Pilgrim's enviropride Sustainable Progress

Food production requires the use of water, land, and air resources. Pilgrim’s Pride Corporation understands that it’s our responsibility to be a good steward of these resources, and we have implemented the Pilgrim’s enviropride Sustainable Progress system to help accomplish this goal. This system serves as the environmental framework for our day-to-day operations and long-range planning.

Our enviropride mission is:

“To be an industry leader in sustaining air, water, and land resources by minimizing the resources needed and the wastes generated at our facilities and farms, at our customers’ locations, and throughout our supply chain in the production of quality and affordable poultry products and by-products.”

The enviropride system uses the concept of continuous improvement to establish goals, assign responsibilities and resources, define specific actions, establish, measure and access metrics, report performance, and continuously improve results.

Our environmental sustainability efforts are focused in the following functional areas:

- Water and Wastewater
- Waste and By-Products
- Land and Agriculture
- Transportation
- Packaging
- Energy
- Facilities
- Supply Chain

Water and Wastewater

Water Reuse and Recycling

By its nature, poultry processing requires the use of relatively high volumes of potable water to assure the production of a safe finished product for the consumer. We understand that the water we use throughout the production process must be managed efficiently and responsibly.

Pilgrim’s Pride Corporation is committed to conserving water to the maximum extent possible, and we have installed water reuse systems at virtually all of our processing plants to help accomplish this goal. Four of our plants are also equipped with large-scale water reuse systems that save a combined total of more than 1.7 million gallons of water per day, or 400 million gallons per year.

Water conservation systems installed in our other processing plants enable us to reuse more than 1.5 million gallons of water per day, or 375 million gallons per year. We are continuously evaluating the feasibility of additional water reuse systems in our processing operations, and will implement them in the future as regulations, technology, environmental benefits and costs allow.

Wastewater Management

Our company operates wastewater pretreatment and/or treatment systems at all of our processing plants. These systems utilize state-of-the-art treatment technologies.

The wastewater treatment team at our plant in Russellville, Alabama, recently earned its third award from the Alabama Water Environment Association for advanced biological and water reuse systems, becoming the first repeat winner of this prestigious honor. In 2005, the Russellville team also received the U.S. Poultry & Egg Association Clean Water Award in the full treatment category, recognizing excellence in performance in achieving permit effluent requirements, operator proficiency and overall environmental impacts and benefits.

Our Russellville plant is situated on approximately 1,200 acres of land and features a “zero-discharge” wastewater treatment system using a system of physical, chemical and biological treatment prior to land application on farmland. This keeps approximately 500 million gallons of treated wastewater from being discharged into the stream each year.

In the “zero-discharge” process, water used in processing operations undergoes several phases of treatment before being sprayed over 454 acres of coastal Bermuda grass around the plant. This serves as a natural biological treatment system that uses the nutrients in the wastewater for vegetative growth and keeps these nutrients from building up in the soil.

Up to 2.5 million gallons of water are applied to the fields each day, resulting in healthy, green pastures that produce a substantial amount of hay. To manage these fields, the wastewater team at Russellville turned the land into a “cattle ranch” with a herd of 400 to 600 head of Angus cattle grazing in the pastures. In implementing this system, they took special care to ensure that local streams are protected by fencing and vegetative buffers and that the cattle do not add to erosion of pasture land. Eight hundred acres of buffer land surrounds these pastures, 80 of which have been planted with Loblolly Pine trees to serve as a windbreak, provide habitat for wildlife, and prevent erosion.

The Russellville plant has operated more than 10 years without exceeding permit limitations and also recycles 150,000 gallons of water per day for non-food contact uses.

In Dallas, Texas, our processing facility was recognized by the City of Dallas Utility Department for its efforts to reduce or eliminate the creation of nutrients during the 2007-2008 pretreatment reporting period.

We have implemented a number of water conservation programs at our Dallas facility. A water team meets monthly to identify efforts to reduce water usage, and has implemented improvements that conserve approximately 137,500 gallons of water per day. The facility increased the efficiency of energy and water usage by making equipment and process modifications, and reduced water usage by an additional 200,000 gallons per day by replacing four production lines with two more efficient lines.

