DOCSLIB.ORG

Smithfield and Shuanghui: Two Pigs in a Blanket?

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Smithfield and Shuanghui: Two Pigs in a Blanket? June 3 • 2013 ONLINE EDITION BUSINESS Smithfield And Shuanghui: Two Pigs In A Blanket? BY JACK PERKOWSKI CONTRIBUTOR t may not be the oldest profession to Walmart, Walgreens, Wegmans, ShopRite, For example, one of the critical stages of in the world, but pig production has and Rite Aid in the U.S., the long-term plan pig production is producing weaned pigs to be up there in terms of history. is to export these vitamins to China. “They from a sow, and this process has been per- China has been producing pigs for [Chinese consumers] have the perception fected in the U.S., which had to improve the more than 2,000 years, well before that ‘U.S.-made’ is a premium product, has productivity of its agricultural sector long Ithe United States was even a gleam in the high quality and high efficacy, is more trust- ago in order to remain globally competitive. eyes of the Founding Fathers. So, how can ed,” according to IVC’s CEO Steven Dai. The objective of a sow farm is to produce the largest pork producer in the U.S. offer In the case of IVC, Alere stockholders a steady supply of weaned pigs that weigh credibility and technology to China’s larg- benefitted because Alere received cash for a approximately six kilograms, a process that est meat processor? Even in this most basic business that presumably no longer fit into takes 21 days to complete. In the next stage of industries, the $4.7 billion ($7.1 billion the company’s long-term strategy. In Smith- of production, the farmer feeds the pig to in- including debt) offer for Smithfield Foods, field, stockholders are benefitting directly crease its weight to 125 kilograms, at which Inc. (NYSE: SFD) announced on May 29 by by receiving a 31 percent premium on their point it is ready for market. Shuanghui International, illustrates how shares. All of this for the stock of a company In the U. S., sow farms are managed in this U.S. acquisition will not only enhance whose customers are in a mature American such a way that each sow can produce 22 or Shuanghui’s image in China, but will also meat market where consumption has been more pigs per year. In China, sows produce bring valuable know-how and technology shrinking for four consecutive years, accord- only 14 on average, nearly 40 percent less. to the company. ing to the Department of Agriculture. Adopting the management practices that In our recent post, “Feeding China’s Popu- Like IVC, Shuanghui will benefit from Smithfield uses in producing 15 million pigs lation,” we noted that China is facing major Chinese consumers’ positive image of per year is only one example of how Shuang- challenges producing a sufficient supply American-made products. Not only will its hui will have access to advanced technology of safe food for its 1.3 billion people. More- Smithfield subsidiary find a ready market in from Smithfield. There will be many other over, recent food scares have made Chinese China for those products, but Shuanghui’s similar instances where Smithfield’s know- consumers extremely wary of anything that China-produced products are also likely to how will benefit the company. is produced in China and ingested into the benefit from the company’s ownership of Taking the IVC and Smithfield deals human body. As a result, we predicted that Smithfield. Chinese consumers would be together, investors, farmers and the local Western companies and economies will be right to assume that at least some of Smith- governments in the U.S. will be prime benefi- major beneficiaries of these challenges as field’s safety and food production practices ciaries of the negative image that “Made In Chinese consumers search for safer products. will ultimately also be transferred to Shuan- China” has in food and other products taken International Vitamin Corporation (“IVC”), a ghui’s Chinese facilities. by mouth. Apart from the acquisition prices privately owned, New Jersey-based vitamin In addition to having access to Smithfield’s paid by Chinese companies, American farm- company, and the deal for Smithfield are two quality systems, though, Shuanghui will also ers will benefit from increased demands for examples of how this is already playing out. benefit from Smithfield’s know-how in pig their production, and local governments will IVC was founded in 2010 when a group production. Although China has a domestic benefit from the new jobs that are created as of Chinese investors bought the vitamin herd of 476 million pigs, approximately one- a result of increased export sales realized by and nutritionalPRINTED supplement business COPY from halfFOR of the global PERSONAL pig population, China has READINGfactories in their cities ONLY. and states. Alere Inc. (NYSE: ALR) for $63.4 million. been a net importer of pork since 2008. A big This is the beginning of an important new AlthoughNOT all of the production FOR at DISTRIBUTION.IVC’s New part of the problem is in the productivity of trend — look for more transactions like IVC Jersey facilities in New Jersey currently go China’s pig farming industry. and Smithfield in the future. F From the Forbes Contributor Network and not necessarily the opinion of Forbes Media LLC. (#77598) Reprinted with permission of Forbes Media LLC. Copyright 2012. To subscribe, please visit Forbes.com or call (800) 888-9896. For more information about reprints from Forbes, visit PARS International Corp. at www.forbesreprints.com .
