March 28, 2011

Japanese demand for US pork imports stays strong

Japanese demand for pork imports remains strong following the earthquake and tsunami, a Smithfield Foods Inc. (SFD) executive said.

Smithfield, the largest pork producer in the US, reported some changes in pork demand following the Japan disaster, with Japanese imports shifting from frozen pork to more of fresh pork, said Chief Financial Officer Robert Manly at a Barclays Capital conference on Friday (Mar 25).

Manly said fresh pork is a higher margin product than frozen pork, and Smithfield will keep retail shelves stocked. The shift away from frozen supplies is likely fuelled by a drop in demand from pork processing facilities in Japan.

Japan is the leading market for Smithfield, accounting for 24% of the company's export volume and 41% of its export sales. In the long run, Smithfield will benefit from the increase in demand for pork, he said.

Smithfield is seeing extraordinary margins in its fresh pork production business, said Manly. But, these returns are unsustainable and is unlikely to repeat in the next fiscal year, he said.