Cargill buys Smithfield hog production facility

by Meat&Poultry Staff
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WICHITA, Kan. – Cargill’s Wichita-based pork business has completed a transaction to acquire a 21,500-acre hog production site near Dalhart, Texas, from Smithfield Foods Inc. for approximately $33 million. Idle since spring 2010, the facilities will be used to produce hogs that will be transferred to Midwest-based grow-out facilities after they are weaned. They will then be processed at one of the company’s two pork-processing plants in Beardstown, Ill., and Ottumwa, Iowa.

“The sale of this hog production facility is a further extension of our strategy to reduce exposure to commodity businesses and shed non-core assets," said C. Larry Pope, Smithfield president and CEO. The Dalhart facility was depopulated in August 2009 as part of the company's sow herd reduction initiative.

“In considering this site, we carefully examined factors that are important to us for long-term viability, such as environmental stewardship and animal welfare practices,” said Dirk Jones, president of Cargill Pork. “Evaluation of a strategic decision such as this requires that we consider what is right, and best, for the community, the animals, the environment, our customers and our business.”

In addition to sow inventory that will be introduced to the property, Cargill Pork plans to make more investments to improve and expand existing assets on the property, as well as add infrastructure as required. The first group of animals from the site is expected to be harvested in 2012, with the number increasing annually for several years. The site will employ approximately 272 people once fully operational.

“Acquisition of the property near Dalhart will allow us to have better control over the health and quality of animals raised for our premium pork programs, while also helping us better control our costs and ensuring a high level of bio-security that comes with a remote site,” said Jeff Worstell, vice president of livestock production with Cargill Pork. “This is a move that is strategic to our business going forward as global demand for pork continues to increase and we seek ways to improve our productivity, add value for our customers and provide consumers with nutritious protein they enjoy eating.”
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