iowa underground blog

From A.V. Krebs’ Agribusiness Examiner #435 comes a story that has a rather interesting choice of words:

SMITHFIELD’S PROFIT PLUNGES AS MEAT GLUT HURTS PRICES
By Associated Press
June 8, 2006

RICHMOND, Virginia—- Smithfield Foods Inc., the world’s largest pork processor, on Thursday reported its profit plunged 99% in its fourth quarter as bloated meat inventories in the U.S. hurt prices. Its shares were off nearly five percent in midday trading.

Industry observers have blamed the oversupply on bird-flu fears that have softened international demand for chicken and have hurt domestic prices of other meats. Evolving diet trends—- a move away from high-protein, low-carb meals—- may also be playing a role, though a smaller one.

“This past quarter was difficult for many in the protein industry, including ourselves,” said Joseph W. Luter III, Smithfield’s chief executive officer.

Smithfield, based in Smithfield, Virginia, said it earned $1.1 million, or one cent a share, in the quarter ended April 30. That is down from $85.4 million, or 76 cents a share, in the year-earlier period. Revenue decreased 8% to $2.68 billion from $2.90 billion.

The current quarter includes a pretax charge of $10 million, or five cents a share, tied to the restructuring of the company’s East Coast pork-processing operations. Income from continuing operations—- excluding its to-be-sold Gorges/Quik-to-Fix Foods unit—- was $4.7 million, or four cents a share.

The “Protein Industry?” I suppose there is a bit of truth in that statement: Smithfield is not in the animal business, nor the farming business – they’re in the “protein business”. An interesting worldview that probably makes the notion of driving small famers into the ground with gigantic CAFO operations an acceptable business endeavor. After all – the “protein” should be the same, right?

Krebs follows this up with an item from October 1985:

A “RAW MATERIALS PROCUREMENT AND DISTRIBUTION SYSTEM”
By Fred Stover U.S. Farm News
October, 1985

“The biggest problem farmers have is that they have to sell their products through a market place that is really a `raw materials procurement and distribution system;’ a system that is designed to buy raw materials as cheaply as possible and resell the products on the basis of all the traffic will bear—- regardless of cost, efficiency, supply, demand or fair market value.”

Fred Stover, was President of the U.S. Farmers Association

So… what do producers do when the owners (Smithfield) view the product as a ‘raw material’?

• Sousy

FYI: Smithfield was the company that fought Iowa’s packer ban

This entry was posted on Friday, June 9th, 2006 at 5:08 am and is filed under General, Politics, Iowa, Corporations. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.