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The company traces its history to 1936, when Joseph W. Luter Sr. and his son, Joseph W. Luter Jr., opened the ] in Smithfield, Virginia. The men were working for P. D. Gwaltney when they set up the company; Joseph W. Luter Sr. was a salesman and Joseph W. Luter Jr. the general manager. Financing for the new company came from Peter Pruden of Suffolk and John S. Martin of Richmond. In an interview in 2009, ] described how the Luters would buy 15 hog carcasses a day, cut them up, box them, and sell them to small stores in ] and ]. They built the Smithfield Packing Company plant in 1946 on ].<ref name=Ernsberger>{{cite news|last1=Ernsberger, Jr.|first1=Richard|title=The Ham Man|url=http://www.virginialiving.com/culture/the-ham-man/|work=Virginia Living|date=September 25, 2009}}</ref> The company traces its history to 1936, when Joseph W. Luter Sr. and his son, Joseph W. Luter Jr., opened the ] in Smithfield, Virginia. The men were working for P. D. Gwaltney when they set up the company; Joseph W. Luter Sr. was a salesman and Joseph W. Luter Jr., the general manager. Financing for the new company came from Peter Pruden of Suffolk and John S. Martin of Richmond. In an interview in 2009, ] described how the Luters would buy 15 hog carcasses a day, cut them up, box them, and sell them to small stores in ] and ]. They built the Smithfield Packing Company plant in 1946 on ].<ref name=Ernsberger>{{cite news|last1=Ernsberger, Jr.|first1=Richard|title=The Ham Man|url=http://www.virginialiving.com/culture/the-ham-man/|work=Virginia Living|date=September 25, 2009}}</ref>


Joseph W. Luter Jr. served as Smithfield's chief executive officer (CEO) until his death in 1962.<ref name=Turner323/> He owned 42 percent of the company when he died.<ref name=Ernsberger/> His son, ], was at ] at the time and joined Smithfield that year. Working in sales, he borrowed enough to buy a further eight-and-a-half percent of the shares, and in 1966 he became chairman and CEO.<ref name=Ernsberger/><ref name=Turner323/> He told ''Virginia Living'' that when he took over Smithfield, the company was killing around 3,000 hogs a day, and when he left in January 1970, the figure was 5,000; the number of employees had risen from 800 to 1,400. In July 1969, he sold the company to ] for $20 million; they had asked him to stay on, but in January 1970 they fired him. From then until 1975 he developed a ski resort, Bryce Mountain, in Virginia.<ref name=Ernsberger/> Joseph W. Luter Jr. served as Smithfield's chief executive officer (CEO) until his death in 1962.<ref name=Turner323/> He owned 42 percent of the company when he died.<ref name=Ernsberger/> His son, ], was at ] at the time and joined Smithfield that year. Working in sales, he borrowed enough to buy a further eight-and-a-half percent of the shares, and in 1966 he became chairman and CEO.<ref name=Ernsberger/><ref name=Turner323/> He told ''Virginia Living'' that when he took over Smithfield, the company was killing around 3,000 hogs a day, and when he left in January 1970, the figure was 5,000; the number of employees had risen from 800 to 1,400. In July 1969, he sold the company to ] for $20 million; they had asked him to stay on, but in January 1970 they fired him. From then until 1975 he developed a ski resort, Bryce Mountain, in Virginia.<ref name=Ernsberger/>


