This move is another verification that farming, energy, and food are closely connected.

The company announced that it will also close six distribution centers due to increased feed costs. Feed costs have significantly increased over the recent year and are squeezing profit margins for all livestock and poultry processors. Corn and soy meal are the main ingredients in poultry rations. Demand from the ethanol industry has increased corn prices.

At the same time, competition for farm land to grow corn and soy has increased prices for these and other grains. Closure of this facility will reduce Pilgrim's Pride's processing capacity by about 1.5% and the industry's capacity by about 0.4%. Pilgrim's Pride's decrease in chicken production will increase chicken prices for all consumers.

This plant closing will have a small impact upon industry capacity and increase poultry prices somewhat, however it is an indicator of the trend to close food processing plants in favor of opening ethanol plants.

The grains that would have been used to feed chickens and other livestock will instead be used to manufacture ethanol. Ethanol production will increase due to government subsidizes and legislation mandating that more ethanol be used in cars.

This production pattern change from food to ethanol is an indicator of changes to be made by Pilgrim's Pride and other food processors to curtail production and cut costs.

In the coming years there will be less chicken to eat and more ethanol to fuel vehicles.

Hungry drivers may have ethanol to fuel their drives to grocery stores, but they may not be willing to pay the high prices for chicken when they arrive.

Harry H., FL