Piggy in the middle

31 October 2018 By Katrina Hamlin Follow @KatrinaHamlin

WH Group, $11 bln owner of U.S.-based Smithfield, is fighting a losing battle on two fronts. Deadly swine fever is sweeping China, while tariffs hammer its American market. Quarterly earnings fell by almost a third from a year earlier. It will get worse before it gets better.

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WH Group’s net profit shrank by 31 percent to $199 million from a year earlier, according to a Reuters comparison of nine-month results released on Oct. 30 with earlier interim results.

The U.S. pork trade to China is "not viable" after Beijing imposed tariffs on imports of American pork, Smithfield Foods Chief Executive Ken Sullivan said on Oct. 26. African swine fever could also hurt pork shipments worldwide next year, according to Sullivan. Smithfield Foods is a wholly-owned subsidiary of the Hong Kong-listed WH Group.

In April, China imposed a 25 percent import duty on most U.S. pork products. U.S. pork and soybeans also were included in a second round of tariffs Beijing introduced in July.

China has already culled around 200,000 pigs due to an outbreak of the highly contagious disease.

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