Water recycling equipment has been installed at Dallas to screen production wastewater for reuse in vacuum pumps and for wash down during sanitation shifts, for an approximate water usage reduction of 200 gallons per minute or an additional 200,000 gallons per day. Future projects include the installation of hot water screens for reuse of hot water, which will reduce water usage while reducing the amount of energy required to heat water.

Water Quality Strategies

Pilgrim’s Pride Corporation has also taken a proactive role in the development of strategies to benefit the environment through the reduction of nutrient loadings in wastewater discharges.

In east Texas, we are partnering with several municipalities in the regional drainage basin through an innovative trading strategy through which we will provide all of the treatment needed to achieve the required phosphorus reduction for the entire basin in lieu of each of the individual municipalities having to implement expensive system improvements. The trading strategy will provide a more reliable approach to achieving the desired nutrient reductions while allowing significant cost savings for the users across the basin. A portion of the savings will be used to fund ongoing monitoring in the basin to measure the success of the plan.

In Moorefield, West Virginia, our processing plant Operates under Chesapeake Bay nutrient strategy initiatives that require total nitrogen and total phosphorus levels to be reduced to very low levels. We are partnering with Hardy County and the City of Moorefield to implement a regional treatment system to achieve these nutrient reduction objectives. Although participation in this regional system will be more costly than treating our own wastewater separately, we believe regional system will provide the best long-term environmental stability for the area.

Wastes and By-Products

As a good steward of the environment, one of the many things Pilgrim’s Pride must do is to be sure we are reducing waste and recycling as much as possible. Our company has grown through acquisitions over the past several years, and we are now in the process of bringing all of our facilities under a single waste management and recycling program. We are now working with a major waste management company, which is giving us valuable data and reporting capabilities to help us identify and eliminate waste at nearly 300 locations, while recovering recyclable material from the waste stream.

Each year we recycle approximately 1500 tons of plastic and cardboard, and we expect to increase this number dramatically over the next year as we identify opportunities for improvement. Each load we divert will keep this material from ending up in landfills, resourcing it into recyclable channels.

Our company is actively involved in metal recycling as well, working with a single vendor to manage scrap metal at all our company locations. Each year we recover more than 7.1 million pounds of metal as recyclable material.

Pilgrim’s Pride also practices the responsible recovery of usable protein. We operate eight protein recovery plants that produce protein meals and poultry fat used in animal feeds. These plants, which use poultry by-product materials from our processing plants and by-product material from other companies, produce more than 40 million pounds of products per week that are used as recoverable protein, rather than becoming a waste material requiring disposal in a landfill.

We are actively reducing waste in other areas, too. As a food processing and distribution company, Pilgrim’s Pride uses thousands of pallets throughout our system, most of which are made of wood. We are steadily increasing the use of plastic pallets, which are 100% recyclable, as we look for more environmentally friendly alternatives.

Our overarching goal is to assure that most, if not all, of our generated waste can be recycled for beneficial reuse. While this is an aggressive target, we believe it is achievable.

Land and Agriculture

Pilgrim’s Pride has been a longtime industry leader in the adoption of policies and technologies that minimize the impact of poultry growing on the environment.

On-Farm Water Quality Management Plans

One of the most important ways we minimize environmental impact is through water quality management plans. We recognized in the early 1990s that the traditional methods of land applying poultry litter based on nitrogen loadings – as had been recommended by federal agencies and universities for years – was not sustainable. More than 10 years ago, we began a policy of requiring our contract growers and our company-owned farms to manage litter land application using water quality management plans and agronomic-based loading rates. We emphasize proper handling and management of litter and flock mortality, and we require compliance with all state and local environmental laws and regulations. Today, essentially all of our growers operate under water quality management plans. We believe the implementation of best management practices in these plans has allowed us to significantly reduce our contract growers’ impact on the environment.

