Smithfield Buys ConAgra Feedlots

No sooner did ConAgra take back control of its feedlots than it sold them.  Smithfield Beef Group, a subsidiary of Smithfield Foods, Inc., Oct. 19 announced that it bought MF Cattle Feeding, Inc., from ConAgra Foods, Inc.  This covered three cattle feedlots in Colorado and one in Idaho.

The one-time feeding capacity of the feedlots, which will be operated by Smithfield’s Packerland subsidiary, is 357,000 head. The sale did not include any of the cattle currently located on the feedlots owned by ConAgra. Terms of the transaction were not disclosed.

“This acquisition is a long-term strategic fit for the Smithfield Beef Group,” said Richard V. Vesta, president. “This move addresses our cattle procurement concerns west of the Mississippi River and provides a new earnings stream for our business.”

In the annual Directions list printed in National Cattlemen magazine, Smithfield Foods was the fifth largest beef packer in the country.  It has five processing plants and a daily capacity of 8,000.  Its yearly slaughter totals around 2 million head.

ConAgra was listed in Directions as the third largest feeder with a capacity of 440,000 head.  It sold the feedlots to Swift Foods in 2002, and on Sept. 29 excercised an option to take them back.  The feedlots were security for about $300 million in financing provided by ConAgra as part of the sale of its red meat business in 2002.  That sale created Swift Foods, in which ConAgra owned a minority interest.

 Smithfield Foods is the leading processor of fresh pork, as well as the largest hog producer.