WASHINGTON, D.C. (May 30, 2013) — Chinese food company Shuanghui International said Wednesday it plans to buy Smithfield Foods, the biggest pork producer in the United States.
This raises the prospect of the food industry, which has become highly concentrated in recent years, falling into foreign hands. This is a troubling development for farmers, who face monopoly power already, and consumers, who will have little oversight over how their meat is produced, says New America Schwartz Fellow Chris Leonard, a journalist who has covered the industry extensively.
Chris Leonard covered Smithfield Foods as the Associated Press National Agribusiness Reporter from 2008-2012. He has completed a book on the industrial meat system, to be released by Simon & Schuster. The book, and Leonard’s reporting, documents Smithfield’s rise as the nation’s biggest pork producer.
Leonard has reported on how U.S. policies allowed Smithfield to consolidate by buying its competitors and gaining unprecedented control over the means of hog production in the U.S. with an economic model called vertical integration. Smithfield has taken control of the hog industry, much as Wal-Mart took over small town commerce by putting the town square out of business.
In modern hog producing towns, Smithfield owns the local slaughterhouse, the feed mill and the pig breeding facilities. Farmers take out huge loans to build factory farms, but Smithfield still owns the hogs that farmers raise.
Smithfield’s consolidation has shifted wealth from rural communities to Wall Street. Now that wealth will likely be shifted to China.
The sale could raise troubling issues for consumers as well. Smithfield runs a largely opaque food system, located in remote, rural communities. Many states make it illegal to covertly videotape Smithfield’s hog farms.
This means consumers have a hard time knowing exactly how Smithfield produces the pork they eat. Avoiding Smithfield products, even if you wanted to, is all but impossible, since so much of the company’s pork is unlabeled. Smithfield’s potential new owner, Shuanghui International, has a deeply troubling history of food safety violations in China.
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