Smithfield Purchase Stirs Discussion At World Pork Expo

Iowa Farm Scene

U.S. pork producers cite opportunity to export more pork to China, but concerns remain.

Published on: June 10, 2013

Iowa officials emphasize that China and Iowa share a common goal of increasing the food supply. Branstad says the Smithfield deal, in particular, shows a Chinese commitment to buying U.S.-produced pork long term. He says Iowa's 30-year relationship with Hebei in Iowa's Sister State program -- which promotes economic, education and cultural exchanges between the two countries -- could lead to Chinese companies investing in Iowa. Branstad says Iowans should be pleased that foreign companies are interested in Iowa, including the Egyptian company Orascom's plan to build a $1.8 billion fertilizer plant in Lee County in southeast Iowa.

A number of U.S. Senators want Smithfield deal to be thoroughly scrutinized

Some U.S. Senators, including Iowa's Charles Grassley, have raised concerns about the deal between Smithfield, headquartered in Virginia, and Shuanghui International. Smithfield has eight processing and packing plants with 3,500 employees across Iowa.

Grassley has sent a letter asking the U.S. Department of Justice to make sure it does what the law requires, thoroughly examine the deal to make sure that it's not anti-competitive. Grassley has resisted moves by companies like Smithfield to own hogs as well as processing plants -- a business strategy known as vertical integration.

"Vertical integration has already proven to be bad for the American farmer," he says. "It's not going to get better with globally integrating meat production. I share concern with many Iowans that fewer competitors and increased consolidation leads to less choice and higher prices for consumers."