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Will that All-American Hot Dog You Get at the Ballpark be going Chinese?

By Terry | Free Trade

Take me out to the ball game. Take me out to the crowd. Buy me some peanuts and crackerjacks, but you may way to stop there soon. Smithfield Foods Inc., the largest prPig_1oducer of all-American hams, hotdogs and bacon may be sold to Shuanghui International.

Speculators are wondering if U.S. regulators will approve the biggest such takeover of an American company by a Chinese firm- a $5 Billion deal.

Wall Street traders were big on the plan which has sent the company’s stock price up. Some felt that it will increase exports to the Chinese market which will benefit all U.S. pork producers as expressed by Dave Warner, Director of Communications for the National Pork Producers Council who stated:

“This does have the potential to increase U.S. pork exports to China, which would benefit all U.S. pork producers.”

Nevertheless, that may be a little bit of an overstatement. Bloomberg notes that the deal is unlikely to increase U.S. pork producers since China is already over capacity in pork production.

However, Shuanghui could ratchet up production to feed the growing demand for meat in China. The question that brings to mind is what kind of impact will that have for the smaller growers and the quality of pork produced?

Larry Pope, Smithfield chief executive, claims the deal won’t change how the company does business. The company’s headquarters will remain in Smithfield, Va., he said, and there will be no changes to the 46,000-person workforce.

“It will be business as usual — only better — at Smithfield,” Pope said in a statement. “We do not anticipate any changes in how we do business operationally in the United States and throughout the world.”Pigs_1

The fly in the ointment is that this sale must still be approved by the Committee on Foreign Investment in the United States. The problem is that Shuanghui was a company to the 2011 scandal that involved feeding a dangerous additive to pigs prior to slaughter. Elizabeth Holmes, a staff attorney at the Center for Food Safety, says U.S. regulators should take a hard look at the deal.

“They’re supposed to identify and address any national security concerns that would arise,” she said of the committee. “I can’t imagine how something like public health or environmental pollution couldn’t be potentially construed as a national security concern.”

Environmental groups were quick to criticize the deal, too, citing the growing globalization of vertically integrated or factory farming. Wenonah Hauter, executive director of Food & Water Watch, called it “birth of a cross-border bacon behemoth.”

“Merger mania in the meat industry in recent decades has led to more factory farms in the U.S., with 95 percent of hogs now raised in operations of over 2,000 animals,” she said. “We may export the pork, but we keep millions of gallons on manure right here in U.S. hog raising communities in North Carolina and Iowa.

As noted by Harvest Public Media, Smithfield operations already slaughters more than 16 million animals a year. Smaller producers like Alex Pope, owner of The Local Pig in Kansas City are hoping that a deal with China like this will be taken by consumers as a wake-up call and pay more attention to the quality of the meat they purchase:

“That’s the first step in saying, ‘I don’t want to be a part of that. I want an option. I would like to go to a small local producer, at a farmers market, or at a locally-sourced butcher shop and buy that bacon,’” he said. “Ask them where it came from, where the pigs were raised and how they were treated. If it can spur something like that it would be really great.”

Not to worry for Smithfield if the China deal doesn’t go through Bloomberg reported Wednesday that another Asian company and one from Brazil were preparing bids for Smithfield when the deal was announced.

Perhaps consumers should already be taking a second look at the quality of meat they are consuming. One way or another it looks like our largest pork producer is going to end up in foreign hands. I just can’t see how that can be a good thing for a consumer concerned about quality or their health.

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