* Pilgrim's Pride to idle 3 chicken plants

* That will cut production 9-10 percent

* Hopes to exit bankruptcy in '09 (Adds CEO, analysts comments, byline, previous NEW YORK)

By Bob Burgdorfer

CHICAGO, Feb 27 (Reuters) - Pilgrim's Pride Corp (PGPDQ.PK: Quote, Profile, Research)said Friday it will idle three of its 32 U.S. chicken processing plants, cutting production 9 to 10 percent, as it tries to reorganize its business so that it can exit bankruptcy by late this year.

The news drew praise from food industry analysts and apparently cheered investors, who bid up shares of competitors Tyson Foods Inc (TSN.N: Quote, Profile, Research) and Sanderson Farms Inc (SAFM.O: Quote, Profile, Research).

Pilgrim's Pride and other chicken producers have been hurt by weak consumer demand as the economic recession has fewer people eating at restaurants and has them seeking lower-priced alternatives to meat.

As a result, these companies have reduced production to restore profits.

Sanderson Farms reported a smaller-than-expected quarterly loss on Thursday, and its shares bounded higher as comments from management appeared to give investors hope that the worst is over for the struggling chicken industry.