November 6,2018
Zacky Farms, the family-owned turkey processor based in Fresno is closing their doors. Their website said recently “It comes with great sorrow that Zacky Farms has announced that it will be winding down its operations. Zacky has struggled in the current state of the industry and it has been impossible for it to continue profitably.” The company says they will close as of January 19,2019. The business was founded by the Zacky family in 1928.
Today only 84 year old Lillian Zacky remains to run the show.
Now an auction firm employed by the lender will sell off the equipment, rolling stock and the trade name. GemCap Lending will hold a secured party public sale to the highest and best bidder for cash November 15, 2018 at 9:00 a.m. Pacific Standard Time on the telephone.
Meanwhile the company has sent a letter to the Fresno EDD that of the 475 Valley jobs being lost, 323 are in the Fresno area. Zacky has also closed the Stockton plant that employed 152. Employees on ranches around Fresno including one in Kings County, are also being laid off.
Just what the reasons for the closure are could be multiple. Some wonder if the expected passage of Prop 12 this month expected to raise the cost of bird operations in California may have been factor.
Others suggest there was no succession in this family operation once Lillian Zacky steps down.
Then there is those low turkey prices that may be key as well. Like so many Valley crops, like milk, a surplus of product has led to depressed prices and red ink.
USDA says both frozen and fresh turkey prices remain well below the US three-year average in 2018 (see chart). Fresh turkey at $1 lb compares to $1.30 to $1.40 lb in past years. This info is as of November 2,2018.
But California Poultry Federation president Bill Mattos says other California turkey processor he has talked to are “doing well.” State growers and processor produce just 30% of the turkey we eat in California with the entire crop sold off by Thanksgiving.
The coming of Thanksgiving could be perhaps the key time factor Zacky used to decide when to pull the plug on their operation at this time.
Back in October 9, 2012 Bloomberg News Service announced Zacky Farms LLC, a Fresno, California-based poultry producer, filed for chapter 11 bankruptcy with plans to reorganize after removing partner, Richard Zacky. Zacky Farms came out of the bankruptcy in 2014 and owned entirely by Lillian Zacky, Robert Zacky’s widow.
Then last month Zacky Farms LLC announced that they will be winding down operations and shutting down the Fresno, California location. Lillian Zacky, CEO of Zacky Farms LLC, had stated in an email to employees at the Fresno, California location, “After four generations and an enormous effort to keep the company in sync with the fast pace of changing times, we no longer are able to keep up with business as usual. We have put our best foot forward but as we struggled in the current state of the industry conditions, it has been impossible for us to continue profitably”.
Having gone through bankruptcy before – tight margins again this year may have tipped the scales on the timing of this decision.