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Smithfield deal reviewed

Econ101

Well-known member
Smithfield deal reviewed

Senate plans hearings after consolidation fears raised



Kevin Dobbs

Argus Leader Media

October 22, 2006



The U.S. Justice Department has begun an antitrust investigation of Smithfield Foods' plan to buy rival Premium Standard Farms of Missouri, a deal that would combine the nation's two largest hog producers.



Additionally, at the behest of Midwest lawmakers and farmers who worry the deal would hasten the consolidation of livestock markets and allow the merged company to inflate pork prices for consumers, a Senate antitrust committee is planning hearings on the matter. At such hearings, lawmakers often hear testimony from company executives and their critics.



"This merger takes place in an industry already witnessing the decline of independent family farmers and rapid consolidation in meat production and packing. If this merger goes through, farmers will have even fewer choices for selling their hogs, and consumers will certainly be affected by the deal," said Sen. Mike DeWine, R-Ohio.



DeWine chairs the Senate subcommittee that oversees antitrust concerns. He said in a recent statement that he plans to hold hearings on the Smithfield deal in the near future, and lawmakers "will need to scrutinize this deal very carefully."



A Justice Department spokeswoman would not confirm the deadline to complete the investigation. Nor has a date been set for the Senate committee hearings, according to Andrew Langworthy, a spokesman for DeWine.



But both could happen before the end of the year because Virginia-based Smithfield, which owns the John Morrell & Co. meatpacking plant in Sioux Falls, plans to finalize the acquisition in the first quarter of 2007. The company announced in September it would buy its rival for about $650 million in cash and stock.



Dennis Treacy, Smithfield vice president of government affairs, said shortly after the deal was announced that the merged companies will continue to work closely with independent producers and that he expects the Justice Department will approve the deal.



A national coalition of agriculture and consumer groups - including Dakota Rural Action and Dakota Resource Council - earlier this month lined up behind Sens. Tim Johnson and John Thune, both of South Dakota, and lawmakers from Iowa and Nebraska who called for the antitrust investigation.



If Smithfield completes the buy, it will own about 20 percent of the nation's hogs. That could limit independent hog producers' options and ability to get good prices for their meat, Johnson and Thune have said.



They worry that a mammoth Smithfield will have the power to stifle its competition, limit producers' options when it comes to selling their hogs and eventually inflate pork prices for consumers.



That, critics contend, should raise antitrust concerns for federal investigators.



Tom Buis, National Farmers Union president, said the livestock industry already is heavily concentrated, and allowing the acquisition "is only going to make the situation worse."



Smithfield's move for Premium Standard Farms is among a string of acquisitions and expensive projects the company has made this year. Last week, Smithfield announced a joint agreement with ContiGroup Cos. to build a $200 million beef processing facility in Oklahoma.



Smithfield had planned a $100 million update and expansion of its aging Morrell plant in Sioux Falls. Work was supposed to start earlier this year. But then the company launched into other projects, including the $571 million acquisition of ConAgra Foods' refrigerated meats business earlier this year.



The company since has put the Sioux Falls project on hold, and company officials have refused to provide any information on when or if the work ever will get under way.



But Ron Bell, the chief building official in Sioux Falls, said in a recent interview that, with winter around the corner, crews would have broken ground by now if they intended to start on the 232,000-square-foot expansion yet this year.





argusleader.com
 

Econ101

Well-known member
Poles Against Smithfield:
Robert F Kennedy Jr
Skorosze, Poland

Reply »
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Flag for Review
Sep 23, 2006

