Pilgrim's Pride to cut jobs for 836

Siler City will lose one of its largest employers when a chicken plant closes by June

Pilgrim's Pride will close its Siler City chicken processing plant by June, laying off 836 workers at one of Chatham County's largest employers and dealing a major blow to the region's economy.

The company blamed rising feed costs, an oversupply of meat and other factors for creating a "crisis in the U.S. chicken industry" that is forcing cost cuts.

Closing the plant, with its chicken hatchery and feed mill, will hurt workers, Siler City merchants and area farmers who raise chickens for Pilgrim's Pride, said town manager Joel Brower.

"These families and our local economy will definitely be impacted," he said.

To help employees in Siler City, a team of state Department of Commerce officials will provide job-placement services and training. Pilgrim's Pride has also pledged assistance. The company operates chicken plants in Sanford and Marshville, where some of the Siler City workers could transfer.

The plant's 56 salaried plant workers will be offered severance packages, said company spokesman Ray Atkinson, who declined to provide details.

The majority of the plant's 780 hourly workers are Hispanic, said Dianne Reid, president of the Chatham County Economic Development Corp. A year ago, the average pay in the animal processing industry in Chatham County was $460 per week, according to the latest data from the N.C. Employment Security Commission.

Siler City is also home to a Townsend's chicken plant that employs about 1,300. But according to Townsend's Web site, the plant is not hiring.

The loss of more than 800 jobs in a town with a population of 8,000 is significant. And the plant closure is expected to have ripple effects that reach much further.

Pilgrim's Pride buys $1.2 million worth of water from Siler City every year, said Brower, the town's manager. "If we lose this, we're going to be forced into some drastic rate adjustments," he said.

Also, 95 farmers within 50 miles of Siler City are under contract with Pilgrim's Pride. The company doesn't expect to drop any of the contract farmers, Atkinson said. But they may raise fewer than the customary five flocks a year.

The loss of contract income could hit hard, said Kay Doby, president of the N.C. Contract Poultry Growers Association. Some farmers took loans to pay for recent chicken-house upgrades that Pilgrim's Pride demanded.

"I imagine there will be growers in this area sweating bullets," she said.

Texas-based Pilgrim's Pride also plans to close six distribution centers by June, eliminating 1,100 jobs nationwide. The largest U.S. chicken processor said soaring corn prices have more than doubled feed costs in the past two years.

Rising demand has pushed corn prices to record highs. The biggest culprit is federal subsidies for ethanol as an alternative fuel, which is leaving less feed for the chickens, said Pilgrim's Pride CEO J. Clint Rivers.

Other poultry producers, such as Butterball and Tyson Foods, also are worried about feed costs. Tyson plans to close a Wilkesboro plant that produces roasting chickens by April, cutting 410 jobs.

(Staff writers Frank Norton and Jonathan B. Cox contributed to this report.)