SUPPLEMENT DATED FEBRUARY 11, 1998
TO THE PROSPECTUS DATED OCTOBER 27, 1997
Recent Developments Through Second Quarter Ended December 27,
1997
For the six months ended December 27, 1997, the Association
reported a net loss of $71.7 million. The net loss was
primarily the result of high feed ingredient costs related to
continuing losses experienced in the Association's forward
purchasing and commodity trading activities for the second
quarter, lower poultry selling prices and losses in cotton
ginning and marketing. U.S. poultry prices are under pressure
from large meat supplies and uncertain prospects for exports
in 1998 due primarily to the financial crisis in Asian
countries. Continued price volatility in feed ingredient
costs could result if unfavorable weather conditions
negatively impact production.
In December 1997, the Association established a $440 million
unsecured credit facility that includes a five-year $132
million revolving credit commitment, a $132 million 364-day
line of credit and a six-year $176 million term loan. Due to
higher-than-expected net losses sustained in the six months
ended December 27, 1997, the Association was in violation of
certain loan covenants associated with these facilities and
received waivers of these covenants in connection with a
restructuring of the credit facilities. The Association
anticipates that the restructured credit facilities will
result in increased borrowing costs, and will be secured with
the Association's assets. The restructured revolving credit
and term loan facilities are expected to have three year terms
and to limit the availability of short-term and long-term
financing and capital expenditures. The Association will
likely be required to apply excess cash flow to the three year
term loan.