Load more

Recommended publications
  • Improving the Quality of Pork and Pork Products for the Consumer
    Improving the quality of pork and pork products for the consumer Q-PorkChains final report September 2012 Improving the quality of pork and pork products for the consumer: Development of innovative, integrated, and sustainable food production chains of high quality pork products matching consumer demands. Q-PorkChains was an integrated five-year project part of the diet in the EU. In several of the mem- funded under the 6th Framework Programme for ber states the proportion of pork exceeds 50 % of Research and Technological Development. The all meat consumed. But Europe faces increasing project started in January 2007 with 44 partners competition with regard to pork production and from 15 EU countries, 1 partner from Norway and the subsequent processing and retailing of pork the USA respectively and 4 partners from INCO products. China, Brazil, USA and Canada are chal- target countries (China, Brazil, and South Afri- lenging the European Union’s self-sufficiency and ca). An open call in the 3rd year of the project leading position in the pork sector. Additionally, supplemented the consortium with additional 13 European consumers are becoming increasingly partners, 1 research organisation and 12 Small sophisticated, demanding and powerful. They re- and Medium Enterprises (SMEs) which further quire foods that are of high quality, safe, diverse developed and applied Q-PorkChains’ results in and healthy. Preferably they should be produced pilot projects. environmentally friendly and respect ethical as- pects such as animal welfare issues. The underlying rationale for the project is to be In order to defend the position of the EU and to found in the dramatic changes in the internatio- explore new production and market opportuni- nal pork market over the past decade.
    [Show full text]
  • Contributing to Solve Issues in the Domestic Livestock Industry for Sustainable Food Supply for the Next Generation
    Special Feature Contributing to Solve Issues in the Domestic Livestock Industry for Sustainable Food Supply for the Next Generation The stable production of safe and reliable fresh meats has become a major concern for sustainable food supply for the next generation, as the risk of stable food supply increases due to epidemics and climate change. The NH Foods Group is covering all aspects of meat production from upstream to downstream, that is, from stockbreeding to food processing, as well as distribution and sales. Thus, we decided to contribute to revitalizing the livestock industry and to provide a stable supply of fresh meats through the Smart Pig Farming Project and the development of a detection test kit for the foot-and-mouth disease (FMD) virus. ase 1 C Smart Pig Farming Project Contributing Improving labor productivity at farms has become a big issue. In December 2018, the to workstyle reform NH Foods Group companies and NTT DATA Group companies teamed up and launched and improved a project—Smart Pig Farming Project—utilizing AI and IoT technologies for pig farming productivity business. Verification tests are being conducted at farms of the NH Foods Group, to achieve highly productive farm operations. The goal is to put the smart pig farming at farms system into operation within the NH Foods Group by 2022, and to provide farms outside the Group with the system by 2024. Improving Labor Productivity NUMBER OF PIG FARMS IN JAPAN, NUMBER OF BRED PIGS, NUMBER OF BRED PIGS PER FARM (Farms) (Pigs) Is an Issue for the Livestock 60,000 12,000,000 Industry 40,000 Decreasing number Expanding size 8,000,000 In Japan, the number of pig farmers is of farms of farms 20,000 4,000 decreasing, and the number of pigs per farm is increasing these days.