At the recommendation of its banks, Smithfield hired Luter as CEO again in April 1975, when it found itself in financial difficulties. At the time, according to Luter, the company had a net worth of under $1 million, debt of $17 million, and losses of $2 million a year. He said it even lost money in December 1974, which, considering it was holiday-ham season, "was like Budweiser losing money in July."<ref name=Ernsberger/> Luter's restructuring of the company is credited with its improved performance.<ref name=Turner323>{{cite book | title=Vault Guide to the Top Consumer Products Employers | publisher=Vault Inc. | author=Turner, Tyya | year=2007 | page= | isbn=978-1581313239}}</ref> His son, Joseph W. Luter IV, became an executive vice-president of Smithfield Foods in 2008 and president of the Smithfield Packing Company, by then the parent company's largest subsidiary.<ref name=history2/> Joseph W. Luter III remained as CEO until 2006 and was chairman until the company was sold to WH Group in 2013. Joseph W. Luter IV resigned in October 2013.<ref>{{cite news|last1=Walzer|first1=Phil|title=Great-grandson of Smithfield founder leaves company|url=https://pilotonline.com/business/article_ab213cac-fba7-5835-b649-438b4782844b.html|work=The Virginian Pilot|date=October 13, 2013}}</ref> His stock was valued at $21.1 million and Joseph W. Luter III's at $30 million.<ref>{{cite news|last1=Biesheuvel|first1=Thomas|last2=Casey|first2=Simon|title=Smithfield Foods execs to pocket more than $85M from Chinese sale|url=http://www.stltoday.com/business/local/smithfield-foods-execs-to-pocket-more-than-m-from-chinese/article_86328fea-d88a-56c7-95b2-dd288c9a69ff.html|work=St. Louis Post-Dispatch|date=May 31, 2013|agency=Bloomberg News}}</ref> At the recommendation of its banks, Smithfield hired Luter as CEO again in April 1975, when it found itself in financial difficulties. At the time, according to Luter, the company had a net worth of under $1 million, a debt level of $17 million, and losses of $2 million a year. He said it even lost money in December 1974, which, considering it was the holiday-ham season, "was like Budweiser losing money in July."<ref name=Ernsberger/> Luter's restructuring of the company is credited with its improved performance.<ref name=Turner323>{{cite book | title=Vault Guide to the Top Consumer Products Employers | publisher=Vault Inc. | author=Turner, Tyya | year=2007 | page= | isbn=978-1581313239}}</ref> His son, Joseph W. Luter IV, became an executive vice-president of Smithfield Foods in 2008 and president of the Smithfield Packing Company, by then the parent company's largest subsidiary.<ref name=history2/> Joseph W. Luter III remained as CEO until 2006 and was chairman until the company was sold to WH Group in 2013. Joseph W. Luter IV resigned in October 2013.<ref>{{cite news|last1=Walzer|first1=Phil|title=Great-grandson of Smithfield founder leaves company|url=https://pilotonline.com/business/article_ab213cac-fba7-5835-b649-438b4782844b.html|work=The Virginian Pilot|date=October 13, 2013}}</ref> His stock was valued at $21.1 million and Joseph W. Luter III's at $30 million.<ref>{{cite news|last1=Biesheuvel|first1=Thomas|last2=Casey|first2=Simon|title=Smithfield Foods execs to pocket more than $85M from Chinese sale|url=http://www.stltoday.com/business/local/smithfield-foods-execs-to-pocket-more-than-m-from-chinese/article_86328fea-d88a-56c7-95b2-dd288c9a69ff.html|work=St. Louis Post-Dispatch|date=May 31, 2013|agency=Bloomberg News}}</ref>


===Mergers and acquisitions=== ===Mergers and acquisitions===

Revision as of 17:19, 29 August 2019

Smithfield Foods
Company typeSubsidiary
IndustryMeat processing
Founded1936; 88 years ago (1936) (as Smithfield Packing Company)
Smithfield, Virginia, U.S.
FoundersJoseph W. Luter, Sr.
Joseph W. Luter, Jr.
Headquarters200 Commerce Street, Smithfield, Virginia, U.S. 23430
Area servedWorldwide
Key peopleKenneth M. Sullivan (CEO)
Products
  • Meat processing
  • pork products
Production output
  • As of 2006 raised 15 million pigs and produced six billion pounds of pork per year
BrandsCook's, Eckrich, Gwaltney, John Morrell, Krakus, and Smithfield, among others.
RevenueDecreaseUS$14.4 billion (2015)
Operating incomeDecrease US$793.8 million (2015)
Net incomeDecrease US$452.3 million (2015)
Total assetsDecrease US$9.9 billion (2015)
Total equityIncrease US$4.8 billion (2015)
Number of employees50,200 (2016)
ParentWH Group, Luohe, Henan province, China
Websitewww.smithfieldfoods.com

Smithfield Foods, is a meat-processing company and subsidiary of WH Group. Founded in 1936, by Joseph W. Luter and his son, the company is the largest pork producer in the world. In addition to its own farms, Smithfield contracts with independent farms to raise its pigs. Beyond the United States, the company operates in Mexico, Poland, Romania, Germany, and the United Kingdom. Smithfield began a period of rapid growth in 1981 when it started a long series of acquisitions that would continue for decades. The company was able to grow quickly due to the efficiency of its operations.

