Reuters / April 12, 2000
CINCINNATI (Reuters) - John Morrell and Co., a wholly owned unit of top U.S. pork producer Smithfield Foods Inc., said it would complete the purchase of Farmland Industries Inc.'s Dubuque, Iowa, pork plant by June 9 and end slaughter operations there.
About 1,000 of the 1,100 workers at the Iowa plant would be affected by the permanent shutdown of the plant's slaughter operations, Morrell said in a statement. But Morrell will then expand pork processing operations at Dubuque, it said.
"Because of inefficiencies and high costs sustained by Farmland's current Dubuque operations, John Morrell and Co. intends to immediately suspend fresh pork operations presently being conducted at the plant but hopes to continue the remaining processing operations with existing employees," it said.
The Dubuque facility has a daily hog slaughter capacity of 8,000 animals, while Smithfield's daily U.S. hog capacity is already more than 80,000 hogs -- just under a quarter of the total daily U.S. hog slaughter.
Farmland, a large farmer-owned cooperative, said last month the Dubuque plant's age made it a costly candidate for modernization and expansion efforts.
Terms of the all-cash transaction were not made public.
Morrell said upon shutdown of the Dubuque plant's slaughter operations, it will invest $10 million to make the plant an efficient producer of processed meat, sliced bacon, case-ready fresh pork and microwave products.
Morrell "expects that, with its intended investment and additional product lines, it can eventually employ a similar sized work force as that presently working at the Dubuque plant," it said.
Smithfield's aggressive acquisitions in the pork industry have made it a lightning rod of critics, who say rising corporate concentration of ownership in U.S. agriculture is driving family farmers out of business.
In February, Iowa Attorney General Tom Miller filed a lawsuit to challenge Smithfield's January takeover of Murphy Farms Inc, the second-biggest pork producer and an operator of Iowa hog farms, under a state corporate farming law.
But Miller's office said last month that Smithfield's move to buy the Dubuque plant did not appear to be a violation of the Iowa law.
After the sale, Farmland plans expansion and modernization of its Crete, Nebraska, pork processing plant. Its other plants are in Monmouth, Illinois, and Denison, Iowa.:
