Smithfield Foods Expects Growth After Spinoff, Remains Cautious Amid Policy Shifts
Key points:
* Smithfield Foods does not plan further plant closures in the U.S.
* Company focuses on export diversification and domestic growth opportunities
* Trade and immigration policies under the Trump administration remain areas of concern
Smithfield Foods Outlook
Smithfield Foods President Shane Smith stated that the company has no plans to close any additional U.S. pork processing plants. This announcement comes as the company returns to the U.S. stock exchange after being part of Hong Kong-based WH Group for over a decade.
Smithfield, the largest U.S. pork processor, is closely monitoring trade and immigration policy changes under the Trump administration. The company relies on exports and employs a diverse workforce in its meatpacking operations.
Export Diversification
WH Group, the parent company that spun off Smithfield, is the world's largest pork producer. The spinoff occurred amidst Trump's threats of tariffs on pork imports from China and Mexico, which could lead to retaliatory tariffs that impact U.S. agricultural exports.
Smithfield aims to reduce its exposure to export markets by utilizing more fresh pork in its packaged meat products. It is also exploring opportunities to redirect offal products to U.S. pet food companies.
Export sales comprised 13% of Smithfield's sales in the nine months ending Sept. 29. The company remains prepared to adjust to any potential market changes resulting from tariff escalations.
Immigration Considerations
The Trump administration has also initiated an immigration crackdown. Smithfield acknowledges that over half of U.S. meatpacking workers are immigrants, which raises concerns for the industry's workforce.