I am President of Waterkeeper Alliance an environmental group and a leader of a national coalition of family farmers, fishermen, environmental and animal welfare organizations, religious and civic associations, and food safety advocates who are fighting Smithfield Foods in the United States. During the past eighteen months, I have come to Poland twice to alert the Polish people about the dangers of allowing Smithfield a foothold in this country, most recently at the request of the Animal Welfare Institute.
Smithfield is one of a handful of large multinationals who are transforming global meat production from a traditional farm enterprise to factory style industrial production. Smithfield and its cronies have driven tens of thousands of family farmers off the land, shattered rural communities, poisoned thousands of miles of American waterways, killed billions of fish, put thousands of fishermen out of work, sickened rural residents and treated hundreds of millions of farm animals with unspeakable and unnecessary cruelty.
Four years ago, in 1999, Smithfield began buying slaughterhouses and state farms in Poland. On July 22nd of this year, I sat in the crowded Senate Conference Room in the Polish Republic’s Senate Building in Warsaw listening as Smithfield’s Vice President Gregg Schmidt promised the senate agricultural committee that Smithfield will “modernize” Polish agriculture and bring prosperity and jobs to rural communities.
For the past two decades, Smithfield Foods and its allies have made identical promises to the people of North Carolina, one of America’s rural states. After listening to these promises, the state Senate passed laws to make it much easier for Smithfield to do business in North Carolina.
With encouragement from these politicians, Smithfield built the largest slaughterhouse in the world in Bladen County North Carolina. The plant butchers 30,000 pigs each day. By building this pig slaughter plant, Smithfield set off explosive growth of a new way of producing hogs in North Carolina -- factory-style production.
Factory Farms
Luter who describes himself as “a tough man in a tough business” lives in a $17 million Park Avenue mansion in New York. He is known for a ruthless style that maximizes profits by industrializing agriculture and eliminating both animal husbandry and the family farm.
Smithfield builds football field-sized warehouses in which the company crams thousands of genetically manipulated hogs into tiny metal boxes where they are deprived of sunlight, exercise, straw bedding, rooting, and social opportunities. A hog is as smart and sensitive as a dog. Under these crowded stressful conditions, they must be kept alive by constant doses of antibiotics, and heavy metals. Antibiotic resistant bacteria and residues of these additives naturally end up in their waste.
Industrial Style Pollution
Since a hog produces ten times the amount of waste as a human, a single hog factory can generate more fecal waste than Warsaw. One of Smithfield’s factories in Utah houses 850,000 hogs and produces more fecal waste than New York City’s 8.5 million people. Hog waste falls through slatted floors into a basement where it is periodically flushed into giant outdoor pits called lagoons. While cities must treat sewage before discharging it, Smithfield’s meat factories dump their liquid manure untreated onto fields which quickly become saturated. The manure then percolates into groundwater or is carried by rain into nearby streams or lakes. Waste from industrial pork factories contains a witch’s brew of nearly 400 dangerous substances, including heavy metals, antibiotics, hormones, deadly biocides, pesticides, and dozens of disease-causing viruses and microbes. Antibiotic residues in this lethal soup foster the growth of deadly “super bugs”-- disease organisms that are immune to human antibiotics.
 

Econ101

Well-known member
Opinion: AG Nixon Should Intervene in Smithfield’s Purchase of PSF

By Russ Kremer, Missouri Farmers Union President and Osage County farmer

JEFFERSON CITY – Industrial livestock development by meatpacking corporations raising pork has been a controversial issue in rural America for more than a decade. During that time, the vast majority of hog production has moved away from thousands of diversified small-scale family farms and concentrated into the hands of a few corporate owners. This development has been divisive in rural communities, and has devastated independent family farmers who are dependent upon hog production as one of their key income-producing areas of farming.

Here in Missouri, this story began with the rise of Premium Standard Farms (PSF) and its ambitious growth in the Northern part of the state. Bolstered by a last-minute move in the state legislature that allowed it to get around Missouri’s anti-corporate farming law, PSF bought land and developed the largest industrial livestock production facilities in the Midwest. Their model of owning the land, the livestock and the meat processing facility completely locked existing farmers out of the system. Their high volume of manure brought serious environmental and public health risks to the surface. Their business operations brought serious bitterness to the communities where PSF operates.

New chapters are added to this sad story every year. Additional industrial hog facilities were built under contract for other meatpackers or their procurement partners in Western and Northeastern Missouri. State laws were passed to provide safeguards and community-based protections over the negative impacts of industrial livestock development. PSF struggled under constant financial turmoil, even declaring bankruptcy. In recent years, state-level safeguards have been under steady assault from industrial livestock promoters at the State Capital in order to spur industrial livestock expansion efforts.

Last week, an entirely new chapter opened in the industrial livestock tale as the world’s largest pork producer and pork packer, Smithfield Foods, agreed to purchase the second largest, PSF. If this deal is allowed to proceed, Smithfield will wield a huge amount of marketshare. With PSF’s assets in place, Smithfield will own 1.1 million sows out of the approximately 6 million sows in the nation. In addition, Smithfield will move from owning 26% of national pork processing capacity to over 31%.

These figures are shocking to most independent family farmers, and reveal the need for federal action that will mandate fair and competitive markets in agriculture. Poultry is already locked up by Tyson. Cargill controls grain. ADM controls ethanol. Now Smithfield is really the only major player in the pork industry, and they reap large advantages with this kind of market power. Federal policy that bans corporate meatpackers from owning livestock is the surest and simplest way to accomplish fair markets. This issue will certainly come up as we re-write the next federal farm bill over the coming two or three years, and family farmers hope that the Congress will do the right thing and pass the packer ban to restore competitive markets.

