Smithfield blames the media…

May 15, 2009

Last Friday, it was AIG (AIG) that was blaming the media for its woes. This week, it’s Smithfield Foods’ (SFD) turn.

In this presentation filed as part of an 8-K earlier this week and given by Smithfield President C. Larry Pope on Wednesday, Smithfield noted that between April 23-26, “media and blogs speculate on possible link between flu and Smithfield joint venture in Veracruz”. We’re guessing that this story in Grist is one of the ones that Pope was referring to in his presentation at the BMO Capital Markets “Agriculture, Protein and Fertilizer” conference. (Side note: they need to come up with a better name for that conference since protein and fertilizer don’t seem to go well together). And that’s just the tip of the media iceberg judging by quick search that I did on Smithfield and Veracruz.

Just yesterday, Pope sent a letter to all Smithfield employees that provided a few more details on the testing going on in Veracruz and noted that the flu formerly known as swine had been renamed A(H1N1) by the World Health Organization.

But back to the slideshow, which started out with the much-circulated picture of a cute-looking kid kissing a pig. Smithfield’s headline on that slide: “Swine Flu Tip: What Not to Do”. Despite starting off with a bit of a tasteless joke, there were several interesting slides in the deck, including pg. 10, which showed a sharp increase in pork exports over the past two years (though a modest decline since March). There was also a few slides devoted to the company’s previously announced restructuring plan and a few others on the company’s debt reduction. And slide 38 had a very interesting comparison of pork prices worldwide, which showed that there were only three countries with cheaper pork prices — Brazil, Chile and somewhat surprisingly, Canada.

One final note about the slides: On page 8, they show pictures of what are presumably pig “farms”. Call me crazy but the large metal sheds tucked behind barbed wire fences don’t exactly stimulate the appetite.

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