June 12, 2013 — The full impact on the U.S. pork industry of a pending merger of Smithfield Foods — the world's largest pork producer — with Chinese firm Shuanghui is not yet known but no changes are expected at the Grayson plant.
Keira Lombardo, Smithfield’s vice president of investor relations and corporate communications, issued the following statement to the Journal-Times on Monday: “There will be no closures of Smithfield facilities and locations and Smithfield's existing workforce will remain in place.”
The Grayson plant is among nine pork processing facilities operated by Smithfield Packing, Inc., a subsidiary company of Smithfield Foods.
The plant employs several hundred workers.
On a national level, the merger could provide new market opportunities for U.S. hog producers and also offer Shuanghui the opportunity to adopt Smithfield's health, sanitation and environmental standards.
"The largest potential advantage for the U.S. pork industry is that Shuanghui is the largest processor and distributor of meat products in China," said Chris Hurt, Purdue University agricultural economist.
"China is the largest producer and consumer of pork. At this early stage it is unclear if this merger will result in more U.S. pork products being exported to China,” he added. “However, this clearly opens the trade door for increased business with China, which already was the third-largest destination for U.S. pork in 2012."
But the merger isn't without risks, Hurt said. Large corporations can sometimes fail to adapt to quickly changing global markets. It also raises concerns among U.S. producers and consumers about the loss of U.S. ownership and what that means for U.S. control.
Another concern, Hurt said, is that while the United States and China are trading partners, the countries have very different social and political policies, which could play into whether the merger can be finalized.