As of 2006, Smithfield raised 15 million pigs a year and processed 27 million, producing over six billion pounds of pork and, in 2012, 4.7 billion gallons of manure. Killing 114,300 pigs a day, it was the top pig-slaughter operation in the United States in 2007; along with three other companies, it also slaughtered 56 percent of the cattle processed there until it sold its beef group in 2008. The company sells its products under several brand names, including Cook's, Eckrich, Gwaltney, John Morrell, Krakus, and Smithfield. The company employed about 50,200 in 2016 and reported an annual revenue of $14 billion. In 2000, its meat-processing plant in Tar Heel, North Carolina, was reported to be the world's largest.


Company profile

History

Smithfield Foods was founded in the small town of Smithfield in the southeast corner of Virginia, where hog-slaughtering operations first developed in the colonial era. Smithfield’s production of salted country hams, bacon, and other pork products in the 1930s soon transformed its home-town into the ham capital of the American South. Smithfield Foods was a prototypical success story American capitalism.

Smithfield processing plant in Smithfield, Virginia

The company traces its history to 1936, when Joseph W. Luter Sr. and his son, Joseph W. Luter Jr., opened the Smithfield Packing Company in Smithfield, Virginia. The men were working for P. D. Gwaltney when they set up the company; Joseph W. Luter Sr. was a salesman and Joseph W. Luter Jr., the general manager. Financing for the new company came from Peter Pruden of Suffolk and John S. Martin of Richmond. In an interview in 2009, Joseph W. Luter III described how the Luters would buy 15 hog carcasses a day, cut them up, box them, and sell them to small stores in Newport News and Norfolk. They built the Smithfield Packing Company plant in 1946 on Highway 10.

Joseph W. Luter Jr. served as Smithfield's chief executive officer (CEO) until his death in 1962. He owned 42 percent of the company when he died. His son, Joseph W. Luter III, was at Wake Forest University at the time and joined Smithfield that year. Working in sales, he borrowed enough to buy a further eight-and-a-half percent of the shares, and in 1966 he became chairman and CEO. He told Virginia Living that when he took over Smithfield, the company was killing around 3,000 hogs a day, and when he left in January 1970, the figure was 5,000; the number of employees had risen from 800 to 1,400. In July 1969, he sold the company to Liberty Equities for $20 million; they had asked him to stay on, but in January 1970 they fired him. From then until 1975 he developed a ski resort, Bryce Mountain, in Virginia.

At the recommendation of its banks, Smithfield hired Luter as CEO again in April 1975, when it found itself in financial difficulties. At the time, according to Luter, the company had a net worth of under $1 million, a debt level of $17 million, and losses of $2 million a year. He said it even lost money in December 1974, which, considering it was the holiday-ham season, "was like Budweiser losing money in July." Luter's restructuring of the company is credited with its improved performance. His son, Joseph W. Luter IV, became an executive vice-president of Smithfield Foods in 2008 and president of the Smithfield Packing Company, by then the parent company's largest subsidiary. Joseph W. Luter III remained as CEO until 2006 and was chairman until the company was sold to WH Group in 2013. Joseph W. Luter IV resigned in October 2013. His stock was valued at $21.1 million and Joseph W. Luter III's at $30 million.

Mergers and acquisitions

Joseph W. Luter III began his expansion of Smithfield in 1981 with the purchase of its main competitor, Gwaltney of Smithfield, for $42 million. This was followed by the acquisition of almost 40 companies in the pork, beef, and livestock industries between 1981 and around 2008, including Esskay Meats/Schluderberg-Kurdle in Baltimore, Valley Dale in Roanoke, and Patrick Cudahy in Milwaukee in 1984. In 1992, Smithfield opened the world's largest processing plant, a 973,000-square-foot facility in Tar Heel, North Carolina, which by 2000 could process 32,000 pigs a day.

