It says the reasons are lower prices for fresh pork and live hogs.
The West Coast port slowdown and higher pig production hurt fresh pork profits, the company said, adding that it sees its exports to China picking up considerably over the balance of the year.
The overall pork industry should see higher hog production profits in the second and third quarters, Ken Sullivan, Smithfield’s chief financial officer, said on a conference call with analysts.
China’s sow herd liquidation may be as large as the entire U.S. herd of 6 million sows, Sullivan said.
“If that number is anywhere near accurate, or anywhere near correct, it would suggest a significant need and demand from China,” he said.
The first quarter followed outstanding profits in the previous quarter which ended the fiscal year.
Smithfield has said it’s once again shopping for companies to buy.
Maybe Smithfield will buy Maple Leaf Foods now that the company has shed almost all of its non-core assets and has a new processing plant up and running at Hamilton. Smithfield executives certainly know a lot about the Schneider part of the business because they sold it to Maple Leaf.