CHICAGO (Reuters) - Pilgrim's Pride Corp (PPC.N: Quote, Profile, Research) said on Monday it will reduce weekly chicken processing by roughly 5 percent from year-earlier levels because of soaring costs for corn, soymeal and other feed ingredients.

Pilgrim's Pride said the reduction should take full effect with weekly processing beginning in June and will remain in place "until average industry margins return to more normalized levels."

The chicken industry has been hammered by soaring prices for corn, a key feed ingredient, as more of the crop is being used to produce ethanol.

Pablo Zuanic, an analyst at JP Morgan, has estimated that every 10-cent increase in the price of a bushel of corn reduces Pilgrim's Pride's annual earnings by 33 cents a share.

Corn prices have risen more than 80 percent on the Chicago Board of Trade since July.

Pilgrim's Pride said the production cuts include the previously announced closing of its plant in Siler City, North Carolina, which should be completed by June.

(Reporting by Brad Dorfman and Nicole Maestri; Editing by Steve Orlofsky)