Source: Rita Jane Gabbett, MEATINGPLACE, 11/7/11

Smithfield Foods started today a three-city tour of investor meetings at which it is projecting a strong profit outlook for the pork business.

In a presentation prepared for presentation in New York, Boston and Chicago this week, the company projected hog production profitability will average in the range of $10 to $15 per head over the next 12 months, noting that in recent months corn prices declined while hog futures prices rose.   

Smithfield set a 3 percent volume growth goal for packaged meats in fiscal 2012, which began in May 2011. It projected packaged meats profits at the high end of the normalized operating profit range of 10 cents to 15 cents per pound.

For the 12 weeks ended Oct. 9, Smithfield showed its strongest year over year packaged meat product volume growth in Smithfield brand boneless ham steaks (up 138 percent), followed by a 23 percent rise in both branded bacon and tub lunchmeats volume sales.

For fresh pork, Smithfield projected “very strong exports” in fiscal 2012. January through August this year Smithfield exported 24 percent of the pork it produced, compared to 20 percent during 2010.

Smithfield also outlined what it called a conservative balance sheet, noting liquidity of $1.2 billion compared to a 2012 target of $500 million to $1 billion. In a chart titled “Uses of excess cash” Smithfield listed “acquire branded packaged meat companies” as one option. Others included: reinvest in packaged meats business, share repurchases, extraordinary pension contribution and debt reduction.

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