A Message from Dhamu Thamodaran

Dear Smithfield Foods Employees,

Happy New Year to you; I am hopeful that 2012 will be a great year for our company and for you personally. In past letters, our executives have tried to shed some light on their particular area of expertise, and this letter will be no different. My group works in commodity market research and hedging activities-conducting analysis of commodity markets to provide intelligence to our sales/marketing teams, our customers, and of course to our corporate management. I hope this letter gives you a snapshot of our efforts, and how this information is used to enhance our corporate strategy.

First and foremost, our insight into these markets gives us a way to build partnerships with key customers. We offer forward pricing options and market intelligence, helping us to become a supplier of choice and therefore enhancing our effort to become a premier global packaged meats company.

Second, our effort helps our company mitigate risk that stems from commodity market volatility. Because hog production is a large segment of our company, grain costs are of utmost importance to us. Efforts to predict and forecast these markets help our management make educated decisions when hedging forward feed costs.

Third, this type of market research helps to stabilize margins in the hog production group. In the past, when our company has had a rough year financially, it has been due to high grain prices or low hog prices. Our strong hedging program helps us to now manage hog production margins to stabilize earnings and limit any downside impact to our company's overall earnings. Our mission is to protect and enhance the company's earnings while also supporting our effort to becoming a global packaged meats company.

Best of luck to you in 2012!

Dhamu