U.S. Poultry Segment Project Expenditures for 2014 Expected to Push $1 Billion

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Researched by Industrial Info Resources (Sugar Land, Texas)--By most accounts, 2013 was one of the most profitable years for the U.S. poultry industry. Low corn prices and solid demand from domestic markets, along with growing demand from abroad, made for a banner year--and 2014 is expected to be stronger. Industrial Info has identified more than 95 capital projects within the segment that call for building new plants, plant expansions, equipment replacements and/or upgrades. The combined investment value of those projects is just more than $1 billion.

The basis for this year's outlook is weighted more on demand for products and less on the cost of production, even when taking into account the potential for higher feed prices. To that end, the U.S. poultry segment is on its way to a solid year in terms of project expenditures.

Most of the poultry industry projects have a planned construction start date for 2014. So far, 12 projects that combine for $139 million have started construction. Sixty projects worth a combined $629 million have a construction start date between March and the end of this year. There were several projects scheduled for 2013 that were delayed and are now moving forward. Plans for 2015 and later show 26 projects totaling $258 million.

Many of the project expenditures are geared toward plant expansions, processing line upgrades and major equipment replacements. For example, Tyson Foods (NYSE:TSN) (Springdale, Arkansas) plans to begin construction later this year on a $5 million kill-floor expansion at a plant in Indiana, and on a plant-wide expansion, estimated at $29 million, at a facility in Missouri. The company's project expenditures range in value from $500,000 to $58 million, for a total of $289 million spread across 40 projects.

Pilgrim's Pride Corporation (NASDAQ:PPC) (Greeley, Colorado) has $52 million in expenditures, including a major upgrade of a Texas facility, that will replace 16 deboning lines, and work on eight prepared foods lines. In another development, JCG Foods of Georgia, a division of Koch Foods (Park Ridge, Illinois), is planning a $49 million expansion that includes two new production lines.

Seven new poultry processing plants are being proposed or recently started construction. Peco Foods (Tuscaloosa, Alabama) and Allen Harim Foods LLC (Seaford, Delaware) will each spend more than $100 million to build new facilities. In total, grassroot construction activity accounts for just over $370 million.

Industrial Info's database of active capital and maintenance expenditures in the Food & Beverage Industry across North America and the Sugar Processing Industry and Water Desalination Segment worldwide shows current expenditures of $47.7 billion for more than 2,700 active projects. The North American portion comes out to more than 1,700 active projects that total more than $27.8 billion.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.