On May 1, a local TV station in northern Missouri, KTVO-TV, working from an anonymous tip allegedly from a Smithfield employee, reported that Chinese-owned Smithfield Foods was planning to close 37 sow farms in Putnam and Mercer counties.
Smithfield, the world’s largest pork producer founded in Smithfield, Virginia, 85 years ago, was bought in 2013 by Shuanghui International, China’s largest pork producer, now called WH Group. According to industry reports, Smithfield has 132 company-owned farms and 109 contract farms in Missouri, along with a leased farm, eight feed mills and a pork processing plant.
National Hog Farmer reported that according to Chinese sources, WH Group told shareholders and potential investors in April that the group expected a 56% drop in its first quarter 2023 profit outlook, down from $395 million for the same period in 2022. In a filing with the Stock Exchange of Hong Kong, the owner of Smithfield Foods said the decrease, before biological fair value adjustments, was due to “challenging market conditions” in the United States pork segment.
Smithfield agreed last July to pay a $42 million settlement over allegations of pork price fixing. The lawsuit accused the company of improperly controlling pork prices by limiting hog supplies and inflating prices over more than 20 years. The company had previously settled a price-fixing suit for $83 million without admitting wrongdoing.
The March Quarterly Hogs and Pigs report from the U.S. Department of Agriculture reported that 2023 pork production forecast was reduced about 50 million pounds to 27.36 billion pounds, up 1.4% from total production last year. Some ag publications report that industry analysts are looking for a lower herd total to aid prices.
David Murray can be reached at [email protected].
