Smithfield profit drops
- June 5, 2008
Smithfield Foods Inc.’s profit fell 94 percent in its fourth quarter because of the rising cost of feed and dropping prices of live hogs.
Profit for the fourth quarter was $2.4 million, down from $33.1 million during the same period last year. At the same time, sales rose to $2.8 billion, compared with $2.4 billion during last year’s fourth quarter.
The country’s largest pork processor was hurt by an 11 percent drop in hog prices and a 17 percent increase in grain costs for feed. The company’s performance improved in its packaged meat and fresh pork segments, but that could not overcome the $129 million loss in its hog production.
“Exceptional results in our pork operations were more than offset by extremely poor conditions in hog production,” said C. Larry Pope, president and CEO, in a statement. “Domestic and export volumes were at record levels, and I am extremely pleased with the packaged meats side of our business, where we continue to drive out costs and improve margins,” he said.
“On the other hand, there were major challenges in the hog markets as live hog prices were low and grain prices were high. These were enormously difficult conditions,” said Pope.