Smithfield purchased John Morrell & Co in Sioux Falls, SD, in 1995 and Circle Four Farms in 1998. In 1999, it bought two of the largest pig producers in the United States: Carroll's Foods and Murphy Family Farms of North Carolina, at that point the largest producer. According to agricultural researchers Jill Hobbs and Linda Young, Smithfield's purchase of these companies constituted a "major structural change" in the hog industry in the United States, leaving Smithfield in control of 10–15 percent of the country's hog production.

Farmland Foods of Kansas City was added in 2003, as were Sara Lee's European Meats, ConAgra Foods Refrigerated Meats, Butterball, and Premium Standard Farms in 2007. Smithfield sold its 49% share in Butterball in 2008 for an estimated $175 million. The acquisitions caused concern among regulators in the United States regarding the company's control of the food supply.

In 2016, Smithfield purchased the Californian pork processor Clougherty Packing PLC for $145 million, along with its Farmer John and Saag's Specialty Meats brands. Smithfield also acquired PFFJ (Pigs for Farmer John) LLC and three of its farms from Hormel Foods Corporation.

In September 2017, the company announced that it would purchase two Romanian packaged-meat suppliers, Elit and Vericom.

Purchase by Shuanghui Group

On May 29, 2013, WH Group, then known as Shuanghui Group or Shineway Group, the largest meat producer in China, announced the purchase of Smithfield Foods for $4.72 billion. Shuanghui announced that it would list Smithfield on the Hong Kong Stock Exchange after completing the takeover. On September 6, 2013, the U.S. government approved Shuanghui International Holding’s purchase of Smithfield Food, Inc. The deal was valued at approximately $7.1 billion, which included debt. It was the largest stock acquisition by a Chinese company of an American company. Smithfield's CEO, Ken Sullivan, said in 2017 that he sees the company's future as a "consumer-packaged goods business."

The acquisition of Smithfield's 146,000 acres of land made WH Group, headquartered in Luohe, Henan province, one of the largest overseas leasers of American farmland.

For decades, Smithfield had run its acquisitions as independent operating companies, but in 2015, after the purchase by WH Group, it set up the "One Smithfield" initiative to unify them. Circle Four Farms in Milford, Utah, for example, became Smithfield Hog Production-Rocky Mountain Region.

Employees, brands

In 2012, it opened a restaurant, Taste of Smithfield, in Smithfield, Virginia, located in the same Main Street building as its retail store, The Genuine Smithfield Ham Shoppe.

In 2016, Smithfield had 50,200 employees in the United States, Mexico and Europe, and an annual revenue of $14 billion. As of July 2017, the company's brands included Armour, Berlinki, Carando, Cook's, Curly's, Eckrich, Farmland, Gwaltney, Healthy Ones, John Morrell, Krakus, Kretschmar, Margherita, Morliny, Nathan's Famous, and Smithfield.

In early 2019, Smithfield re-branded its foodservice business as "Smithfield Culinary." This line of business was previously referred to as Smithfield Farmland. In keeping with the new name, Smithfield created advisory boards composed of chefs, established partnerships with culinary schools, and engaged in substantial research and development to improve its products. Smithfield Culinary uses the Carando, Curly's, Eckrich, Farmland, Margherita, and Smithfield brand names.

Pig production

Vertical integration

In 1990, Smithfield began buying hog-farming operations, making it a vertically integrated company. As a result, it was able to expand by over 1,000 percent between 1990 and 2005. Vertical integration allows Smithfield to control every stage of pig production, from conception and birth, to slaughter, processing, and packing, a system known as "from squeal to meal" or "from birth to bacon."

Joseph W. Luter III said that vertical integration produces "high quality, consistent products with consistent genetics." The company obtained 2,000 pigs and the rights to their genetic lines from Britain's National Pig Development Company in 1990, and used them to create Smithfield Lean Generation Pork, which the American Heart Association certified for its low fat, salt, and cholesterol content. According to Luter, it was vertical integration that enabled this.

Under contracts with its growers, Murphy-Brown, Smithfield’s subsidiary based in North Carolina, provides all the animals, feed, veterinary care, transportation of the livestock to and from the farms, and free consultations to ensure that animals are properly cared for and that stable compensation is provided according to contract terms. The contract farmers provide farm land, barns, and waste processing facilities that comply with all applicable laws, regulations, and Murphy-Brown’s technical and animal care requirements. Contract farmers are also responsible for the day-to-day management and financing for the construction of farm facilities and operations.

