Pilgrim's Pride Corp (PPC)

wluedu (55.77) Submitted: 1/15/07 3:41 PM : Start Price: $30.30 PPC Score: 49.88

Corn prices, which occupy a third of PPC's total cost of sales, are currently at a 10 year high. These prices are high because in an effort to find alternatives fuel sources the production of ethanol (which requires corn) in the US is up to 4.4 Billion gallons (February 2006). The USDA predicts ethanol production to reach 7 Billion gallons by 2010. As the demand for corn has skyrocketed, so has its price - and even Pilgrim's Pride has admitted that with raising corn prices chicken prices will have to increase as well in 2007 and beyond. Combine commodity price increases with the possibility of an avian flu threat that would scare consumers all over the world and you have a stock that's not going up.

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