billion in assets and $2.72 billion in debts. The company's financial problems have been known for months, and it has had to extend its temporary credit line three times since September.
A Pilgrim's Pride spokesman said the company was reorganizing and not liquidating its assets, and that it will keep operating throughout the reorganization process.
The chicken producer has been saddled by the debt from its $1.3 billion acquisition of rival Gold Kist last year, which analysts cite as the primary cause of its large debt load.
Over the past year, Pilgrim's Pride and other meat producers have faced a number of significant challenges including high feed-ingredient costs and weak market pricing due to softening demand and an oversupply of meat. Producers like Pilgrim's have pledged or started to cut production but others, like Tyson Foods have not.