Smithfield Foods Ends Grower Contracts for 26 farms in Utah
Smithfield Foods announced late Monday that it will end contracts with 26 hog farms in Utah to "optimize its supply chain for more efficient operations in the face of an industry oversupply of pork, weaker consumer demand and high feed prices." Smithfield will continue to operate five company-owned sow farms in the area for the foreseeable future. The production levels from all the Smithfield hog farms is estimated to be approximately 500,000 per year.
Utah Farm Bureau Chief Executive Officer Spencer Gibbons issued a statement to media. "We are disappointed in the news that farm families will have their contracts cancelled, and the local employees of Smithfield that will be out of work. This decision will have a negative impact on the families and communities in rural Utah that have relied on this business model for decades.
While we understand there are many economic forces at play for Smithfield, it is unfortunate that so many will bear the brunt of these business decisions. Utah Farm Bureau will work with other agricultural leaders in the state to see how we can help the families impacted.”
According to the Smithfield press release, "The contract terminations will result in the elimination of Smithfield positions that support contract farm relationships. The company will offer relocation opportunities for affected employees and provide transition assistance. While the exact number is to be determined, the number of Smithfield positions eliminated may be up to one-third of the 210 currently employed in its Utah hog production operations."
"Our industry and company are experiencing historically challenging hog production market conditions," said Shane Smith, president and CEO, Smithfield Foods. "Smithfield continues to take steps to improve operational efficiency and optimize our hog supply chain. These actions have included rebalancing production with East Coast harvest capacity, reducing our sow herd in Missouri and closing finishing operations in Utah. These are difficult decisions, but they are necessary to help our company remain competitive in this operating environment."
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