Beneficial Use of Poultry Litter

Litter generated on contract farms is reused as a fertilizer on pasture and crop land. As we continue to seek alternative opportunities to manage litter responsibly, we have evaluated many processes including “litter-to-energy” programs. We are continually evaluating the feasibility of these types of systems and will implement them where environmental issues and/or costs indicate such a system is a necessary and practical option. In the meantime, we will work to ensure that poultry litter is stored and land applied for beneficial reuse under technically sound water quality management plans on Pilgrim’s Pride contract growout farms.

Poultry Feed Supplements

Another of our company’s proactive environmental efforts is in the area of feed supplements that reduce nutrients in poultry litter. Throughout the years, Pilgrim’s Pride has used different types of feed supplements at various locations. One of the benefits of these supplements is to reduce the potential for nutrient runoff by limiting the amount of nutrients that make their way into poultry litter.

In 2007, Pilgrim’s Pride, along with other poultry companies in the Shenandoah Valley of Virginia, entered into a Memorandum of Understanding with the Commonwealth of Virginia to use a feed supplement to reduce the amount of phosphorus contained in poultry litter by as much as 30%. This phosphorus reduction helps balance the amount of nitrogen and phosphorus to levels more in line with the nutrient requirements of pastures and crops. This allows litter to be a more valuable and beneficial organic fertilizer by balancing it to meet crop nutrient needs.

Transportation

As the price of oil continues to fluctuate, we are taking aggressive steps to improve fuel efficiency and conserve fuel company-wide.

One of the things we have done to help conserve fuel has been to install GPS tracking systems in our over-the-road trucks. These systems allow us to monitor speed, distance, time, fuel usage, and even rapid deceleration and hard starts, giving us valuable data to help us improve fuel efficiency and fleet safety.

We have implemented a policy to reduce idle time to help save fuel, because it takes approximately one gallon of diesel fuel per hour to idle a tractor-trailer. We are currently testing a two-cylinder diesel auxiliary power unit that can reduce our fuel usage by 80% during idling. We’re also evaluating a new electric auxiliary power unit that uses an environmentally friendly absorbed glass mat (AGM) battery that contains no free liquid, doesn’t cause corrosion, and can never leak acid.

We’re now in the process of converting our driver vehicle inspection reports to an electronic process, which will not only make this process more efficient, but will have the added benefit of reducing our paper purchases by thousands of pounds per year.

We are also developing metrics that will allow us to determine the “food miles” required for the transport of all of our raw materials and all of our finished products. By implementing these and other measures, we anticipate that we will be able to improve fleet fuel efficiency by as much as 20% over the next four years.

Packaging

Packaging materials are a significant factor in waste generation at the processing plant, the distribution center, the retail store or restaurant, and in the home. Our retail and foodservice customers don’t want us to send them any unnecessary packaging. Consumers are becoming increasingly aware of packaging waste as well.

We realize that if we send a customer a box they can’t recycle, they have to pay for it twice: once when they receive it as part of their order, and once to throw it away – not to mention the cost of fuel to haul the wasted packaging material to a landfill. So we are attacking this problem in two ways: 1) by reducing the amount of waste in our packaging, and 2) by assuring that as much of our packaging as possible is recyclable.

While we still have opportunities for improvement in this area, we have already realized some significant benefits. We have greatly reduced the quantities of wax-coated boxes that are used to ship finished products to customers, replacing many of them with a new 100% recyclable “fiber shield” box. We have eliminated about 20 to 25% of our wax-coated boxes, replacing them with fiber shield packaging, and we continue to convert to these new boxes whenever possible. This has made it possible for our customers to recycle these materials, rather than paying to throw them away.

We have also replaced the Styrofoam trays on some of our products with recyclable plastic bags. This has significantly reduced the amount of landfill space needed for the disposal of non-recyclable trays, and has reduced diesel usage and resultant CO2 emissions by reducing the number of trips to the landfill.

While we are often limited in our ability to use recycled material in our product packaging due to food safety regulations, we continue to make improvements in this area. For example, while we are required to use 100% virgin material for the clear film that covers our fresh traypack chicken sold in retail stores, we have reduced the amount of polyethylene we use by more than 312,000 pounds per year. This was accomplished by switching to a new film that is made of lighter-gauge material, but is just as strong and leak-proof as the original film.

