US meat processor Smithfield saw third quarter profits plummet 15% due to higher feed prices and a weak performance of its hog unit.
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Smithfield said third quarter profits slumped from US$71m, or $0.63 per share, for the third quarter of last year to US$60.4m, or $0.54 per share.
The company said higher grain and corn prices increased the price of hog production. Ultimately, Smithfield said, this cost will be passed along to consumers through price hikes
“Given the adverse conditions in hog production and cattle feeding, I am reasonably satisfied with our third-quarter results,” chief executive C. Larry Pope said in a statement.
However, the group said sales were up from $2.9bn to $3.3bn, with pork and beef sales increasing by 19% and 6% respectively.
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By GlobalDataIn February, the company said it expected earnings of between $0.53 and $0.56 per share.
Smithfield has increasingly been focusing its business on value-added products in order to negate the ups and downs of commodities markets. Last year, the meat processor bought ConAgra’s refrigerated meats unit and some of the European meat operations of Sara Lee. Smithfield expects to complete the purchase of US meat company Premium Standard Farms in the near future.