But in Missouri, there is also hope for local action that can stop some of the detrimental impacts of the proposed PSF buyout by Smithfield. Way back in the 1970s, in what seems like lifetimes ago in the rapidly changing agricultural marketplace, Missouri legislators had the foresight to outlaw corporate agribusiness from owning and farming land in the state. In 1993, PSF was able to play a political game and get three counties exempted from this state statute. Putnam, Mercer and Sullivan Counties became the home of PSF’s production and processing facilities. At the time, this was described as a PSF-only deal designed to improve the economy of these three impoverished rural counties.

It is now time to revisit the three-county exemption from the Missouri corporate farming law. After almost 15 years of this experiment in industrial livestock development, we can see that much of the marketing pitch for this type of agriculture has shown to be full of false promises. Missouri’s agricultural future should be based upon the strength of its vast majority of diversified independent family farmers; not a handful of corporate factories where profits flow to corporate boardrooms.

Attorney General Jay Nixon could provide the important backstop needed to slow this deal down and allow a thoughtful, democratic process to play out over such an important issue. Smithfield’s approach of gobbling up most of their competitors should concern us all. Let’s put them on notice that Missouri is going to stand up to their way of doing business from the very beginning. Smithfield shouldn’t have the advantage of skirting Missouri’s corporate farming law. Attorney General Nixon could intervene and help to shed some light on this important debate
 

Andy

Well-known member
Econ101 said:
Poles Against Smithfield:
Robert F Kennedy Jr
Skorosze, Poland

Reply »
|
Flag for Review
Sep 23, 2006

I am President of Waterkeeper Alliance an environmental group and a leader of a national coalition of family farmers, fishermen, environmental and animal welfare organizations, religious and civic associations, and food safety advocates who are fighting Smithfield Foods in the United States. During the past eighteen months, I have come to Poland twice to alert the Polish people about the dangers of allowing Smithfield a foothold in this country, most recently at the request of the Animal Welfare Institute.
Smithfield is one of a handful of large multinationals who are transforming global meat production from a traditional farm enterprise to factory style industrial production. Smithfield and its cronies have driven tens of thousands of family farmers off the land, shattered rural communities, poisoned thousands of miles of American waterways, killed billions of fish, put thousands of fishermen out of work, sickened rural residents and treated hundreds of millions of farm animals with unspeakable and unnecessary cruelty.
Four years ago, in 1999, Smithfield began buying slaughterhouses and state farms in Poland. On July 22nd of this year, I sat in the crowded Senate Conference Room in the Polish Republic’s Senate Building in Warsaw listening as Smithfield’s Vice President Gregg Schmidt promised the senate agricultural committee that Smithfield will “modernize” Polish agriculture and bring prosperity and jobs to rural communities.
For the past two decades, Smithfield Foods and its allies have made identical promises to the people of North Carolina, one of America’s rural states. After listening to these promises, the state Senate passed laws to make it much easier for Smithfield to do business in North Carolina.
With encouragement from these politicians, Smithfield built the largest slaughterhouse in the world in Bladen County North Carolina. The plant butchers 30,000 pigs each day. By building this pig slaughter plant, Smithfield set off explosive growth of a new way of producing hogs in North Carolina -- factory-style production.
Factory Farms
Luter who describes himself as “a tough man in a tough business” lives in a $17 million Park Avenue mansion in New York. He is known for a ruthless style that maximizes profits by industrializing agriculture and eliminating both animal husbandry and the family farm.
Smithfield builds football field-sized warehouses in which the company crams thousands of genetically manipulated hogs into tiny metal boxes where they are deprived of sunlight, exercise, straw bedding, rooting, and social opportunities. A hog is as smart and sensitive as a dog. Under these crowded stressful conditions, they must be kept alive by constant doses of antibiotics, and heavy metals. Antibiotic resistant bacteria and residues of these additives naturally end up in their waste.
Industrial Style Pollution
Since a hog produces ten times the amount of waste as a human, a single hog factory can generate more fecal waste than Warsaw. One of Smithfield’s factories in Utah houses 850,000 hogs and produces more fecal waste than New York City’s 8.5 million people. Hog waste falls through slatted floors into a basement where it is periodically flushed into giant outdoor pits called lagoons. While cities must treat sewage before discharging it, Smithfield’s meat factories dump their liquid manure untreated onto fields which quickly become saturated. The manure then percolates into groundwater or is carried by rain into nearby streams or lakes. Waste from industrial pork factories contains a witch’s brew of nearly 400 dangerous substances, including heavy metals, antibiotics, hormones, deadly biocides, pesticides, and dozens of disease-causing viruses and microbes. Antibiotic residues in this lethal soup foster the growth of deadly “super bugs”-- disease organisms that are immune to human antibiotics.