As we continue to look for new and improved packaging alternatives, we anticipate that we will be able to reduce packaging wastes and achieve associated fuel usage and GHG emission reductions by 5% or more over the next six years.

Energy

Energy conservation is a key priority in our enviropride strategy. Our hatcheries, feed mills, processing plants, protein conversion plants and distribution centers all use significant amounts of electricity, natural gas, and/or fuel oil. In order to manage our energy usage effectively, we have contracted with a major national firm to track our energy usage and manage our utility bills.

We are working to reduce our total energy dependence in a number of ways. We have conducted a company-wide energy efficiency assessment to help develop a comprehensive strategy for reducing energy consumption and environmental emissions. In just one of our facilities, we identified opportunities for a 14% reduction in energy consumption equivalent to $3.3 million in annual energy cost reductions.

As energy costs continue to soar, biofuels are gaining increasing importance as an alternative energy source. Our company is currently using poultry fat as a fuel source at two company locations, where it is used to heat water for our chicken-processing plants. The boilers at these locations have the ability to use natural gas, low-sulfur #2 heating oil, or biofuel (poultry fat), and can use the most cost-effective source depending on market prices for these fuels.

While this is promising, biofuels are just one of the potential uses for recycled poultry by-products, which can take other forms including ingredients for animal and pet feed. We currently sell about a million pounds of poultry fat per week to outside vendors who use the material to produce biofuel, while the remaining material is converted to fats and oils for feed rations.

In continuing to identify new ways to conserve energy, one of the technologies we have tapped is the use of heat-recovery systems in our protein recycling plants. Vapor from the cooking process is captured in a heat exchanger, which uses 280-degree steam to produce hot water. This process can provide up to 300,000 gallons of hot water to our processing operations each day.

We are currently researching the potential for firing boilers using wood waste, a sulfur-free fuel source with the potential to burn cleaner than natural gas. Our alternative energy team continues to study conservation, biofuels and solar energy in order to find new ways to apply energy-saving technology to our business.

Facilities

Most of our facilities are of significant size and require a variety of materials for construction and maintenance. We are currently assessing all existing facilities for opportunities to minimize energy consumption and optimize the use of building materials that offer superior environmental benefits. All new facilities will be evaluated and constructed to achieve LEED certification by 2010. The Leadership in Energy and Environmental Design (LEED) Green Building Rating System™ encourages and accelerates global adoption of sustainable green building and development practices through the creation and implementation of universally understood and accepted tools and performance criteria.

Our World Headquarters Park office building, which opened in 2005, was designed to conserve energy and minimize environmental impact. It features an air conditioning system that uses chilled water instead of chemicals, with a variable-frequency drive that adjusts amperage for energy savings. Other energy-saving enhancements include windows that are double-paned and double-coated, and motion detectors that turn off lights when an office is vacated.

Supply Chain

Our focus on sustainability doesn’t just end with us. We are engaging our supply chain partners to limit our shared environmental impact. We are working with them to reduce wastes through optimization of packaging materials for items shipped into our facilities, and to implement sustainability programs with them as well as with the partners in their supply chain.

We are currently in the process of compiling information from all of our vendors to assess their environmental responsibility in regard to water savings, recycling, emission reduction and other areas. We will be working closely with them to help us understand what we can do to improve, and we are asking them to engage their vendors and suppliers in this effort as well.

Our Future: Sustainable Progress

Our commitment to environmental stewardship has always been strong, because as an agriculturally based company, Pilgrim’s Pride has always understood the importance of respecting and protecting the land, air, and water resources we are afforded the privilege to use.

The Pilgrim’s Pride enviropride Sustainable Progress system will continue to build on this foundation, allowing us to continue to grow to meet the needs of our valued customers while conserving environmental resources for future generations.

Pilgrim's Pride environmental policy

Pilgrim's Pride senior chairman's statement