China’s largest pork processor is buying Smithfield Foods, the largest pork processor in the United States for $4.7 billion.
Paragon economist Steve Meyer says this deal just made good business sense for China verses importing cheaper U.S. grain to feed to their own hogs for production. He believes it will translate into more Chinese pork business for U.S. producers.
Meyer says the deal should also help ease concerns regarding pork produced with ractopamine, as well as other sanitary and phytosanitary issues the Chinese have had in the past.
And Meyer says the acquisition does not change the concentration level in the pork processing business.
The completion of the deal is pending U.S. government approval and a green light from the Committee on Foreign Investment on the U.S. However, Meyer anticipates no regulatory red flags.