A Letter from Don Butler on the Smithfield Merger

A Letter from Don Butler on the Smithfield Merger

Introduction from NC Pork Council’s Deborah Johnson:

We’ve received a number of inquiries from NC Pork Council members and affiliates related to the merger announcement of Smithfield Foods and Shuanghui International Holdings Limited. As with any inquiry on any issue, our goal during this time has been to address each one with factual information in a timely and transparent manner.

Recognizing the vast interest in this announcement and knowing our responsibility and role in disseminating accurate information, the NC Pork Council is providing the following letter to you from Murphy-Brown’s Don Butler about the Smithfield announcement.

Also on www.ncpork.org is an article about the merger from the perspective of agricultural and livestock economist Dr. Steve Meyer of Paragon Economics.

We encourage you to read both Don’s letter and Dr. Meyer’s article. Both contain information that is important for you to know about this industry development.

Dear NC Pork Council Member:

On May 29, 2013 Smithfield Foods announced that it has entered into a strategic combination with Shuanghui International Holdings Limited to create a leading, vertically integrated global pork enterprise. As part of Shuanghui’s international platform, Smithfield’s best practices in large scale farming, food safety standards, environmental stewardship and animal welfare will set the global industry standard.

Shuanghui is the majority shareholder of China’s largest meat processing enterprise and China’s international platform with access to even more resources to meet rapidly growing global demand for high-quality pork. Murphy-Brown has been an important part of Smithfield’s success and will be instrumental to the success of the combined company. Shuanghui is committed to continuing the long-term growth of Smithfield and there will be no changes to our management team or our talented workforce as a result of the transaction. The announcement will have no impact on day-to-day operations and it remains business as usual for Murphy-Brown. As always, our commitment to producing good food responsibly is unwavering. We will continue to provide our customers and consumers with the same high-quality, delicious pork products they have come to expect from Murphy-Brown and Smithfield for more than 80 years.

As with any transaction of this sort, there are steps that still need to be taken before the deal is closed. We expect to complete this transaction in the second half of 2013.

We believe that this transaction will result in significant benefits to the entire U. S. pork industry by expanding export opportunities for pork raised in this country and thus creating more demand for hogs and that this will have a positive impact on hog prices. Dr. Steve Meyer, one of the leading agriculture economists in the United States and president of Paragon Economics, recently stated “The economics of the sale would be good for U.S. farmers, agribusinesses and Chinese consumers as the quality and safety of pork from this country are both quite high”. A much more in-depth assessment of the transaction by Dr. Meyer is also included here for your information.

We believe that this transaction will have a net beneficial effect for hog producers in North Carolina and for anyone else who grows and markets hogs in United States.

Don Butler, Vice President
Government Relations & Public Affairs
Warsaw, NC