Housing and lagoons

Smithfield CAFO, Unionville, Missouri, 2013

The pigs are housed together in their thousands in identical barns, known as concentrated animal feeding operations (CAFOs). The floors of the buildings are slatted, allowing waste to be flushed into 30-feet-deep "open-air pits the size of two football fields", according to the Washington Post. These are referred to within the industry as anaerobic lagoons. They dispose of effluent at a low cost, but they require large areas and release odors and methane.

The farms all raise hogs inside CAFOs under tightly regulated conditions. The manure management systems created for these barns, anaerobic lagoons, which were state-of-the-art technology when they were approved by regulators. Anaerobic lagoons consist of outdoor lagoons where the manure is stored and treated. As manure enters a lagoon, it becomes nutrients for beneficial bacteria. The biological digestion process eliminates much of the manure’s odor and nutrient content. Treated waste is stored in lagoons until it is used as organic fertilizer to raise animal feed.

In the fall of 1999, Hurricane Floyd, a 500-year storm event, hit North Carolina, causing disastrous flooding. The storm flooded much of eastern North Carolina, affecting municipal sewage treatment systems, stores, businesses, and homes. Not a single company or contract farm had a lagoon or any other part of its waste management system fail.

Pregnant sows

photograph
Sows used for breeding are confined in 7 ft x 2 ft gestation crates. This image was taken inside a Smithfield facility in Virginia in 2010.

Smithfield said in 2007 that it would phase out its use of gestation crates by 2017. Pregnant sows often used to spend most of their lives in these stalls. Pregnancies last about 115 days; the average life span of a sow in the United States is 4.2 litters. When they give birth, they are moved to a farrowing crate for three weeks, then artificially inseminated again and moved back to a gestation crate. The practice has been criticized by animal-welfare groups, supermarket chains and McDonald's. Smithfield did not commit to requiring its contract farms to phase out the crates. Almost half the company's sows in the United States live on its roughly 2,000 contract farms.

In 2009, Smithfield said it would not meet the deadline because of the recession, but in 2011 it returned to its commitment, and to doing the same in Europe and Mexico by 2022.

In January 2015, it said that 71.3 percent of pregnant sows on company-owned farms had been moved into a group-housing system. In January 2017, the company announced that 87 percent of sows on company-owned farms were no longer in crates, and that it would require its contract farms to phase out crates by 2022.

As of January 2018, on company-owned farms in the United States, Smithfield confines pregnant sows in gestation crates for six weeks during the impregnation process. When pregnancy is confirmed, they are moved to pens within a group-housing system for about 10 weeks, then to a farrowing crate, then back to a gestation crate to be impregnated again. The company said it is recommending that its contract farms in the United States move to group housing by 2022. It uses two forms of group housing: in one system, 30–40 sows are kept in a pen with access to the individual gestation crates; in the other system, five or six sows are housed together in a pen.

Antibiotics

Compass Group, which offers dining services for schools, museums, hospitals, and large companies across the United States, worked together with Smithfield Foods and Environmental Defense, to develop a new purchasing policy designed to reduce the use of antibiotics used in pork production. The policy prohibits the use of antibiotics approved for human use from being given to pigs to promote growth.

Smithfield was approached for assistance because it already had a policy in place to restrict the administration of antibiotics to its hogs. Smithfield uses antibiotics solely to treat sick hogs and other hogs that have been in contact with them to prevent the spread of infections. Smithfield has discovered that using antibiotics to promote growth is too expensive. The company says improved nutrition and better care are more economical. Smithfield keeps detailed records on its use of antibiotics.

Antibiotic-free pork

The company introduced an antibiotic-free Pure Farms brand in 2017; it promoted the brand as free of antibiotics, artificial ingredients, hormones, and steroids.

Medical supplies

Smithfield is a supplier of heparin, which is extracted from pigs' intestines and used as a blood thinner, to the pharmaceutical industry. In 2017, the company opened a bioscience unit and joined a tissue engineering group funded by the United States Department of Defense to the tune of $80 million. According to Reuters, the group included Abbott Laboratories, Medtronic and United Therapeutics.

