US meat processor Smithfield Foods said it had a “challenging” fiscal 2012/2013 as it booked a drop in full-year profits.

Smithfield, which last month agreed to a takeover bid from China’s Shuanghui International, said today (14 June) earnings in the 12 months ended 28 April dropped to US$183.8m, a 49.1% decrease on the prior year. Operating profit in the period amounted to $519.3m, a 28.1% drop on last year.

CEO Larry Pope said Smithfield was hit by higher grain prices as a result of last summer’s drought, in addition to disruptions in export markets. Pork exports for the industry were also down in nearly every major market, with volumes to China and Russia falling over ractopamine certification requirements and the weakening yen.

Sales, however, edged up 0.9% to $13.22bn.

Smithfield, which expects its sale to Shuanghui to close in the second half of this year, said it will continue to “execute its growth plan” in 2014 to improve its earnings stream and migrate the business further towards becoming a consumer packaged meats company.

Click here for our coverage of Shuanghui’s offer for Smithfield.