    [Show full text]
  • Read Our Fact Sheet on the PIGS
    Factsheet The PIGS Act Ending the use of extreme confinement of mother pigs What Does the Pigs in Gestation Stalls (PIGS) Act Do? This bill would ban the use of gestation stalls (also known as “crates”) for housing pregnant pigs and require that they have at least 36 square feet of space and the ability to lie down, stand up, and turn around freely. The two-foot by seven-foot crates currently used in the industry are so restrictive that pregnant pigs are essentially immobilized – sadly, they spend most of their lives kept in these horrific conditions. By forbidding this extreme form of confinement, Congress will level the playing field for all producers (nearly a dozen states restrict the practice and dozens of retailers have pledged to buy pork only from crate-free operations) and give consumers more confidence about the pig industry’s animal welfare standards. Why Support the PIGS Act? Keeping Pregnant Pigs in Extreme Confinement is Inhumane A breeding pig may spend up to three years intensively confined in a crate, and that’s the bulk of her entire lifespan. A pig can weigh 400 pounds, and the two-foot wide crate immobilizes her for months on end. The Humane Methods of Slaughter Act stipulates that pigs must be rendered insensible to pain prior to slaughter, and it only makes sense to have humane treatment standards for these animals for the duration of their lives. Pigs raised for meat are not kept in these needlessly restrictive crates, and neither should pregnant pigs. Major Retailers are Moving Away from Extreme Confinement Almost every major food retailer in the United States – from McDonald’s to Costco to Aramark – has agreed to phase out all purchasing of pork from farms that confine sows in gestation crates, with most policies taking effect in 2022.
    [Show full text]
  • Bad Taste (7.0)
    Smithfield Foods: A Corporate Profile The Story Behind the World’s Largest Pork Producer Critical Mass Energy and Environment Program Washington, D.C. June 2004 Smithfield Foods: A Corporate Profile The Story Behind the World’s Largest Pork Producer Critical Mass Energy and Environment Program Washington D.C. June 2004 This document can be viewed or downloaded at www.citizen.org/cmep Public Citizen 215 Pennsylvania Ave., S.E. Washington, D.C. 20003 USA tel: (202) 546-4996 fax: (202) 547-7392 [email protected] www.citizen.org/cmep © 2004 Public Citizen. All rights reserved. Public Citizen, founded by Ralph Nader, is a non-profit research, lobbying and litigation organization based in Washington, D.C. Public Citizen advocates for consumer protection and for government and corporate accountability, and is supported by more than 150,000 members throughout the United States. Smithfield Foods: A Corporate Profile When it’s not violating U.S. water pollution and labor laws, Smithfield Foods, Inc. is gulping up its American and foreign competitors in the meat packing industry. Not content with being the world’s largest pig producer and seller of processed pork, Smithfield, as one newspaper described it, is the company that “still wants to be the biggest hog at the trough.”1 In the meantime, as its hunger to absorb smaller pork and other meat companies around the world continues, Smithfield has been charged with violating federal anti-trust laws over a four-year period.2 But to Smithfield executives, the company’s strategy of buying out vulnerable companies is simply taking a sow’s ear and making a nice silk purse.
    [Show full text]
  • Smithfield Foods, Inc
    June 30, 2020 The Honorable Elizabeth Warren The Honorable Cory Booker United States Senate United States Senate 309 Hart Senate Office Building 717 Hart Senate Office Building Washington, DC 20510 Washington, DC 20510 Dear Senators Warren and Booker: On behalf of the entire Smithfield Foods leadership team and our 42,000 U.S. team members, I am responding to your June 22, 2020 letter concerning our company’s work to both protect the health and safety of our workforce and feed America. Thousands of members of our Smithfield Family have joined me in signing this letter because they have stood on the frontlines as our company has fulfilled its responsibility to our team members and country amid the COVID-19 pandemic. While I appreciate this chance to highlight our employees and farmers’ tremendous work in response to COVID-19, the aggressive and accusatory tone of your letter suggests your offices have already formed conclusions without an attempt to speak with us or understand the industry that provides affordable meals to millions of Americans every day. This is disappointing. This is especially disheartening after what our industry and its brave frontline workers have been through over the past several months. Your letter is fraught with misinformation about our company and industry that appears to be strictly gleaned from media outlets that have made statements and inferences that grossly mischaracterize us, our values and response to COVID-19. Moreover, your letter reveals a fundamental misunderstanding of our food supply chain, the agricultural sector and the role exports play in a healthy farm economy.
