November 30, 2016 / 5:30 PM / 3 years ago

Pilgrim's Pride to near antibiotics goal early with chicken deal: CEO

CHICAGO (Reuters) - Pilgrim’s Pride Corp, the world’s second-largest chicken producer, will approach a goal it set to curb antibiotics use ahead of schedule due to its planned acquisition of a smaller rival, the company’s chief executive said on Wednesday.

CEO Bill Lovette said on a conference call that about 24 percent of the chicken Pilgrim’s produces will be raised without any antibiotics “some time just after the first quarter of 2017.”

Last year, Lovette said the company, which is mostly owned by meat packer JBS SA, wanted to eliminate antibiotics from 25 percent of its supply by the end of 2018.

His projection for next year includes supplies Pilgrim’s expects to acquire in a $350 million deal for chicken producer GNP Company, which was announced on Tuesday.

Without the acquisition, about 21 percent of Pilgrim’s chicken would be raised without antibiotics, Lovette said.

Food companies have ramped up efforts to remove antibiotics from chicken production as consumers and health experts have grown more concerned that the overuse of certain drugs may diminish their effectiveness in fighting disease in humans.

Removing the drugs and labeling chicken as being antibiotic-free also often allows producers to sell chicken for better margins.

“We are far ahead of our goal of being a quarter of our production antibiotic-free,” Lovette told analysts on a call to discuss the GNP acquisition.

A spokesman did not immediately respond to requests for more information.

Acquiring a company that already produces antibiotic-free chicken, such as GNP, is one way large meat producers can quickly increase offerings to target health-conscious buyers. Otherwise, the process of removing antibiotics from farms and hatcheries takes years of work, as chicken producers must find alternative ways to keep birds healthy.

Last month, Pilgrim’s said it was converting a Texas facility to antibiotic-free chicken production, which would bring the company “more than halfway” to its goal for reducing antibiotic use.

Tyson Foods Inc, the nation’s largest chicken company, plans to remove antibiotics important to human medicine from its flocks by September 2017.

In August, McDonald’s Corp, which buys chicken from Tyson and others, said it had removed chicken raised with such drugs from its U.S. supply months earlier than expected.

The fast-food chain completed the change early due to quicker than expected work by the U.S. Department of Agriculture, which helped verify that birds were not given the drugs, an executive said at the time.

Reporting by Tom Polansek; Editing by Jonathan Oatis

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