Attorney General's News Release

June 13, 2007

Nixon agreement with Smithfield will protect jobs, farmers and the environment; MU to receive $250K in scholarships

Jefferson City, Mo. — Attorney General Jay Nixon has reached an agreement with Smithfield Foods, the world’s largest hog producer, that will protect jobs in north central Missouri, preserve contracts with Missouri farmers, keep intact groundbreaking technology to protect the environment and establish $250,000 in scholarships for students at the University of Missouri.

Smithfield has acquired the largest hog producer in Missouri, Premium Standard Farms (PSF), in a merger that was reviewed by the Attorney General’s Office for compliance with state anti-trust and anti-competition laws. The merger proposal was approved by the Antitrust Division of the U.S. Department of Justice on May 4, 2007. Nixon said today’s agreement will help ensure that advances made by his office under settlements with PSF to protect the economy and the environment will remain in place.

“Eight years ago, we announced a ground-breaking settlement with PSF that has brought next generation technology to the treatment of hog waste and the control of odors,” Nixon said. “Smithfield will continue that obligation to be a 'good neighbor’ to residents of north central Missouri in a seamless fashion and under our continued oversight.”

The agreement between Nixon and Smithfield also addresses several other points:

• Smithfield will commit to increasing staffing at the PSF Missouri facilities, including an estimated 75 new full-time jobs that will allow it to meet increased production levels as a result of its Milan plant expansion;
• Smithfield/PSF will provide monthly reports to the Attorney General’s Office about total purchase of hogs from independent Missouri hog producers to demonstrate its commitment to maintain a healthy, independent hog-growing industry in Missouri;
• Contracts that PSF has with contract growers and suppliers in Missouri will be honored; and
• PSF will help ensure the employment eligibility status of newly hired employees by participating in the U.S. Department of Homeland Security’s Basic Pilot Program.

The agreement also is a win for the communities where PSF is located and for Missouri college students pursuing degrees in veterinary science or agricultural economics, Nixon said. Smithfield/PSF and community leaders will work with the Attorney General’s Office to identify appropriate community programs to be funded by Smithfield, PSF or related entities. The programs will be designed to benefit the community generally, as well as PSF employees, and will be funded at a minimum of $100,000 each year.

Smithfield/PSF also will make a gift of $250,000 to the University of Missouri - Columbia to provide funding for a scholarship endowment of $150,000 to the veterinary school and a scholarship endowment of $100,000 to benefit students majoring in agricultural economics.

“Educational training in these fields is vital for Missouri to continue to be a national leader in agriculture,” Nixon said. “At a time when many Missouri families struggle with paying the costs of college and with student loan rates rising, I am proud that this agreement will set up these scholarship endowments for Mizzou students who choose these fields.”

In 1999, Nixon obtained a landmark court order that required Premium Standard Farms to spend $25 million to implement next generation technology in order to reduce pollution from its facilities in five northern Missouri counties. The facilities contain hundreds of thousands of hogs. As a result, PSF put into place the largest wastewater treatment plant at a hog facility in the country, and there has been a 90 percent reduction in the land application of hog waste and in the amount of nitrogen in the waste that has been applied. PSF also paid a $1 million fine because of past environmental violations.

An update to the court order in 2004 lifted the $25 million spending cap so PSF could spend more on the technology and, Nixon said, put PSF on an even more progressive path by turning recycled animal waste into commercial fertilizer.

The Attorney General’s Office continues to provide oversight on the progress of fully implementing the next generation technology. Additional work remains to be done, Nixon said, and his office will stay on top of Smithfield to ensure that the work is done by the new owners.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818