The world’s largest pork producer, Smithfield Foods, is set for acquisition by Chinese meat processor Shuanghui pending review from the Justice Department and the Committee on Foreign Investment in the U.S.
The news has raised concerns, notably from Iowa Senator Chuck Grassley, who argues that Smithfield’s vertical integration, while a selling point in the takeover, leaves independent producers with less choices of whom to buy from and sell to. Grassley also takes issue with a lack of shareholder oversight with a private Chinese food company in control of a major food supplier, which he says could have grave implications for national security.
President of Des Moines-based Paragon Economics Steve Meyer says those concerns are a “red herring.” Meyer argues that worries over food safety are misplaced, and that even with new ownership, Smithfield will still produce pork according U.S. standards.
This purchase of Smithfield does not mean that Chinese product is going to come to the United States, it means we’re going to have better access to the Chinese market through this company. So, I just don’t see any real grounds to have food safety concerns here in the United States; I think shipping high-quality product from the United States to China actually improves the situation there.
Meyer adds that pork exports will increase with the takeover, creating a void in supply that domestic producers will have an opportunity to fill.
Somewhat counter-intuitively, the move could also be positive for critics of the pork industry. Vice President of Farm Animal Protection with the Humane Society of the United States Paul Shapiro says that ideally, pork won’t be the only export headed to China.
My hope of course is that perhaps some of these animal welfare policies, like a phaseout of gestation crates for pigs, will be exported to China, and their breeding pigs will not be in gestation crates either. Because, keep in mind, Smithfield’s commitment to get rid of gestation crates is not just in the United States. It’s made similar commitments in other countries in which it operates: in Eastern Europe and Latin America.
