While most of America was preparing for a day of thanks, followed by a day of shopping, Pilgrim's Pride was talking to lenders to save themselves from bankruptcy. You might recall our post two weeks ago chronicling the saga of Pilgrim's Pride, who's temporarily extended (for the second time) line of credit was due to expire on Wednesday. It would appear that they had something to be thankful for, because on Friday they made this announcement via their website:
Pilgrim's Pride Corporation (NYSE: PPC) today announced that it has reached an agreement with its lenders to extend the temporary waiver under its credit facilities through noon (CT) on December 1, 2008. Pilgrim's Pride continues to pursue opportunities to refinance and recapitalize its business, and to position itself to capitalize on its strategic advantages.While a weekend doesn't seem like a lot of time, it was enough to make them postpone their expected fourth quarter loss of $802 million dollars. Business Week has more:
The company said Friday in a regulatory filing it was delaying filing its annual report for fiscal 2008 with the Securities and Exchange Commission due to ongoing talks with its lenders regarding temporary waivers and "related financial uncertainties."According to the Washington Post, shares of the company spiked 101.9% with the announcement of the waiver. What their company will do Monday after the deadline passes and the actual fourth quarter earnings are posted remains to be seen.
While some people are waiting to see the dip in gas and corn prices translate into lower prices at the grocery store, at the supply end a fear is mounting that deflation is impacting the markets. In cattle news, the Dickinson Press has an article about the falling prices of cattle amid industry fear:
Has deflation affected your business? How were your Black Friday sales? Are you using incentives like the restaurants profiled in this CNN article? Let us know in the comments below!Wade Moser, executive vice-president of the North Dakota Stockmen’s Association, said the cattle market is being driven by panic just like the stock market.
“There is absolutely no reason fundamentally-wise we ought to see this market go the way it is,” he said. “We are seeing corn prices lower than a year ago. We’re seeing diesel and fuel prices come down to good levels.”
It’s just that this whole market is being driven by fear, that’s the only reason we’re seeing what we’re seeing.”
Producers statewide aren’t selling their cattle, except where producers were forced to because of the drought, Moser said.
Further Reading:
The Star Tribune is doing a series on the food chain to research the connection between high prices and fuel.
The Daily Tribune on Pilgrim's Pride and their credit extension
The Cattle Network on ethanol mandates and tax incentives
Hudson Hub Times on what farmers are saying about ethanol and food prices