    [Show full text]
  • Bacon Processing Today
    BACON PROCESSING TODAY Roger W. Mandigo Animal Science Department University of Nebraska-Lincoln Lincoln, NE 68583-0908 [email protected] Goals • Maximize Value from the Pork Belly • Uniform, Consistent & High Quality Bacon • Good Color, Shelf Life, Consumer Value & Expectations • Greater “Consistency” - Freedom From Defects • Expand Product Development Opportunities • Compliance with Regulatory Requirements Definition • Bacon: The weight of cured pork bellies ready for slicing and when labeled as “Bacon” shall not exceed the weight of the fresh uncured pork belly. – DRY CURED - Curing materials applied in dry form to belly surfaces – IMMERSION CURED - Bellies are immersed in a curing solution – PUMPED - Machine injected • Stitch needle type • Spray needle type What Is Bacon Today? • Injected/Pumped Bacon = 97+% of bacon produced • Dramatic Change in Demand and Usage • Highly demanded ingredient for sandwiches, salads, hand held foods, appetizers, casseroles • “FLAVOR – TEXTURE – EYE APPEAL” • Bacon is a highly sought out speciality product • Condiment/Ingredient for Flavor, Texture, Eye Appeal What is the Impact of Bacon? • 108,000,000 pigs / year U.S. • $13.09 lb/pig • 1,413,720,000 lb bellies • $ 18.5 Billion • 212,058,000 lb bellies for single rib export – 15% • HOG CUT OUT DATA - (Week 5/25/2009 – Loins $76.06/cwt – Bellies $77.19/cwt – Butts $72.46/cwt – Hams $45.06/cwt TABLE 1.SLICED BACON: PROCESS FLOW DIAGRAM PROCESS CATEGORY : HEAT TREATED, NOT SHELF STABLE SLICED BACON RECEIVING RECEIVING RECEIVING NON-RESTRICTED PACKAGING MATERIALS
    [Show full text]
  • Review of Production, Husbandry and Sustainability of Free-Range Pig Production Systems
    1615 Review of Production, Husbandry and Sustainability of Free-range Pig Production Systems Z. H. Miao*, P. C. Glatz and Y. J. Ru Livestock Systems, South Australian Research and Development Institute, Roseworthy Campus, Roseworthy South Australia, Australia 5371 ABSTRACT : A review was undertaken to obtain information on the sustainability of pig free-range production systems including the management, performance and health of pigs in the system. Modern outdoor rearing systems requires simple portable and flexible housing with low cost fencing. Local pig breeds and outdoor-adapted breeds for certain environment are generally more suitable for free-range systems. Free-range farms should be located in a low rainfall area and paddocks should be relatively flat, with light topsoil overlying free-draining subsoil with the absence of sharp stones that can cause foot damage. Huts or shelters are crucial for protecting pigs from direct sun burn and heat stress, especially when shade from trees and other facilities is not available. Pigs commonly graze on strip pastures and are rotated between paddocks. The zones of thermal comfort for the sow and piglet differ markedly; between 12-22°C for the sow and 30-37°C for piglets. Offering wallows for free-range pigs meets their behavioural requirements, and also overcomes the effects of high ambient temperatures on feed intake. Pigs can increase their evaporative heat loss via an increase in the proportion of wet skin by using a wallow, or through water drips and spray. Mud from wallows can also coat the skin of pigs, preventing sunburn. Under grazing conditions, it is difficult to control the fibre intake of pigs although a high energy, low fibre diet can be used.
