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Smithfield Deal Examined By Senate Committee

Smithfield Deal Examined By Senate Committee

Jul 12, 2013: Spencer, IA: During this week’s Senate hearing on the long-term implications of Shuanghui International’s acquisition of Smithfield Foods, Ag Committee Chair Debbie Stabenow wanted to know how the proposed deal would affect the U.S. food supply, its security and safety. Stabenow said this deal might be the first acquisition of a major food and ag company, but she added, “…I doubt it will be the last.”

Daniel Slane, with the U.S. Chamber of Commerce, warned that China’s “end game” is to dominate the U.S. domestic pork market. He says China will take Smithfield’s state-of-the-art technology and convert their production from backyard farms to industrial scale production. Slane charged that, once the Chinese “digest all of this and get their industry up, they’ll try to export it to us.”
Smithfield CEO Larry Pope testified that the business side of things wouldn’t change. He said all management, contracts and processing plants will remain the same.

Stabenow asked Pope what’s to keep China from exporting pork to the U.S. or to other major export markets like Japan. Pope replied that the Chinese are not interested in exporting pork to the U.S. since their domestic protein needs are so high.

Chinese pork consumption per capita has grown by 25% in the past 15 years, while U.S. consumption shrunk by 10%. China is responsible for 50% of the world’s pork consumption.

Pope repeatedly stressed that China is concerned about ensuring future food supplies, not taking over global pork trade. But Stabenow replied, “….Mr. Pope, they could feed their people by opening their markets to U.S. pork products.”