Do you actually believe that Econ?
 

Econ101

Well-known member
Do I believe what part, Andy?

There are a lot of people concerned with the merger, it has the potential of affecting them differently and they are letting it be known.
 

andybob

Well-known member
Here in North Carolina, many previously tobacco (family) farms are now contract rearing for Smithfields, which has kept the farms solvent, and in the families on the other hand I could not start in mainstream pig breeding or poultry raising on my own, as I could not compete at any level with Smithfields. Existing breeding units are either supplying niche markets, or have contracted to Smithfields.
As Smithfields are the biggest pork producers in Poland already, and in the process of doubling production, Mr Kennedy is a little late in shutting the stable door, Roumania will have a similar number of sows on the ground within the next two years, with government approval of the much needed investment.
The use of lagoon water on spray fields is closly monitored by farm managers and qualified operators,ground water quality tests are done, and the whole strict environmental programme is spot checked by state authorities. The company continues to win prestigeous environmental awards which rubbishes Mr Kennedy's pollution claims, the grass produced is being used for the ever increasing beef herd, that is where we need to be concentrating at present. Where will we fit in a verically integrated beef industry?
 

Econ101

Well-known member
andybob said:
Here in North Carolina, many previously tobacco (family) farms are now contract rearing for Smithfields, which has kept the farms solvent, and in the families on the other hand I could not start in mainstream pig breeding or poultry raising on my own, as I could not compete at any level with Smithfields. Existing breeding units are either supplying niche markets, or have contracted to Smithfields.
As Smithfields are the biggest pork producers in Poland already, and in the process of doubling production, Mr Kennedy is a little late in shutting the stable door, Roumania will have a similar number of sows on the ground within the next two years, with government approval of the much needed investment.
The use of lagoon water on spray fields is closly monitored by farm managers and qualified operators,ground water quality tests are done, and the whole strict environmental programme is spot checked by state authorities. The company continues to win prestigeous environmental awards which rubbishes Mr Kennedy's pollution claims, the grass produced is being used for the ever increasing beef herd, that is where we need to be concentrating at present. Where will we fit in a verically integrated beef industry?

The lagoon overflowing was due to some really big storms that caused a few environmental headaches for everyone. Has the moratorium on lagoons been lifted int NC?
 

andybob

Well-known member
The lagoon overflowing was due to some really big storms that caused a few environmental headaches for everyone. Has the moratorium on lagoons been lifted int NC?[/quote]
No, the moratorium is still in place, strict regulations have been imposed as a result of the hurricane spillages, and the company has chosen to implement an even more strict freeboard level allowance, with daily monitoring by both the farm manager and the land nutrient techs,falsifying check-off lists is cause for instant dismissal!
 

Econ101

Well-known member
andybob said:
The lagoon overflowing was due to some really big storms that caused a few environmental headaches for everyone. Has the moratorium on lagoons been lifted int NC?
No, the moratorium is still in place, strict regulations have been imposed as a result of the hurricane spillages, and the company has chosen to implement an even more strict freeboard level allowance, with daily monitoring by both the farm manager and the land nutrient techs,falsifying check-off lists is cause for instant dismissal![/quote]

So are they allowed to build new lagoons and have new producers?
 

andybob

Well-known member
No new lagoons are allowed at present, and Smithfields is bankrolling research into water purifying systems, with the University, to the tune of several million dollars (sorry don't remember how much offhand, can find out if you would like to know.)
The lagoons are the limiting factor in building new units, I personally cannot understand the reluctance to introduce deep litter systems as they are working well in Europe, with more contolls in place under EU regulations, and I have used a combination of outdoor production and deep litter finishing in Africa.
Properly managed deep litter systems would allow new entrants into the industry, as lagoons are then no longer a factor.
 

mrj

Well-known member
andybob said:
No new lagoons are allowed at present, and Smithfields is bankrolling research into water purifying systems, with the University, to the tune of several million dollars (sorry don't remember how much offhand, can find out if you would like to know.)
The lagoons are the limiting factor in building new units, I personally cannot understand the reluctance to introduce deep litter systems as they are working well in Europe, with more contolls in place under EU regulations, and I have used a combination of outdoor production and deep litter finishing in Africa.
Properly managed deep litter systems would allow new entrants into the industry, as lagoons are then no longer a factor.


andybob, would you please explain the deep litter system for raising pigs? I think my understanding of it is probably too simplistic, but isn't it a system of allowing the pigs to run free, more or less, in either buildings or fields, maybe with large shelters with deep straw bedding which is allowed to accumulate and be stirred and mixed by the pigs? How are different categories of pigs (sows, babies, whatever) handled?