    [Show full text]
  • Commercial Piggery 1. WHY DO PIG FARMING?
    Commercial Piggery 1. WHY DO PIG FARMING? The challenges faced by our country in securing the food as well as nutritional security to fast growing population need an integrated approach for livestock farming. Among the various livestock species, piggery is most potential source of meat production and more efficient feed converters after the broiler. Apart from providing meat, it is also a source of bristles and manure. Pig farming will provide employment opportunities to seasonally employed rural farmers and supplementary income to improve their living standards. The advantages of the pig farming are : 1. The pig has got highest feed conversion efficiency i.e. they produce more live weight gain from a given weight of feed than any other class of meat producing animals except broilers. 2. The pig can utilise wide variety of feed stuffs viz. grains, forages, damaged feeds and garbage and convert them into valuable nutritious meat. However, feeding of damaged grains, garbage and other unbalanced rations may result in lower feed efficiency. 3. They are prolific with shorter generation interval. A sow can be bred as early as 8-9 months of age and can farrow twice in a year. They produce 6-12 piglets in each farrowing. 4. Pig farming requires small investment on buildings and equipments 5. Pigs are known for their meat yield, which in terms of dressing percentage ranges from 65 - 80 in comparison to other livestock species whose dressing yields may not exceed 65%. 6. Pork is most nutritious with high fat and low water content and has got better energy value than that of other meats.
    [Show full text]
  • Welfare Issues with Gestation Crates for Pregnant Sows
    An HSUS Report: Welfare Issues with Gestation Crates for Pregnant Sows Abstract Throughout nearly the entirety of their 112-115 day pregnancies, 80% of breeding sows in the United States are confined in gestation crates (also known as sow stalls)—individual metal enclosures so restrictive that the pigs cannot turn around. Crated sows suffer a number of significant welfare problems, including elevated risk of urinary tract infections, weakened bones, overgrown hooves, lameness, behavioral restriction, and stereotypies. Due to concerns for the welfare of intensively confined sows, legislative, industry, and corporate policies are increasingly phasing out the use of gestation crates. Introduction More than 6.1 million pigs are used for breeding in the U.S. pork industry. 1 The majority (80%) of breeding sows are confined in gestation crates 2 for nearly the entirety of their approximately four-month (112-115 day 3) pregnancies. Gestation crates are individual, concrete-floored metal stalls measuring 0.6-0.7 m (2.0-2.3 ft) by 2.0-2.1 m (6.6-6.9 ft), only slightly larger than the animal and so severely restrictive that the sows are unable to turn around.4 In typical pig production facilities, gestation crates are placed side by side in rows, often with more than 20 sows per row and 100 or more sows per shed. 5,6 The crate floors are customarily constructed with slats to allow manure to fall into a lower pit to separate the sow from her excrement. 7 Economic pressure, rather than science or animal welfare, is the driving force behind the use of gestation crate housing in the U.S.
    [Show full text]
  • U.S. Implications of the Smithfield Acquisition by Shuanghui
    A publication of the Agricultural & Applied The magazine of food, farm, and resource issues Economics Association 1st Quarter 2015 • 30(1) U.S. Implications of the Smithfield Acquisition by Shuanghui Tian Xia JEL Classification: Q13, Q17, L13 Keywords: Agricultural Exports, China, Food Safety, Market Competition, Pork The purchase of Smithfield Foods, the world’s largest hog U.S. pork exports to mainland China have increased from producer and pork processor, by China’s top pork products 2.33 million pounds in 1996 to 496.59 million pounds company, Shuanghui International Holdings Ltd., stirred in 2013, and the average annual growth rate is 34.7% concerns about domestic pork supplies and food safety in (USDA, 2014b). Chinese pork production and consump- the United States. The Smithfield acquisition will cause im- tion increased from 50.71 and 50.8 million metric tons in portant changes in U.S. pork exports to China, consumer 2010 to 55.6 and 56.1 million metric tons, respectively, concerns about food safety of pork products, and competi- in 2013. Imports accounted for only 0.8-1.4% of Chinese tion in Chinese and U.S. pork markets. pork consumption during the 2010-2013 period (USDA, 2014c). So China has been satisfying its increased demand U.S. Exports to China primarily through increased domestic production. How- Chinese demand for meat products including pork has ever, it will be difficult for China to maintain this tradition continued to increase as the per capita disposable income of self-sufficiency in pork as feed costs rise, and land for in China has kept rising over the past several decades (Fig- additional pork production becomes scarce and expensive ure 1a and 1b).
