Analyst Says Smithfield Reopening A 'Positive Sign'

May 11, 2020

Smithfield Foods has resumed operations at its Sioux Falls, South Dakota pork processing plant.

It's one of the largest pork processing facilities in the U.S., representing four to five per cent of American pork production.

"It is a positive sign, that it's possible to get back up and running within 2 weeks of a pretty major outbreak," said Tyler Fulton, Director of Risk Management with Hams Marketing Services. "The reality is the industry is still hamstrung by really limited capacity and now that is being represented in the cash price that producers are being paid, which is very unprofitable."

Fulton notes forward hog prices are also in rough shape.

He added that demand for pork in China and Japan remains high.

"The evidence suggests that it's still very, very good. To be clear, there's still a massive shortage of pork in China due to African swine fever and they have been active buyers of North American pork."

Fulton says while demand is good, the volume of North American pork being exported is likely not very good due to a lack of processing capacity.

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