FARMERVILLE, LA. — California-based Foster Farms, which recently took over a closed Pilgrim’s Pride Louisiana poultry processing plant with assistance from the state, said it will not extend contracts to all of the plant's former growers, according to The Associated Press. Foster Farms agreed to buy the plant in Farmerville for $80 million, with Louisiana contributing $50 million of the purchase price and another $10 million for equipment upgrades.
Independent growers had been providing chickens to both the Farmerville plant and another now-closed Pilgrim's Pride plant in Clinton, Ark., said Ira Brill, Foster Farms’ director of marketing services.
"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," Mr. Brill said.
He added that the company, which planned to spend about $18 million 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. Grower contracts are subject to regulation by the U.S. Department of Agriculture.
"Foster Farms is committed to premium, locally raised poultry products and is very pleased to begin operations in Louisiana," Mr. Brill said. "It has a long-standing history of fairness in working with growers and other business partners."
Pilgrim's Pride put 1,300 employees out of work when it closed the Farmerville plant in early May, following the company's bankruptcy reorganization filing in Texas.
On July 16, Foster Farms plans to start operations at the Farmerville plant. Total employment is projected to be more than 1,100 by September with the payroll eventually hitting 1,300 again, the company said.