Smithfield Ham (Smithfield Foods, Inc.) Sold to the Chinese

Not that I buy many of their products, but this is a pretty big deal.

http://www.npr.org/blogs/thetwo-way/201 ... 72-billion

NPR wrote:The makers of Smithfield Ham, an icon on America's culinary scene for decades, are selling the publicly traded company to China's Shuanghui International Holdings Limited for about $4.72 billion in cash. The deal also includes an exchange of debt.

The purchase values Smithfield Foods at $7.1 billion — a figure that would make the purchase "the largest Chinese takeover of a U.S. company," according to Bloomberg News.

In addition to Smithfield, the company's brands include Armour, Eckrich, Gwaltney, Kretschmar, and others. The company's roots stretch back to 1936, when the Luter family opened a packing plant in Virginia.

Now, if they'd just export all those crappy, mass-produced hams back to China, it'd be a perfect ending. Though, the Chinese don't really deserve that, either.

=R=

Just a minor clarification. Smithfield Ham is actually a term defined by the Commonwealth of Virginia, and has nothing to do with Smithfield Foods Inc (NYSE ticker: SFD), which (along with its Smithfield Packing Co. subsidiary is being sold to a Chinese company). Smithfield Ham is effectively an AOC.

VA Code § 3.2-5419 wrote:Genuine Smithfield hams are hereby defined to be hams processed, treated, smoked, aged, cured by the long-cure, dry salt method of cure and aged for a minimum period of six months; such six-month period to commence when the green pork cut is first introduced to dry salt, all such salting, processing, treating, smoking, curing, and aging to be done within the corporate limits of the town of Smithfield, Virginia.

Smithfield the company, could make Smithfield Ham (and I believe they do), but Smithfield Hams are made by a number of companies based in Smithfield, Virginia.

Mmm... ham.

-Dan

My only concern is that they may stop their pre-marinated pork roasts. When very short on time, they are great to put into the pressure smoker and deliver "pulled pork" to whatever function the kid signed me up for. Cheap, easy, and usually "on special" (as in permanently! at a few stores).

I'm sure that the food standards are not going to be changed with new owners, it will just be interesting to see what percentage gets shipped overseas. That and several groups are already announcing their intention to fight this.

Hopefully the bacon consistancy from their plant in Cudahey will improve.

exvaxman wrote: put into the pressure smoker

What's a pressure smoker?

I'm not familiar with the term/phrase.

A pressure smoker is a pressure cooker with an extra heated element to use wood chips to produce smoke inside the unit. The newer versions also allow for cold smoking (cheese, fish) as well as traditional pressure cooked smoked meats.

Here are some Amazon links:
http://www.amazon.com/Electric-Smoker-- ... ure+smoker

http://www.amazon.com/Express-Stainless ... ure+smoker

http://www.amazon.com/Lil-Smoke-Electri ... ure+smoker

dansch wrote:Smithfield the company, could make Smithfield Ham (and I believe they do), but Smithfield Hams are made by a number of companies based in Smithfield, Virginia.

Exactly, and I understand your point completely. Smithfield Foods, the company in question, makes Smithfield "brand" Ham (which I wouldn't eat on a bet), as opposed to Smithfield "style" ham (which is some good stuff when made by an artisan). I've clarified the title of the thread and my OP to avoid confusion.

If memory serves from when I was working with a customer in the area, Smithfield, NC objected to the Virginia "Smithfield ham" designation. A "taste off" was arranged between the two towns many, many years ago and the NC produced ham won the tasting. Virginia refused to enter the competition on the next invitation. I do not remember the date of the contest, pre-television era when people looked elsewhere for entertainment.

KY, TN, VA - all produce delicious country hams.

NC should stick to BBQ.



-Dan

I'll agree with the Ky ham. When I was living in Shelbyville, there was an 80 year old who took orders for hams, as I was a new neighbor he made an exception and let me order a couple rather than be put on his (long, word of mouth) waiting list. Incredible guy, 80 years old (I picked him up seeing him walking on the rural road) and he offered to split firewood for me since his son would not let him farm anymore and he needed a job. Just awesome. After I moved away I was thrilled to see him in a food magazine listed an one of the best hams. NC does make some great hams. When I had a weekend free I would visit a lot of the places. I had to because where I was there was no NPR coverage and I had to drive at least 70 miles to listen to my saturday morning shows. (pre-cheap internet/wireless).

Anyway - back on track. A friend thought that the Smithfield Ham VA/NC "showdown" was in the 1930's.

Hold on just a minute . . .

In the largest Chinese acquisition of an American company, the Shuanghui Group said it would buy the nation’s largest pork producer for $4.7 billion. But not so fast, says Congress.

Chinese Pork Takeover Faces Congressional Scrutiny

=R=

exvaxman wrote:If memory serves from when I was working with a customer in the area, Smithfield, NC objected to the Virginia "Smithfield ham" designation. A "taste off" was arranged between the two towns many, many years ago and the NC produced ham won the tasting. Virginia refused to enter the competition on the next invitation. I do not remember the date of the contest, pre-television era when people looked elsewhere for entertainment.

Yay!

Q: How many Virginians does it take to change a light bulb?



A: Three -- One to replace the bulb, and two to talk about how good the old one was ...

sdbond wrote:

exvaxman wrote:If memory serves from when I was working with a customer in the area, Smithfield, NC objected to the Virginia "Smithfield ham" designation. A "taste off" was arranged between the two towns many, many years ago and the NC produced ham won the tasting. Virginia refused to enter the competition on the next invitation. I do not remember the date of the contest, pre-television era when people looked elsewhere for entertainment.