Environmental management

In 2001, Smithfield created an environmental management system (EMS) and the following year hired Dennis Treacy, director of the Virginia Department of Environmental Quality since 1998, as executive vice president and chief sustainability officer. In addition to hiring Treacy, the corporate environmental team includes the company’s senior environmental officials, the chief environmental official at each Smithfield subsidiary, and the company’s head regulatory attorney. At the subsidiaries, chief environmental officials are assisted by senior environmental managers. Each facility also maintains at least one environmental coordinator responsible for ensuring constant compliance.

Smithfield’s hog farms were the first in the industry to implement an EMS, and in 2001, Murphy- Brown became the world’s first livestock production company to receive EMS certification under the ISO 14001 standard. Once the EMS program was established for hog operations, Smithfield adopted it for its American processing facilities, as well as for its overseas operations.

In 2005, the company received ISO 14001 certification for its hog production and processing facilities in the U.S., with the exception of new acquisitions. In 2009, 14 plants in the U.S. and 21 in Romania received certification. By 2011, 578 Smithfield facilities were ISO 14001-certified.

In 2006, Smithfield subsidiary Murphy-Brown reached an agreement with the Waterkeeper Alliance, once one of Smithfield's biggest critics, to enhance environmental protection at its facilities in North Carolina.

In 2009, the company said it had reduced its emissions since 2007, including its greenhouse-gas emissions by four percent.

In 2010, the company announced the creation of two sustainability committees.

Stewart Leeth, Smithfield's chief sustainability officer, October 2017

Packaging reduction

In 2009, Armour-Eckrich introduced smaller crescent-style packaging for its smoked sausages, which reduced the plastic film and corrugated cardboard the company used by over 840,000 pounds per year. In 2010, the John Morrell plant in Sioux Falls, South Dakota, reduced its use of plastic by 40,600 pounds a year, and Farmland Foods reduced the corrugated packaging entering waste streams by over five million pounds a year. Smithfield Packing used 17 percent less plastic for deli meat. The company also eliminated 20,000 pounds of corrugated material a year by using smaller boxes to transport chicken frankfurters.

Litigation and regulatory actions

Emissions

In 2012, Smithfield produced at least 4.7 billion gallons of manure in the United States.

The company was fined $12.6 million in 1997 by the Environmental Protection Agency for 6,900 violations of the Clean Water Act after discharging illegal levels of slaughterhouse waste into the Pagan River in Virginia.

In a four-year period in North Carolina in the 1990s, 4.7 million gallons of waste from hog farms was released into the state's rivers. Workers and residents near Smithfield plants reported health problems and complained about the stench.

Smithfield facilities in North Carolina came under scrutiny in 1999 when Hurricane Floyd flooded lagoons holding farm waste; many of Smithfield's contract farms were accused of polluting rivers. In 2000, Smithfield reached a settlement with North Carolina. It agreed to pay the state $50 million over 25 years.

Operations in Mexico

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Tension between the company and local community, prompted several newspapers to incorrectly link cases of respiratory disease to Smithfield. According to The Washington Post, over 600 other residents of La Gloria became ill from a respiratory disease in March that year; Ir was later determined to be seasonal flu. The Post wrote that health officials found no link between the farms and an H1N1 outbreak.

Smithfield said that it had found no clinical signs of swine flu in its pigs or employees in Mexico, and had no reason to believe that the outbreak was connected to its Mexican facilities. The company said it routinely administers flu vaccine to its swine herds in Mexico and conducts monthly tests to detect the virus.

Tort actions

In 2010, 13 plaintiffs in Jackson County, Missouri, won $825,000 each from a Smithfield subsidiary. Two other plaintiffs won $250,000 and $75,000. The plaintiffs said they were denied enjoyment of their property due to odor from Smithfield farms.

In 2017, in North Carolina, about 500 residents sued Smithfield subsidiary Murphy-Brown, in 26 cases, alleging nuisance and ill health. Residents claimed their outdoor activities were limited, and that they were unable to host guests. Smithfield said the suits were meritless.

In August 2018, a federal jury awarded six North Carolina residents $470 million in a verdict against Murphy-Brown. The verdict included $75 million each in punitive damages, plus $3–$5 million in compensatory damages for loss of enjoyment in their properties. A recently enacted state law capping punitive damages will lower that amount to $94 million. The plaintiffs had filed suit for nuisances generated near their homes on Kinlaw Farm in Bladen County."

Owners of farms at the center of this dispute were not allowed to tell their side of the story due to a gag order that was in place until it was lifted by United States District Court Judge Earl Britt on September 3rd, 2018. Earl lifted the gag order, which he had imposed, right before the United States Court of Appeals for the Fourth Circuit was able to rule on a petition to overturn it. The National Pork Council and the North Carolina Pork Council filed an amicus brief in support of the petition to the Court of Appeals. They argued that gag orders have to be carefully crafted in order to be constitutional, that there was no compelling need for such an order in these cases, and that the order issued was vague, overbroad, and ineffective.

Smithfield moved to bifurcate the issues of its liability for compensatory damages and its liability for punitive damages. This motion was granted on October 24th, 2018 by Senior United States District Judge David A. Faber. Research shows that bifurcating trials in this manner creates more uniform verdicts for compensatory damages and decreased the chance of juries awarding extremely high judgments for compensatory damages. Bifurcation also results in lower awards for compensatory damages in cases of involving minor or less severe injuries while resulting in higher awards for in cases where injuries are severe. Jurors report they feel they use evidence more appropriately in bifurcated trials.

In December of 2018, eight plaintiffs who live near a contract farm in Sampson County won a verdict against Smithfield Foods. Four plaintiffs received $100 in compensatory damages. Two won $1,000 in compensatory damages. One received $25,000 in compensatory damages. One elderly female plaintiff who lived close to the farm and grew up nearby was awarded $75,000 in compensatory damages. A judge ruled that the plaintiffs did not provide enough evidence to justify the award of punitive damages. Before and during the trial many residents of the area planted yard signs that read, "Stand for hog farmers."

Several officials in North Carolina accused lawyers and their clients of trying to put farmers out of business. Steve Troxler, North Carolina's agricultural commissioner, said such litigation could harm farmers across the country and that legal abuse of the word "nuisance" is a mounting concern.

Union dispute

John Edwards meets Smithfield workers, Chapel Hill, North Carolina, June 2007.

The Smithfield Packing plant in Tar Heel, North Carolina, was the site of a 15-year dispute between the company and the United Food and Commercial Workers Union, which had tried since the early 1990s to organize the plant's roughly 5,000 hourly workers.

After demonstrations, lockouts, and a shareholder meeting that was disrupted by shareholders supporting the union, the union called for a boycott of Smithfield products. In 2007, Smithfield countered by filing a federal RICO Act lawsuit against the union. The following year Smithfield and the union reached an agreement, under which the union agreed to suspend its boycott in return for the company dropping its RICO lawsuit and allowing another election. In December 2008, workers voted 2,041 to 1,879 in favor of joining the union.

Animal welfare

In December 2010, the Humane Society of the United States released an undercover video taken by one of its investigators inside a Smithfield Foods facility. The investigator had worked for a month at Smithfield subsidiary Murphy-Brown. The Associated Press (AP) reported that 1,000 sows living in gestation crates were recorded. According to the AP, the material shows a pig being pulled by the snout, shot in the head with a stun gun, and thrown into a bin while trying to wriggle free. The investigator said he saw sows biting their crates and bleeding; staff jabbing them to make them move; staff tossing piglets into carts; and piglets born prematurely in gestation crates falling through the slats into the manure pits.

Smithfield responded, saying that it has "zero tolerance for any behavior that does not conform to our established animal well-being procedures". The company asked Temple Grandin, a professor of animal husbandry, to review the footage; she recommended an inspection by animal welfare expert Jennifer Woods. Smithfield announced on December 21 that it had fired two workers and their supervisor.

At the company's invitation, the Virginia state veterinarian Richard Wilkes visited the facility on December 22. He told The Virginian-Pilot that Smithfield had been "very responsive and very responsible in how they've addressed the issues", and that he had not seen "any indication of abuse" of the pigs and was impressed by their demeanor. A Humane Society spokesman said that Smithfield had provided the vet "with a pre-announced, white glove tour."