    [Show full text]
  • Pigs for Prosperity )$2'LYHUVLÀFDWLRQERRNOHW Diversification Booklet Number 15
    ISSN 1810-0775 Pigs for prosperity )$2'LYHUVLÀFDWLRQERRNOHW Diversification booklet number 15 Pigs for Prosperity Klaas Dietze Rural Infrastructure and Agro-Industries Division Food and Agriculture Organization of the United Nations Rome 2011 The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations (FAO) concerning the legal or development status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The mention of specific companies or products of manufacturers, whether or not these have been patented, does not imply that these have been endorsed or recommended by FAO in preference to others of a similar nature that are not mentioned. The views expressed in this information product are those of the author(s) and do not necessarily reflect the views of FAO. ISBN 978-92-5-107068-0 All rights reserved. FAO encourages reproduction and dissemination of material in this information product. Non-commercial uses will be authorized free of charge, upon request. Reproduction for resale or other commercial purposes, including educational purposes, may incur fees. Applications for permission to reproduce or disseminate FAO copyright materials, and all queries concerning rights and licences, should be addressed by e-mail to [email protected] or to the Chief, Publishing Policy and Support Branch, Office of Knowledge Exchange,
    [Show full text]
  • Inside Smithfield's Toxic Pig Farms
    INSIDE SMITHFIELD’S TOXIC PIG FARMS A DxE investigation at Smithfield Foods finds animal cruelty, suffering, carcinogenic drugs, air pollution, and death Farmland®, Armour®, Farm- Typically in the pork indus- EXECUTIVE er John®, Kretschmar®, John try, workers “thump” sick, Morrell®, Cook’s®, Gwalt- or small piglets in order to ney®, Carando®, Margherita®, kill them. Thumping means SUMMARY Curly’s®, Healthy Ones®, Mor- smashing their skulls against liny®, Krakus® and Berlinki®. a wall. An investigatory team with Direct Action Everywhere At the farms investigated, DxE In addition to being the big- (DxE), an international grass- found animal abuse and air gest producer of pigs in North roots animal rights network, pollution. When a journalist Carolina, Smithfield is also spent nearly a year (early for Vox contacted Smithfield the biggest producer of pig 2017 into 2018) investigating during his reporting of the manure in the state, which Smithfield Foods pig farms DxE investigation, a Smith- in turn has caused massive in North Carolina and found field veterinarian confirmed air and water pollution there. hundreds of animals suf- to him that the company dos- That pollution has been tied fering from what appeared es pigs with carbadox, a car- to various illnesses in hu- to be the potentially deadly cinogenic antibiotic that has mans, fish and other animals Greasy Pig Disease (Staphylo- been banned in Europe and is in North Carolina. coccus hyicus), entire rooms currently under FDA scrutiny. filled with pharmaceuticals In the state, a person who including antibiotics key to DxE rescued one pig from a removes a sick pig from a human health, and sows con- Smithfield farm, whom the in- farm without the owner’s fined in gestation crates only vestigators named Lauri, who permission can be charged slightly bigger than each pigs’ was sick with Greasy Pig Dis- with both larceny, a Class H body despite Smithfield’s an- ease, according to the vet who felony, and with breaking/ nouncement in January 2018 examined her.
    [Show full text]