Bankrupt farm cooperative Farmland Industries has said it will auction off its US beef packing business, Farmland National Beef, and has already received an initial bid of US$232m from its joint venture partner, US Premium Beef.

US Premium Beef already owns a 29% share of the business, which is the fourth-largest US beef processor. Missouri-based Farmland said the auction will begin on 9 July.

Farmland has sold off nearly all its other assets, but still holds its pork business. US pork producer Smithfield Foods has already attempted to take over Farmland’s meat businesses to no avail and may bid for the beef packing unit.

"Smithfield is evaluating whether we want to continue pursuing the beef business," Adam Weiner, a company spokesman, was quoted by Reuters as saying. "As far as the pork business goes, we remain interested in that and we are participating in that process."

When Farmland filed for bankruptcy in May 2002, its beef business was not part of the filing as it is structured as a separate company. Farmland is selling its share in the unit to generate cash to pay down debts.