Smithfield-Shuanghui Deal: Good or Bad for the U.S.?

Should Smithfield Foods be acquired by Shuanghui International Holdings? We offer two different points of view on the topic.

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Back in May, news broke that Smithfield Foods, America's largest pork processor, struck a deal to be acquired by Shuanghui International Holdings, China's largest meat processor. While the deal undergoes regulatory reviews, it has stirred a lot of emotion. Should it be allowed to happen? What will it mean for food safety? Will it adversely impact American jobs? How will affect the price of pork? We asked two informed people to debate the subject. Farmer Jill Appell says it's good for American hog farmers. Wenonah Hauter of Food & Water Watch says its bad for food safety and the environment.

Jill AppellDeal is Good for America's Farmers


Jill Appell, Farmer

As a pork producer until recently, I follow what is happening in the livestock industry. Although I was surprised by the impending sale of Smithfield Foods to Shuanghui, I think that this deal could be good for both the U.S. and for China. I believe this is an opportunity to showcase America's rich history, experience, and best practices in agriculture on a global stage.

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Wenonah HauterBad for Farmers, Worse for Food Safety


Wenonah Hauter, Food & Water Watch

The purchase of Smithfield Foods by Chinese company Shuanghui International Holdings Ltd. is bad news for U.S. farmers and consumers, the environment and food safety. This merger tightens the grip of multinational agribusinesses and Wall Street on America's kitchens, as Shuanghui is partially owned by U.S. investment bank Goldman Sachs.

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Smithfield-Shuanghui Deal is Good for America's Farmers

It has the promise to produce more food and jobs for us here in the states, while opening up new opportunities abroad

By Jill Appell, Farmer

As someone who was a pork producer until recently, I still follow what is happening in the livestock industry. Although I was surprised by the impending sale of Smithfield Foods to Shuanghui, I think that this deal could be good for both the U.S. and for China. I believe this is a real opportunity to showcase America's rich history, experience, and best practices in agriculture on a global stage.

The U.S. agriculture industry is the gold standard. Our best practices in food safety and sustainability and world-class logistics and efficiency make America a low-cost, high-quality producer of hogs and pork products. Today, we are in a position of strength with a surplus of high-quality protein, while China's growing middle class is demanding more than their country can provide.

It is important to remember that, at its core, this transaction is about providing Chinese families with the same safe and nutritious pork products that are available here in the United States. It is about increasing America's exports to China and opening up new markets to products that are "Made in America."

China is the No. 1 consumer of pork; in fact, they eat almost half of the world's pork consumption. The proposed Smithfield transaction is a positive step toward narrowing the gap in our currently imbalanced trade relationship.

Farmers have been the cornerstone of our economy for centuries, and the Shuanghui-Smithfield transaction will help fuel this important industry. The United Food and Commercial Workers Union is supportive, citing the transaction's benefits for workers and communities across our country. This deal is good for America as it has the promise to produce more food and jobs for us here in the States, while opening up new opportunities abroad

The farming community is applauding this deal. Pork producers have reason to celebrate. Selling more pork is beneficial to all producers not just to Smithfield. There has been a lot of red ink in the last few years, and increased demand for pork will help all producers' bottom lines.

We sold our hogs to Farmland in Monmouth, Ill. When Smithfield bought Farmland, there was concern that there would not be the same quality control, environmental responsibility and animal welfare concerns. We could not have been more wrong. Farmland has continued to be a positive influence in the community; they have become the poster child for site beautification. There is very little employee turnover. The plant is always trying to make improvements in the working conditions and in the handling of the animals. The combined companies' promise to keep Smithfield intact makes it easy for me to support this transaction.

In order to sell to Farmland, we had to be Pork Quality Assurance and Truckers Quality Assurance certified. When we delivered hogs to the plant, someone checked to make sure that my husband's certifications were current. In addition, we had a semiannual, on-farm audit conducted by Farmland to ensure that we were employing the required practices on the farm, and that we had records to verify what we were doing.

This transaction cannot pose any risk to the American food supply. All pork products produced and sold in the U.S. are, and will continue to be, governed by the U.S. Department of Agriculture at every step of the production process and all along the supply chain. In this transaction, we are selling pork and pork products to China; China is not selling pork to the U.S. In addition, China will not be dictating production, environmental or animal welfare standards to Smithfield. Again, the combined companies have promised to keep Smithfield intact.

