A Demanding World--Fall/Winter 2010 Edition

It's no secret that our global population is on the rise. In fact, recent estimates indicate that the world population will reach over 9 billion by the year 2050. With increased incomes, improved medical technology, and greater food and medicine availability even in the developing world, the global middle class is projected to increase dramatically over the next few decades.

Of course, this is great news. Millions of people will rise out of poverty and see significant improvements in the quality of their lives. However, this rapid rise of so many brings with it new issues. When incomes rise, so do the demands for high-quality food products, including meats, fish, eggs, and dairy products. As a result, we can expect to see a large increase in global livestock production, which necessitates an increased production of feed crops such as corn, oats, and soybeans.

With more people to feed, and a higher demand for meat, fish, dairy, and egg products, food prices will increase dramatically, and with them, prices for feed crops. This can lead to situations like the summer of 2008, when much of the developing world could no longer afford their food, and starvation and riots ensued.

Efficient agriculture is going to be crucial to the provision of an affordable food supply in the coming decades. Farmland is scarce; if we don't want to convert all of the world's remaining land to farmland, we will have to discover ways to make more with less. Improvements such as decreased water usage, efficiency in feed production, improvements in the growth rates of animals, innovative animal housing solutions and processing plant efficiencies all have their place in ensuring food prices remain at an affordable level. Only by increasing our efficiency are we going to be able to meet the growing demand.

So, what does this have to do with us? How does a company like Smithfield fit into this global scene? It has to do with our business model. Because we produce food on a large scale, our business model is more efficient and cost-effective, allowing us to produce high quality and nutritious pork products while also keeping the cost as low as possible for our consumers.

At Smithfield and each of our subsidiary companies, we continually look for ways to make our farms, processing plants, and packaging facilities more efficient. We find ways to make more, using less. When these improvements are applied on a larger scale, they make an impact on our bottom line and our efficiency as a company. As a major player in the pork industry, we have a real impact on the global prices of these products.  As the decades unfold, our company will continue to play a key role in helping to feed an increasingly hungry world.