Pilgrim's Pride shares fell to a new low at US$16.87 on Monday (June 16, 2008), down 8.3 percent after an analyst cut its rating on concern that chicken prices have not increased enough to overcome rising feed costs.

The intraday low of US$16.43 is Pilgrim's Pride lowest level since January 2004.

Credit Suisse cut its rating for Pilgrim's Pride from outperform to neutral and lowered its price target on the stock to US$19 from US$33.

In April when corn was US$6 per bushel, chicken breast meat had to be sold at US$2 per pound to offset rising feed costs. However, corn prices are now at US$7.35 per bushel and could go on to US$8 due to bad weather in the Midwest, which is hurting this year's corn yield, said analyst Robert Moskow.

Chicken prices would have to rise 23 percent to offset rising feed costs and get Pilgrim's Pride back to a normal margin, according to Moskow.

However, Moskow warned that though consumers are relatively comfortable with pricing of 15 percent, it is unknown how they would react when Pilgrim's Pride needs to rise more than that.

Meanwhile, stocks of other companies also fell with Sanderson Farm down 5.7 percent to US$40.56, Smithfield Foods down 6.5 percent at US$23.43 and Tyson Foods down 2.5 percent at US$14.58.