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Smithfield Foods


Claim:   Smithfield Foods was sold to a Chinese company that will be slaughtering and processing hogs raised in the U.S.

MIXTURE:
TRUE: Smithfield Foods was acquired by a Chinese company in September 2013.
 
PROBABLY FALSE: Smithfield Foods will be sending hogs raised in the U.S. to China for slaughtering and processing.

Example:   [Collected via e-mail, July 2014]

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Don't forget that Smithfield Farms, the largest pork producing farm in the USA was sold in September to China with the unanimous support of its stockholders!! The hogs will still be raised here, but slaughtered and packaged for sale there before being sent back here. This includes labels: of Morrell, Eckrich, Krakus, Cudahy, Premium Hams, Cook's, Gwaltney. The same with many chickens. They can now be shipped there, but when they come back all that needs to be labeled is that they ... WERE RAISED IN THE USA. Not that they were processed in China!!! Our great FDA at work again. The chickens will be all processed and most sold to fast food restaurants for sandwiches, along with schools and supermarkets. The China slaughter and processing are not nearly equal — and, by far — to the requirements here.
 

Origins:   Virginia-based Smithfield Foods is the world's largest hog farmer and pork processor, vending packaged meat products in the U.S. under a variety of brand names such as Smithfield, Eckrich, Farmland, Armour, John Morrell, Kretschmar, Curly's, Carando, Cook's, Margherita, Gwaltney, and Healthy Ones.
In September 2013 Smithfield Foods was acquired by China's biggest meat processor, Shuanghui International Holdings, in the largest acquisition ever of a U.S. company by a Chinese one — a deal that has raised concerns in America about a Chinese food company's controlling a major U.S. meat supplier.

However, we could find no verification for the statement made in the item quoted above that henceforth, Smithfield "hogs will still be raised here [in the U.S.], but slaughtered and packaged for sale [in China] before being sent back here," labeled simply "Raised in the U.S.A." under FDA regulations. (The sale of domestic and imported meat in the U.S. is regulated by the Department of Agriculture, not the Food and Drug Administration.)

The major factor behind Shuanghui's acquisition of Smithfield was to secure a supply of pork to feed rising demand in China (a country that is now the world's biggest pork market), not to export pork products from China to the U.S.:
The Chinese company is looking to reduce supply uncertainties that come along with the scarcity of livestock feed in order to be able meet the rising demand [for pork] at home. It also aims to reduce quality concerns at the same time by selling "American" meat to consumers in China.

Pork is the most popular meat in China as it forms more than three-fourths of total meat consumption in the country. The nation produced more than half the world's total pork in 2012, while consumers spent around $183 billion consuming it. Moreover, demand for the meat is only rising as disposable incomes of more than 1.3 billion people in China are rising.

A Chinese acquisition of a U.S. processor doesn't mean that Americans will be eating crock Chinese cuts. The trade in pork is all the other way, and so is the technology transfer that Chinese firms crave as they seek to consolidate a fragmented, poorly run industry. Shuanghui isn’t looking to offload Chinese pork in Los Angeles. What it wants is to become the leading player in China.
Moreover, people engaged in that industry have told us that the notion of a Chinese-owned company raising hogs in the U.S., shipping them live all the way to China for slaughtering and processing, then exporting the meat back into the U.S. would be prohibitively cost-inefficient — especially since the slaughtering and processing infrastructures already exist in the U.S., and the Chinese domestic market for pork is far, far larger than the U.S. market for pork.

In fact, China imports very few live hogs from the U.S. and has recently imposed more stringent restrictions on the animals that are shipped there:
China has imposed tougher restrictions for imports of live pigs from the U.S. amid concerns about a fatal swine virus, according to the U.S. Department of Agriculture and livestock-industry officials.

Live hogs represent a relatively small portion of pork-related U.S. exports to China. The Asian nation [in 2013] bought 14,000 hogs, valued at $20 million, according to the USDA. In contrast, exporters shipped $703.5 million of fresh pork to the country, according to the U.S. Meat Export Federation, a trade group.
Last updated:   8 July 2014

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Sources:

    de la Merced, Michael J.   "Senate Agriculture Committee Calls Hearing on Smithfield Deal."
    The New York Times.   27 June 2013.

    Gee, Kelsey.   "China Restricts U.S. Pig Imports."
    The Wall Street Journal.   4 April 2014.

    Kavilanz, Parija.   "Is Pork a National Security Asset?"
    CNN.com.   31 May 2013.

    Mattioli, Dana.   "China Makes Biggest U.S. Play."
    The Wall Street Journal.   30 May 2013.

    Montlake, Simon.   "Why Chinese Purchase of Smithfield Could Be Game Changer for Pork Trade."
    Fortune.   30 May 2013.

    O'Toole, James and Parija Kavilanz.   "U.S. Clears China's Shuanghui to Acquire Smithfield Foods."
    CNN.com.   6 September 2013.

    Pei, Minxin.   "The Real Reason Behind Shuanghui's Purchase of Smithfield."
    Fortune.   4 June 2013.

    Forbes.   "China's Hunger for Pork Will Impact the U.S. Meat Industry."
    19 June 2013.