It has been a LONG time since my family raised pigs in a pretty crude set-up with shelter for farrowing sows, and the rest run pretty wild with feeders at the water source, so am quite rusty on current systems.

I read about the deep litter system long ago, also, and believe it was touted as organic or natural. What is the story today?

Everything we read or hear today makes it appear that there are no farmers able to raise pigs on their own. What is the status?

It seems like a good idea for cattle producers to understand how the competing proteins are produced, and who ALL the players are.

MRJ
 

andybob

Well-known member
MRJ, the modern deep litter systems consist of group housed sows in controlled environment buildings often computer fed with microchip eartags, or timed 'dump' feeding. The living area consists of a bedding area with straw, wood shavings or crop residue bedding, and a dunging area which is gated so that the sows are closed in the bedding area daily, and the dunging area can be scraped through with a tractor and taken to a controlled composting area. Bedding is topped up at the same time,as older bedding is 'walked' into the dunging area by the pigs.
The farrowing have a variety of crates available for deep litter, designed for ease of cleaning. Weaned piglets are kept in bedded kennels with access to a feeding and dunging area which is also scraped through.
The systems are considered high welfare as are the outdoor systems which use deep litter (bedding) in the huts, sows farrow unaided in individual huts where they make 'nests' before farrowing.

There are still family farmers operating in this area, to start a new unit without contracting to Smithfields would be nigh impossible unless you can identify a niche market free range for example.
 

mrj

Well-known member
andybob said:
MRJ, the modern deep litter systems consist of group housed sows in controlled environment buildings often computer fed with microchip eartags, or timed 'dump' feeding. The living area consists of a bedding area with straw, wood shavings or crop residue bedding, and a dunging area which is gated so that the sows are closed in the bedding area daily, and the dunging area can be scraped through with a tractor and taken to a controlled composting area. Bedding is topped up at the same time,as older bedding is 'walked' into the dunging area by the pigs.
The farrowing have a variety of crates available for deep litter, designed for ease of cleaning. Weaned piglets are kept in bedded kennels with access to a feeding and dunging area which is also scraped through.
The systems are considered high welfare as are the outdoor systems which use deep litter (bedding) in the huts, sows farrow unaided in individual huts where they make 'nests' before farrowing.

There are still family farmers operating in this area, to start a new unit without contracting to Smithfields would be nigh impossible unless you can identify a niche market free range for example.

Thanks, andybob, that is interesting. How long do you suppose it will be before animal rights activists make it impossible to raise pigs any other way?

Is there a large difference in costs, death loss, labor required, etc.? Are there many people raising pigs this way? Seems like it would be a better system for healthy pigs to develop a healthy immune system and might be a developing trend, depending on problems encountered with the system.

MRJ
 

andybob

Well-known member
The outdoor systems in England became popular in the 60's and now account for over 60% of the sow herd, the origional driving force was economics not welfare. I ran a 1000 sow herd,with one full time worker, with part time student help on weekends to allow for alternate weekends off. Piglet mortality averaged 5%, very little sickness and only the usual vaccinations. Summer feeding is cheaper due to grazing, but they eat more in winter due to the cold, but then there are no heating costs for weaners and farrowing sows. When PRRS broke out in nearby indoor units, my outdoor unit and another two miles away did not show any symptoms, unfortunatly we did no blood tests so I dont know if they had antibodies, or if we were just lucky. Because of the low set up costs I started an outdoor system on permanent grass in Rhodesia when I first started up my farming operations. Deep litter systems are similar cost to other indoor systems, but are definitly more welfare friendly.
While I don't doubt the sincerety of the average animal rights supporter, the radicals have hijacked the organisations, and will stop at nothing less than a total ban on livestock farming, I twice had fences cut and equipment vandalised while in England.
I'll try to scan some outdoor pictures on the weekend and post them, better than my attempting to describe the conditions.
There is a move toward these systems in the U.S. but nowhere near the popularity enjoyed in Europe, and specifically Britain.
 

andybob

Well-known member
An interesting article on this theme in todays www.thepigsite.com "Program helps hog producers be more efficient."
His production figures are low compared to what I was achieving with PIC genetics.
 
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