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Smithfield to form new hog production company ahead of IPO

Smithfield Foods has inked a deal with VisionAg, an affiliate of North Carolina’s HD3 Farms, to start a new hog production business early next year as the meat producer gears up to go public, the company announced Friday.

Smithfield, a giant in packaged meats and pork products, will provide 28,000 sows to the new company, VisionAg Hog Production, a limited liability company licensed in Cary, North Carolina. VisionAg Hog Production will also own market hogs the sows produce, a number expected to reach 600,000 annually, and those animals will be produced for Smithfield’s fresh pork operations, according to the announcement.

Smithfield will provide feed, transportation and other services to the new company, and will own a minority interest. Financial terms were not disclosed Friday.

HD3 Farms, based in Elizabethtown, North Carolina, has worked as a contractor with Smithfield for more than two decades and has 250,000 wean-to-finish and finish spaces for hogs on farms in several counties in eastern North Carolina.

The largest pork producer in the United States, Smithfield Foods has about 35,000 employees nationwide and is owned by China’s WH Group, based in Hong Kong. Earlier this year the parent company announced the proposed spinoff and initial public offering of Smithfield Foods on a U.S. stock exchange. WH Group shareholders voted Dec. 6 to approve spinning off Smithfield Foods.

In September, Smithfield’s European operations were carved into an independent subsidiary now known as Morliny Foods, part of a streamlining effort before going public.

Smithfield Foods also said it would transfer some of its hog farming operations to a venture controlled by Murphy Family Ventures in North Carolina, Bloomberg reported earlier in December.

According to an announcement in November, Smithfield’s IPO will take place in early 2025, and WH Group plans to offer up to 20% of Smithfield’s stock shares, reducing the parent company’s ownership to 80%. Smithfield recorded a net asset value of $5.38 billion as of Sept. 30, and its New York share offering is expected to be valued at $5.4 billion.

Boar’s Head to indefinitely shutter Va. facility tied to fatal listeria outbreak

Deli meat company Boar’s Head Provisions Co. is indefinitely shutting down its meat production facility in Jarratt, the source of a listeria outbreak that killed at least nine people and hospitalized 57 others.

The plant has not been operating since late July. The Centers for Disease Control and Prevention opened an investigation on July 19.

On July 31, the United States Department of Agriculture’s Food Safety and Inspection Service notified Boar’s Head it was withholding its federal marks of inspection and suspending the operations of ready-to-eat products at the Jarratt facility. The suspension “will remain in effect until you provide the Raleigh District Office with adequate written corrective and preventive measures to assure FSIS that you can demonstrated a program that meets the regulatory requirements,” according to the USDA notice.

In the past year, government inspectors logged 69 instances of “noncompliance” with federal rules at the deli meat plant, according to documents obtained through Associated Press public information requests. The reported instances included mold, insects, liquid dripping from ceilings, and meat and fat residue on walls, floors and equipment.

Of the nine deaths tied to the outbreak, one each was reported in Virginia, Illinois, New Jersey, Florida, Tennessee, New Mexico and New York, and two were reported in South Carolina. All nine people who died were older than age 70. The 57 hospitalizations occurred across 18 states, and those hospitalized ranged from ages 32 to 95, although it is likely that more people were ill but recovered without being tested for listeria, according to the CDC.

The USDA notice followed Boar’s Head’s July 25 recall of its Strassburger Brand Liverwurst from the affected facility. On July 29, the food manufacturer expanded its voluntary recall to every item produced at the Eastern Virginia facility, after testing confirmed listeria infections in the products were connected to the outbreak. The expanded recall included about 7 million pounds of 71 ready-to-eat products produced under the Boar’s Head and Old Country brands.

In an update Friday, Boar’s Head said it was permanently discontinuing its liverwurst product and indefinitely closing the Jarratt plant. The company conducted an investigation of how the liverwurst product became contaminated, according to the announcement, which “identified the root cause of the contamination as a specific production process that only existed at the Jarratt facility and was used only for liverwurst.”

Regarding employees at the facility, Boar’s Head said in its update: “It pains us to impact the livelihoods of hundreds of hard-working employees. We do not take lightly our responsibility as one of the area’s largest employers. But, under these circumstances, we feel that a plant closure is the most prudent course. We will work to assist each of our employees in the transition process.”

About 500 union workers were employed at the plant, Jonathan Williams, the United Food and Commercial Workers Local 400 union spokesperson, told The New York Times. Boar’s Head is providing severance packages and relocation to the employees, according to Williams. Employees were given the option to work at the company’s plant in Petersburg or to transfer to facilities in other states.

Boar’s Head also announced several new food safety and quality measures. The company will appoint a new chief food safety and quality assurance officer, who will report directly to its president. Boar’s Head is recruiting for the new role now and plans to have the executive “begin as soon as possible.”

Second, Boar’s Head said, it is establishing a food safety council composed of independent food safety experts to help with the implementation of new quality assurance programs and advise the new food safety executive and the company.

The founding council members are:

  • David Acheson, president and CEO of The Acheson Group
  • Mindy Brashears, director of the International Center for Food Industry Excellence at Texas Tech University
  • Martin Wiedmann, Cornell University’s Gellert Family Professor in Food Safety and co-director of the New York Integrated Food Safety Center of Excellence
  • Frank Yiannas, the former deputy commissioner for food policy and response at the U.S. Food and Drug Administration.

Third, the company will create “an enhanced companywide food safety and QA program” that will be led by the new C-suite executive.