Yay!

Q: How many Virginians does it take to change a light bulb?



A: Three -- One to replace the bulb, and two to talk about how good the old one was ...

sdbond,

Where I grew up, a case of diarrhea was commonly referred to as "North Carolina Heartburn."

Evil Ronnie wrote:

sdbond wrote:

exvaxman wrote:If memory serves from when I was working with a customer in the area, Smithfield, NC objected to the Virginia "Smithfield ham" designation. A "taste off" was arranged between the two towns many, many years ago and the NC produced ham won the tasting. Virginia refused to enter the competition on the next invitation. I do not remember the date of the contest, pre-television era when people looked elsewhere for entertainment.

Yay!

Q: How many Virginians does it take to change a light bulb?



A: Three -- One to replace the bulb, and two to talk about how good the old one was ...

sdbond,

Where I grew up, a case of diarrhea was commonly referred to as "North Carolina Heartburn."

Ouch! That's a new one on me -- did you live somewhere near the border of a neighboring state? That seems to be where most of these "friendly" insults start. I first heard the "lightbulb" joke when I was living in Virginia, but only 7/10 of a mile over the NC state line. Since I had the power and fun of a weekly newspaper column, I used it from time to time to needle the natives who could trace their heritage back to an original land grant from King Charles. I kept the letters inviting me to move back those 7/10 of a mile!

sdbond,

Yes, right over the state line. Tidewater area.

Evil Ronnie wrote:sdbond,

Yes, right over the state line. Tidewater area.

Ah ... I was at the other end of Route 360, in Southside Virginia.

According to this informative bit of analysis over at the New Yorker's website, by Lauren Etter, the deal is expected to go through . . .

The truth is that the sale faces few serious stumbling blocks. It’s unlikely that the foreign-investment committee will stop it. Only the U.S. President has the authority to suspend a transaction while it’s being reviewed by that committee; and just twice in American history has a President done that. (Both suspensions, it so happens, were transactions involving Chinese companies.) Virtually no one can stop a deal after the committee has approved it, and in this case, the Smithfield deal is expected to win approval. Smithfield shareholders are set to vote on it next month, and the company has said it plans to close the sale in the second half of this year.

Pork and Protectionism in America

=R=

Interestingly (to me anyway) in light of all this, when I was researching a recipe that I'd come to love in China, I found that Smithfield Ham was recommended, because, of all American hams, it was most like the highly regarded Jinhau ham of China. One wonders if China thinks they're going to be getting more real Smithfield-style ham.

That said, pork is definitely "what's for dinner" in most of China, so they may just want more hog in any form.

Cynthia wrote:Interestingly (to me anyway) in light of all this, when I was researching a recipe that I'd come to love in China, I found that Smithfield Ham was recommended, because, of all American hams, it was most like the highly regarded Jinhau ham of China. One wonders if China thinks they're going to be getting more real Smithfield-style ham.

That said, pork is definitely "what's for dinner" in most of China, so they may just want more hog in any form.

It would be kind of ironically funny if the Chinese were buying a pig in a poke, so to speak.

Pending shareholder approval, the deal appears to be done . . .

The Committee on Foreign Investment in the U.S., or CFIUS, approved the transaction and it will be voted on by Smithfield shareholders at the company’s annual meeting Sept. 24. The government of Ukraine also approved the deal, according to the statement.

Smithfield Receives U.S. Approval for Biggest Chinese Takeover

=R=

I wonder what this will do to the price of pork products here. If China is buying Smithfield because the Chinese are such huge consumers of pork, will that create shortages here?

As the second graph in this article shows, China is far and away the world's leading pork producing-country, producing more than the rest of the top ten pork-producing countries combined. Another way to think of that is, as another article puts it, that more than half of all the pigs in the world live in China. (Among individual companies, though, Smithfield is the world's largest single pork producer.) Nonetheless, as a result of its economic growth and increasing demand for and ability to pay for meat products, especially among China's rural populace, China became a net importer of pork five years ago. Among the interesting tidbits in this article are that the Chinese government imposes price controls on pork and that it maintains a strategic pork reserve.

Demand for pork is up worldwide, as a result of last year's drought and redirection of feed corn to ethanol production, so in the short term, pork prices are expected to rise. In the long run, however, as this article discusses, any decrease in pork supply in the US resulting from exports to China will be met by other US producers. Or so that's how the market watchers see it.

China has more pigs than other countries, but most of them are owned privately by a billion or so citizens who keep one or two for the family. So it produces a lot of pork, but it doesn't sell much. And, with people moving into cities at a stunning rate, there are fewer people able to just go into the yard and kill dinner. So they definitely need to import pork for their growing urban populations.

The majority of hog production in China is indeed still small-farm and "backyard" production, but that is rapidly changing, as more and more large producers enter the field:

"China’s vibrant labor market and an increase in school attendance have absorbed slack household labor that was traditionally used for small-scale “backyard” hog production. According to industry reports, the number of rural households raising hogs has been in decline since 2007. And as these small-scale farms exit the industry, they are increasingly being replaced by larger commercial-scale farms operated by companies or farmers who specialize in raising hogs … very large 10,000-head farms are becoming more common in China."

http://www.wattagnet.com/Chinese_pig_production,_pork_imports_continue_to_grow.html
http://www.ers.usda.gov/media/262067/ldpm21101_1_.pdf