H1N1 hurts Smithfield
08/09/2009
Meat packing company Smithfield Foods has reported sales of $2.7 billion for the first quarter of its business year, which compares with $3.1 billion in the same period last year. The Virginia-based company attributed the decline to lower volumes, currency fluctuations in its international operations and lower selling prices for fresh pork.
Larry Pope, president and chief executive officer of the company, said: “This first quarter loss reflects the continuing adverse business environment in the hog production segment of the company’s operations. While costs have continued to decline and the pork processing segment continues to deliver strong profits, they were not sufficient to offset the negative impact of low hog prices on the hog production business. The sharply lower hog prices reflect the impact of the A(H1N1) outbreak at the end of the prior quarter and softer export demand.”
He explained that five of six plants targeted for closure have been closed and the remaining plant will be closed in the third quarter as part of a restructuring plan. “We are track to achieve annual cost savings of approximately $55 million, after applicable restructuring expenses, in fiscal 2010 and $125 million by fiscal 2011," he continued.
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