Philanthropy

The Smithfield-sponsored No. 43 car of Aric Almirola in 2015

Smithfield Foundation

The Smithfield Foundation, established in 2002, is a non-profit organization that acts as the philanthropic wing of Smithfield Foods. It is primarily dedicated to providing scholarships to the children and grandchildren of Smithfield workers. The foundation gave $5 million to Christopher Newport University in Newport News, Virginia, to establish the Luter School of Business, and in 2006 gave $5 million to the University of Virginia Cancer Center in Charlottesville, Virginia. It has also supported its "learners to leaders" programs, begun in 2006, in Sioux Falls, South Dakota; Green Bay, Wisconsin; Denison, Iowa; and Norfolk, Virginia.

Marketing, advertising, and public relations

Sports sponsorships

In 2012, Smithfield announced a 15-race sponsorship with Richard Petty Motorsports and driver Aric Almirola driving the No. 43 Ford Fusion in the NASCAR Sprint Cup Series. The sponsorship was increased to 30 races beginning in 2014. Smithfield rotates its brands on the car, featuring Smithfield, Eckrich, Farmland, Gwaltney, and Nathan's Famous. Smithfield and Richard Petty Motorsports parted ways in September 2017. This allowed Smithfield to sponsor Stewart-Haas Racing in 2018.

See also

Notes

  1. The other companies were American Foods Group, Cargill Meat Solutions and XL Beef.
  2. The company agreed to donate $1.3 million to clean up; North Carolina State University would receive $15 million to research the treatment of pig waste; and the North Carolina Foundation for Soil and Water Conservation, Ducks Unlimited and the North Carolina Coastal Federation would receive grants.

References

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Further reading

External links

Books

  • Eisnitz, Gail A. (2006) . Slaughterhouse. Prometheus Books.
  • Evans-Hylton, Patrick (2004). Smithfield: Ham Capital of the World. Arcadia Publishing.
  • Hahn Niman, Nicolette (2010). Righteous Porkchop: Finding a Life and Good Food Beyond Factory Farms. HarperCollins.
  • Horowitz, Roger (2005). Putting Meat on the American Table: Taste, Technology, Transformation. Johns Hopkins University Press.
  • Wise, Steven M. (2009). An American Trilogy. Da Capo Press.

Articles

  • Anon (June 2004). "Challenging Concentration of Control in the American Meat Industry", Harvard Law Review, 117(8), pp. 2643–2664. JSTOR 4093409
  • Coppin, Dawn (Autumn 2003). "Foucauldian Hog Futures: The Birth of Mega-Hog Farms", The Sociological Quarterly, 44(4), pp. 597–616. JSTOR 4120724
  • Hayenga, Marvin L. (Autumn–Winter 1998). "Cost Structures of Pork Slaughter and Processing Firms: Behavioral and Performance Implications"], Review of Agricultural Economics, 20(2), pp. 574–583. JSTOR 1350009
  • Herbert, Bob (June 15, 2006). "Where the Hogs Come First", The New York Times.
  • Herbert, Bob (June 19, 2006). "On the Killing Floor", The New York Times.
  • Ladd, Anthony E. and Edward, Bob (2002). "Corporate Swine and Capitalist Pigs: A Decade of Environmental Injustice and Protest in North Carolina", Social Justice, 29(3), pp. 26–46. JSTOR 29768134
  • LeDuff, Charlie (June 16, 2000). "At a Slaughterhouse, Some Things Never Die", The New York Times.
  • Reimer, Jeffrey J. (February 2006). "Vertical Integration in the Pork Industry", American Journal of Agricultural Economics, 88(1), pp. 234–248. JSTOR 3697978
  • Stith, Pat; Warrick, Joby; and Sill, Melanie (February 19, 1995). "Boss Hog: The power of pork", The News & Observer (Raleigh) (this and the following articles on the pig industry in North Carolina won the Pulitzer Prize for Public Service in 1996):
  • Wing, Steve et al. (October 2008). "Air Pollution and Odor in Communities near Industrial Swine Operations", Environmental Health Perspectives, 116(10), pp. 1362–1368. JSTOR 25071189
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