Smithfield Foods Pork Business Recovery: Forecasts and Prospects

Pork Segment Rebounds

Amid rebounding pork demand in CHINA, Smithfield Foods reported higher sales and adjusted profit in the second quarter ended June 29. Pork operating profit was $22 million, a significant improvement from a loss of $2 million in the same period last year. However, the company’s shares were down about 1%, reflecting lower quarterly operating profits in its processed and fresh pork segments.

2025 Outlook

Smithfield Foods expects adjusted operating profit in 2025 to be between $1.15 billion and $1.35 billion, up from its previous guidance of between $1.10 billion and $1.30 billion. The improvement is due to process optimization and a rebound in EXPORT shipments, giving the company a positive outlook for the future.

Impact of Tariffs on Business

Smithfield has faced significant challenges since the imposition of high tariffs on US pork in China, which reached 172% in early 2025. In April 2023, the company said that China had become an “unviable market” due to retaliatory measures. However, since May 2023, tariffs have been reduced to 57%, opening up new opportunities to resume exports.

To minimize the risks, Smithfield has reduced its own hog production and increased purchases from third-party producers. In 2025, the company plans to raise about 11.5 million HEAD of pigs, which is significantly lower than the 14.6 million in 2024. This decision is due to the need to adapt to changing market conditions and optimize costs.

Reducing Feed Costs

One of the key factors contributing to the recovery of the pork business was the decline in feed prices, which are the main expense item in the industry. This allowed Smithfield to reduce costs and improve financial performance.

Exports and new opportunities

CEO Shane Smith noted that Smithfield was able to overcome the effects of the tariff conflict by reorienting supplies to alternative markets and distribution channels, as well as resuming exports to China. In the second quarter, operating profit in the fresh pork division decreased by 39% to $35 million, although sales increased by 5%, reaching $2.1 billion. According to the company, exports in 2024 will account for 13% of Smithfield's total sales, of which 3% came from China.

The recovery of Smithfield Foods' pork business amid an improving market situation and lower tariffs opens up new prospects for the company. Successful adaptation to changing market conditions and optimization of production processes allow Smithfield to confidently predict growth in operating profit in the future, making it one of the leaders in the MEAT processing industry.