The loss is due in part to high feed prices as the price of corn, an important feed, has surpassed a record $US6 per bushel. To cope, Smithfield is reducing hog production and has focused on producing more profitable packaged foods.
The hog unit had an operating loss of $US129 million, compared with a year earlier profit of $US40.6 million. A loss on hogs had been expected and the company has responded by reducing production. It previously said it will reduce its sow herd by 4 to 5 per cent.
To improve earnings, Smithfield Foods, like other meat companies, has been working to convert more of its fresh meats into higher-priced and more profitable packaged foods.
In addition to hogs and pork, Smithfield produces beef and Butterball brand turkeys and is part owner of the nation’s largest cattle feeding business. Related website
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