Pope optimistic about Smithfield's position
September 2, 2010
by Meat&Poultry Staff
WILLIAMSBURG, Va. – Smithfield Foods Inc. is back in the black after suffering two years of losses, announced C. Larry Pope, president and chief executive officer, at Smithfield’s annual shareholders meeting held Sept. 1. "All parts of the business are profitable, and solidly profitable...It looks to be pretty good times well into the future," HamptonRoads.com quoted Pope as saying.
One caveat, Pope said, could be overseas grain shortages, which could drive up feed costs.
Contrary to how other executives may feel about the possibility of a double-dip recession, Pope said he is less worried because “recessions are usually good for the company. We're in the protein sector, where people have to eat, and we're in the moderately priced protein sector."
Negatively impacted by high grain costs and low hog prices, Smithfield lost $198 million in its 2009 fiscal year and $101 million in fiscal 2010. Smithfield’s turnaround plan included closing seven plants and downsizing its sow herd by 13%.
In other news, Pope said Smithfield has not received a response to its $200 million offer to buy out its partner in the Butterball LLC turkey business. Smithfield owns 49% and Maxwell Farms Inc. owns 51% of Butterball. Maxwell Farms' deadline is Sept. 11. If it rejects the offer or does not respond, Pope said Smithfield will pull out of Butterball.
Shareholder resolutions targeting environmental and animal-rights causes were defeated. But Pope said Smithfield had recently begun converting from gestation crates to more spacious "group housing" for pregnant pigs. In 2007, the company announced it would phase out the gestation crates by 2017, but later added the economy would force a delay.