In terms of position shifts, the most notable was easily JBS USA swapping rankings with Cargill Meat Solutions. The shift was precipitated by the emergence of Pilgrim’s Pride from Chapter 11 bankruptcy protection in late December, which was facilitated by issuing 64 percent of its common stock to JBS USA Holdings, Greeley, Colo., for $800 million in cash. The deal made JBS USA the majority shareholder of the poultry-processing giant and pushed it to No. 2 on this year’s list, with estimated annual sales of $20.9 billion (which includes Pilgrim’s estimated sales of $8.5 billion).
Acquisitions also occurred among the medium-sized companies, with one deal announced as recently as this past month. In a transaction valued at approximately $130 million, Sofina Foods announced plans to acquire No. 63 ranked Lilydale Inc., based in Edmonton, Alberta. The combined revenues of the two companies will push Sofina up in the rankings by approximately 30 positions, as officials estimate combined revenues to top $800 million annually while employing more than 3,300 workers.
Maintaining its No. 1 position, Springdale, Ark.-based Tyson Foods saw its margin of difference between sales of its closest competitor shrinking from $11.9 billion in 2009 to $5.6 billion on this year’s list. The previous several months have seen sweeping changes in Tyson’s management team and continued reorganization of its plants. While Leland Tollet led Tyson as interim president and CEO throughout much of 2009, the company promoted Donnie Smith to step in for Tollet in the leadership position in November, while also appointing Jim Lochner to chief operating officer. This past January, Tyson announced it would eliminate about 480 positions at its Council Bluffs, Iowa pork and beef plant and shift that production to its facilities in Tennessee and Texas. In early February, Tyson’s new CEO reported the company posted net income of $160 million, during the first quarter of fiscal 2010, ended Jan. 2. The profit compared with a loss of $102 million in the same period a year ago, which gives stockholders and analysts reasons for optimism in 2010.
Other top companies, including Smithfield Foods Inc., Smithfield, Va., have also made news of late as they streamline operations and strive for profitability in the face of a surplus of supply and slumping demand. This past January, Smithfield announced it sold its RMH Foods business back to an investment team led by the Rocke family. The same day, the company announced the sale of the Maverick Food Co., its Chinese joint venture to COFCO Limited, China’s largest national processing firm. In the last several months, Smithfield also recently announced it would cease operation of several facilities, including: The John Morrell & Co. plant in Sioux City, Iowa, which will close this April; and its “South” plant, located a few miles from its headquarters.
Despite a squashed acquisition deal in early 2009 that would have seen National Beef Packing Co., Kansas City, Mo., (ranked No. 11 again on this year’s list) become a subsidiary of JBS USA, plans were announced for the company to raise money through an initial public offering. Officials subsequently announced this past December it would postpone the offering, citing weakness in the IPO market. Nonetheless, National Beef reported increased sales on its survey for this year’s list, with $5.7 billion, compared with $5 billion reported for last year’s ranking.
Compiling the data for the “Top 125 Processors” list each year is a daunting task requiring months of preparation and countless hours of paper-shuffling of hundreds of fax pages, e-mails and phone records. This is all masterfully managed by M&P’s database manager, Dianna Freeman, who has already started work on the 2011 list. To receive a survey for future lists, please send a request to: firstname.lastname@example.org.