According to The Street, Poultry producers have faced significant financial distress as fluctuating prices over the last two years have proven to be the breaking point for many companies. The industry experienced a surge in July 2022 when poultry prices reached an all-time high, but this euphoria was short-lived, as prices began to decline sharply just three months later.
Cooks Ventures and the Impact of Financial Strain
Cooks Ventures, a chicken producer based in Decatur, Arkansas, shut down operations in late 2023 and subsequently filed for Chapter 7 bankruptcy liquidation in April 2024 in the District of Delaware, according to WattPoultry. Established in 2019, the company had secured approximately $62 million in financing on multiple occasions to expand its operations; however, this funding was insufficient to keep the company afloat amid fluctuating market conditions.
Do Good Foods Seeks Chapter 11 Protection
Another notable player in the poultry market, Do Good Foods, located in Bedminster, New Jersey, filed for Chapter 11 bankruptcy in June 2024 in the District of Delaware. The company is attempting to reorganize its business in response to high interest rates and inflation, as reported by Food Dive.
Latest Bankruptcy Filing: Pure Prairie Poultry
The latest poultry producer to face financial hardship is Pure Prairie Poultry, which filed for Chapter 11 protection on September 20, 2024, in the U.S. Bankruptcy Court for the District of Minnesota. The company aims to restructure its operations to continue as a going concern. According to its bankruptcy petition, Pure Prairie Poultry listed assets between $50 million and $100 million, alongside debts ranging from $100 million to $500 million. The company is seeking up to $15 million in debtor-in-possession financing.
Also Read: Exciting News: Double Social Security Payments Confirmed for November 2024
Investment and Ambitious Plans Cut Short
Pure Prairie Poultry acquired its poultry plant in Charles City, Iowa, in December 2021 and spent nearly a year refurbishing it before launching whole chicken production operations in November 2022. The company intended to cater to the branded and private label premium and organic chicken markets across six Midwestern states, including Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota. Currently, its products are available in 213 grocery stores throughout the Midwest.
In April 2022, the company qualified for a $39 million loan under the Federal Food Supply Chain Guaranteed Loan Program to assist with its plant upgrade. Spirits were high as poultry prices soared in July 2022, and the company planned to roll out whole chickens by November 2022, with intentions to expand processing to other chicken products once it secured federal funding.
Challenges and Setbacks
However, poultry prices plummeted in October 2022 and remained depressed for nearly a year. Around the same time, Pure Prairie Poultry received approximately $7 million in federal grant funds on October 20, 2022, intended as gap funding until the larger loan proceeds were secured. Unfortunately, sales fell short after the plant opened, and the federal loan did not finalize until April 2023. Additionally, refurbishment of the plant for expanded processing did not conclude until November 2023. Once operational, the company began offering various chicken products, including breast fillets, tenders, thighs, drumsticks, and wings.
Delays in funding and refurbishments—from the plant’s acquisition in 2021 to the launch of full operations in November 2023—significantly impacted the company. Court documents reveal that Pure Prairie Poultry reported an operating loss of $38 million from November 2023 to the present. The company faced liquidity issues, worsened by delays in loan funding and refurbishment, which hindered its ability to launch its expanded brand for an additional nine months. Additionally, Pure Prairie Poultry has struggled to establish alternative banking relationships to support its operations.
- CalFresh: How to apply for new SNAP checks of up to $1,756 in California & how to get Food Stamps replacement - November 25, 2024
- California Raw Milk Recalled Due to Bird Flu Contamination - November 25, 2024
- Tragic Death of Infant Leads to Expanded Meat Recall Due to Listeria Contamination - November 25, 2024
