Problems of Pilgrim's Pride are amplified in Georgia town where it was the largest employer

The closing of a chicken-processing plant has left a southeast Georgia town at odds with Pilgrim’s Pride Corp., perhaps the most troubled company in a U.S. chicken-processing industry that is being squeezed by the economy. The company cost Douglas 1,000 jobs and $300,000 in annual taxes when it filed bankruptcy and closed the plant May 15, Lauren Etter reports for The Wall Street Journal. Researchers at Georgia Southern University estimate that related job losses could bring the total to 2,000. (WSJ chart)

Pilgrim’s Pride recently rejected a $32 million bid for the plant, and another potential buyer was only allowed to fly over the plant because the company allows bidders to visit only after demonstrating financial viability, among other criteria. Critics argue that Pilgrim's asking price of $80 million is too high and exceeds the $50 million appraisal confirmed by Etter and Pilgrim’s own analysis. Another company plant in El Dorado, Ark., is on the market, but that town says it gave up trying to find a buyer after Pilgrim rejected a bid from a local company. The company has creditors who want it to emerge strongly from bankruptcy rather than sell assets now. The company's attitude has caused a rift with town officials, who say there has been “no meeting in the middle.”

With a sale seeming unlikely in the near future, the domino effect of the closure is bleak. Insurance agent Alan Carter told Etter that 35 percent of his revenue came from insuring chicken houses and related operations. The region’s medical center is preparing for more uninsured patients, and the city will likely have to raise taxes to offset the money lost from their largest sewage and water customer. And at home, local chicken farmers are quickly running out of money and into debt. (WSJ photo: Residents welcome a potential buyer)

For the 11,000 or so residents of Douglas and 25,000 in Coffee County, hundreds of cavernous, metal-and-wood chicken houses in the county are reminders of the loss. Farmers told Etter that the structures were worth at least $200,000 each when filled with chickens but are now virtually worthless. Walt Dockery, a fourth-generation farmer who derived about 90 percent of his income from chicken farming, says Pilgrim’s Pride is crippling the community. "They just have no consideration for what they're doing to the people down here.” (Read more)