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Smithfield forced to increase its prices

Smithfield Foods Inc. is raising its own prices to compensate for the rising raw material costs, according to Robert W. Manly, a Smithfield executive vice president speaking at the Wachovia securities 2007 Nantucket Equity Conference.

"It's very, very critical that we move our prices up," Manly said. "We've been able to do that at this point." Besides handling corn prices, Manly said the company plans to expand its international operations, particularly in growing emerging markets like Romania.

More pigs
He added Smithfield plans to increase its pig production to lower costs. The company is looking to produce up to 2 million pigs per year. He also said the meat producer is hoping to increase its profit to 10 cents per pound of meat produced. Currently, the company produces about 3 billion pounds of processed meats in the U.S. and makes between 4 cents and 6 cents per pound.

Demand for ethanol
Corn prices have gone up significantly recently as demand for the alternative fuel ethanol has increased. Both ethanol and animal feed are made with the grain.

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