Smithfield and Tyson are back in the news, but this time the two meatpackers are in agreement, and the issue is the Senate's proposal to ban processors from raising or owning livestock 14 days prior to slaughter.
The Senate included the provision in its final Farm Bill package, which will now be addressed in a conference committee. Such a ban would force force integrated packers such as Smithfield Foods, Seaboard Farms, Premium Standard Farms to divest hog-farming operations. Under terms of the current amendment, packers owning livestock would have 18 months to divest their livestock operations. Other packers also could be effected based on some current business strategies.
The proposed ban– come to be known as the "packer-ownership ban"– is expected to be a major sticking point as the House/Senate conference committee draws up a final Farm Bill to send to the White House.
Smithfield, the world's No. 1 pork producer and processor has actively lobbied against the amendment. “It would have a major negative impact on our company and the red-meat industry as it exists today,” Smithfield chairman Joseph Luter wrote in an advertisement in the Sioux Falls (S.D.) Argus Leader newspaper.
Also in the ad, Luter threatened to shut down its Sioux Falls packing plant if the packer-ownership ban becomes law. Sioux Falls business leaders responded with their own ad in Tuesday's Norfolk Virginian-Pilot newspaper, expressing support for Smithfield and the plant that employs 3,200 workers.
“When packers own animals, they don't make purchases from farmers,” said Sen. Tim Johnson (D-S.D.), who pushed for the ban. “Livestock ownership by packers drives independent farmers out of business.”
Smithfield's pork production facilities account for about 60 percent of the 20 million hogs the company processes each year.