I was not reared on a farm; I grew up in the northern Chicago suburbs of Highland Park and Libertyville. I always loved farming, and my parents and grandparents had a lot of respect for those who worked so hard to provide food to the rest of us. Today's farmers have to provide for a lot more people than in the past, and the need for more food production will continue to grow.

I believe that Smithfield will continue to provide customers with the same high-quality, delicious pork products they have come to expect from Smithfield for more than 80 years.

Amidst all the rhetoric, we must not lose sight that this deal is as good for American farmers, pork producers and U.S. agriculture as it is good for China. It is a win-win deal.

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Bad for Farmers, Worse for Food Safety

Free-trade deals with global partners encourage a race-to-the bottom in food safety standards.

By Wenonah Hauter, Food & Water Watch

The purchase of Smithfield Foods by Chinese company Shuanghui International Holdings Ltd. is bad news for U.S. farmers and consumers, the environment and food safety. This merger tightens the grip of multinational agribusinesses and Wall Street on America's kitchens, as Shuanghui is partially owned by U.S. investment bank Goldman Sachs.

In the short term, the proposed deal is expected to shift Smithfield pork production toward exports to feed the Chinese market, which would likely significantly increase retail pork prices for American consumers. It would make many U.S. hog producers dependent on a foreign firm for hog contracts and prices. Longer term, Shuanghui would probably eventually want to export pork to the U.S., which would expose U.S. consumers to food safety scandals like the ones that have plagued the Chinese food system for years.

The globalized food system poses real food safety risks, and free-trade deals with global partners encourage a race-to-the bottom in food safety standards, leaving U.S. consumers at the mercy of inadequate foreign food safety systems like China's. We should all be leery of deals like this that further consolidate our food system; especially when they involve companies with a history of food safety problems and countries with abysmal track records for food and worker safety.

As I explained on New York Times' "Room For Debate" [an online "debate" coordinated by the news organization], the purchase of Smithfield isn't just about exporting pork – it's indicative of the American government's fervor for exporting our consolidated, industrialized food system:

Shuanghui International became China's monolithic meat company by adopting the U.S. factory farm model pioneered by companies like Smithfield. The merger is likely to increase the size, intensity and pollution of hog production in China. Furthermore, Smithfield's anticipated increased exports to China would effectively convert U.S. factory farms into export platforms; Smithfield would ship out the pork, and we'd keep the hog manure.

In addition to the environmental consequences of the deal, it's bad for consumers. Transnational deals in the food industry usually add to American imports, and a rising flood of imported food swamps U.S. import inspectors. In the long term, Shuanghui may offshore hog operations to China, and the U.S. could be importing pork. In 2011, Shuanghui recalled thousands of tons of meat after reports that it was laced with the banned veterinary drug clenbuterol, which is linked to serious human health risks.

Deals like this serve no one but the executives and bankers who stand to profit; everyone else is left with the manure.

Another debater -- Thea Lee, who is the deputy chief of staff at the AFL-CIO -- brought up another excellent point:

If Chinese consumers want to consume American pork, they can presumably purchase it on the open market… As we evaluate this and other similar investments, we had better have a good sense of how those other motives will impact good jobs, food safety and regulatory balance in this country. Unfortunately, under current law, even if we determine that this or similar investments would have a negative impact on the U.S. economy – or any subset of workers – there is very little we can do to stop it.

Already, Smithfield's market dominance is troubling. It is the largest processor in the world – it owns twice as many hogs as the next largest hog producer, slaughtering 26 million hogs a year. Smithfield is one of a small handful of companies pulling the strings when it comes to food policy in the U.S. and globally. This power has led to an unfair marketplace for family farmers and abhorrent labor practices for workers. In the mid-2000s, Smithfield increased production of hogs at its flagship Tar Heel, N.C., plant by 30,000 hogs a day, corresponding to a doubling of workplace injuries as line speeds increased.

And its environmental record? Atrocious. Smithfield owns 860,000 sows that produce millions of piglets that are raised on thousands of contract factory farms. And the manure from the millions of Smithfield hogs on industrial farms permeates the air and water of rural communities. Just last month, 600 North Carolina neighbors sued Smithfield because the water pollution, stench and flies had compromised their quality of life and made it difficult to enjoy and use their homes.

The bottom line is further consolidation of our food system, which is bad for consumers and farmers. When a handful of companies -- whether it's Shuanghui, Tyson or Pepsi -- controls the food we eat, Wall Street and highly paid food industry executives win. Consumers, farmers, small and midsized businesses and the environment all lose.

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