020269 Smithfield Will Adapt if U.S. Bans Packer HerdsFebruary 23, 2002Washington - Smithfield Foods Inc., would remold its operations to maintain vertical control of hog production if Congress passes a law banning large meatpackers from raising livestock, one of the firm's leaders said Friday. The so-called “packer ownership” ban was included in the Senate's $45 billion farm bill, but was not part of the House's version. Negotiators were expected to meet soon to write a final compromise bill. Richard Poulson, Smithfield executive vice president, said the ban would be “very disruptive” for Smithfield, but he had “great hopes” it would be deleted from the final bill. Smithfield owns 700,000 sows and produces 12 million hogs for slaughter each year. It also contracts with hundreds of independent farmers to deliver hogs for slaughter. If the ban became law, Poulson said at the annual Outlook Forum sponsored by the Agriculture Department, “I am confident we can structure, or restructure” to preserve vertically integrated production. Afterward, Poulson said vertical integration was, "the only way we can control the end product. “This is consumer-driven, product-driven,” Poulson said, of the need to produce meats that satisfy consumer demand or contain traits requested by food makers. Proponents say the ban would keep large firms from gaining undue advantage over farmers. Foes say it would interfere with new marketing arrangements that might help farmers gain a larger share of the marketing dollar. The ban pending in cotton would bar large packers from owning or controlling hogs and cattle more than 14 days before slaughter. Exceptions would be allowed for producer-owned cooperatives or packers who account for less than 2.5% of slaughter of a type of animal.
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