Meat + Poultry - September 2005 - 4

Smithfield prevails in Iowa packer ban dispute
SMITHFIELD, Va. - Officials with
Smithfield Foods, Inc. announced an
agreement with Iowa state officials that
will allow the company to contract directly with Iowa farmers to raise hogs
for slaughter at
Smithfield facilities. The agreement concludes a five-year legal battle
over an Iowa statute forbidding meatpackers from owning or controlling
livestock in Iowa.
The dispute began when Smithfield announced plans to acquire Murphy Family
Farms, one of the country's biggest hog

growers. Iowa's attorney general interpreted that statute to prohibit Smithfield from
continuing Murphy's practice of contracting with Iowa farmers to grow hogs to
maturity. Smithfield twice challenged the
statute in court and both times
it prevailed. In February 2002,
a state court rejected the attorney general's interpretation. Later that
year, the Iowa legislature amended the
statute to make it more restrictive.
Smithfield then challenged the 2002
statute in U. S. District Court in Des
Moines, which declared the law unconstitutional. While that case was being

Smithfield expanding
subsidiaries

Koch Foods' workers vote for union representation

SMITHFIELD, Va. - Three Smithfield
Foods subsidiaries are in the midst of
or are about to be in several expansion
initiatives. The largest will take place
at the company's John Morrell & Co.
plant in Sioux Falls, S.D. Smithfield is
investing $100 million to expand the
pork processing facility and add capacity for additional ham, bacon and sausage production.
The Sioux Falls expansion will include a deli-ham manufacturing system,
two precooked bacon lines, one precooked toppings line and a replacement
sausage manufacturing facility. The
project is scheduled to be completed in
the fall of 2007.
Smithfield Foods also is expanding
plants the Farmland Foods pork processing plant in Denison, Iowa. The
$81 million expansion is expected to
be completed in the late summer of
2007. The plant currently produces fresh pork, hams and bacon. Construction is under way on the 165,000square-foot addition that will increase
the processing capacity for smoked
sausage, ham slicing and hot dogs.
The expansion also will provide space
for the processing of an additional
1,150 hogs per day, raising the plant
capacity to 10,350.
Patrick Cudahy, Inc., another Smithfield Foods subsidiary, plans to invest
$13.5 million to expand its Golden
Crisp premium foods facility in Sioux
Center, Iowa.
4

MEAT&POULTRY

September 2005

appealed, the Eighth Circuit Court of
Appeals remanded the case for reconsideration under the existing statute.
The parties reached an agreement to
settle that case and U. S. District Judge
Robert Pratt signed an order approving
the settlement.
"We are pleased that we have been
able to reach an agreement with the
State of Iowa that benefits Smithfield
and its shareholders and is also good
for Iowa hog production at a time when
global competition is at an all time
high," said Richard Poulson, Smithfield
executive vice president.

MORRISTOWN, Tenn. - Approximately 700 workers at the Koch Foods poultry processing plant now have a voice on
the job with the United Food and Commercial Workers Local 1995. Workers
voted overwhelmingly in favor of union
representation earlier this month. The
company remained neutral throughout
the union campaign.
"Workers, the community and the
company are now working together to make a better workplace and
a better life for the 700 families at
Koch Foods," said Bill McDonough,

U.F.C.W. executive vice president and
director of organizing.
"When workers came together to demand better wages and working conditions, management responded positively. This process has been a positive situation for everyone," McDonough said.
The unionization at the Koch facility substantiates claims that a resurgence in union representation is occurring throughout poultry operations in
the South, including a plant in Alabama
owned by Atlanta-based Gold Kist, Inc.,
where a union drive is ongoing.

Tyson adjusts earnings
in wake of hurricane

Topps Meat Co. acquires
J&B Foods Corp.

SPRINGDALE, Ark. - Citing damage to
four of its Mississippi-based processing
plants caused by Hurricane Katrina, Tyson Foods, Inc. has revised its earnings estimates. The company estimated that the
storm's impact to be in the $10 million to
$20 million range. As a result, the company lowered its 2005 GAAP earnings guidance by 3 cents per share to a range of 92
cents per share to $1.02 per share.
The cost estimate reflects the loss of
some live bird inventory, the temporary
closure of processing plants and the loss
of frozen product that was in storage at
ports in Mississippi and Louisiana.
Tyson's four Mississippi poultry processing plants were idled by the hurricane, primarily because of the loss of
power. All four were back in operation
a week after the storm and are currently
running near pre-hurricane levels.

ELIZABETH, N.J. - Executives with
Topps Meat Co. have announced the
company's acquisition of J&B Foods
Corp. and its wholly owned subsidiary
J&B Meats Corp., Coal Valley, Ill.,
from North American Fund II, L.P.
Topps processes preformed, frozen
ground beef products and is expanding nationally.
J&B Meats is a diversified meat processor of ground and whole muscle
products for the foodservice segment.
"This acquisition complements
Topps' nationally known brand name
retail products and its growing food
service line," said Anthony D'Urso,
C.O.O. of Topps. "The combined company will now provide a full range of
meat products for retail and foodservice from processing plants on the East
Coast and the Midwest."

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Meat + Poultry - September 2005

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