News 817 views last update:Aug 27, 2007

Pork sales help increase Smithfield profits

Growing sales in pork - and beef - have helped more than double Smithfield Foods' profits in the fiscal first quarter of 2007.

Net earnings for the quarter that ended July 29 were $54.4 million, up from $24.6 million.

Sales increased 23%, reaching $3.36 billion, pork sales hit $2.23 billion, up from $1.74 billion.

Smithfield CEO C. Larry Pope said in a press release, "Given the challenges of higher grain costs and the continued adverse fresh pork environment, I am generally satisfied with our performance in the first quarter."

The pork segment's packaged meat volume grew 28%, primarily the result of the company's acquisition of the Armour-Eckrich processed meats business from ConAgra Foods during 2006.

More CSF
This week it was revealed that a third Smithfield farm in Romania was contaminated with Classical Swine Fever (CSF), causing the company to kill all 15,000 animals. The farm is located near Igris, in West Romania, near the Hungarian border.

Another 18,000 pigs in the neighbourhood will also be slaughtered for precautinary reasons.

Only recently, two more farms in Romania had to be emptied after CSF outbreaks, leading to the slaughter of 36,000 animals and perhaps $4 million to $5 million.

Despite the fact that the spread of Classical Swine Fever (CSF) at Smithfield's hog farms in Romania may prove troublesome in the future, Pope said: "I continue to be pleased with the progress we are making in Western Europe and Poland."

"This most recent setback in Romania is disappointing and will certainly impact our results in that country for some time going forward. However, we remain committed to our Romanian strategy."

Related websites:
• Smithfield Foods
• ConAgra Foods

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