Smithfield Foods, the McDonald's McRib pork supplier that has come under fire from The Humane Society of the United States (HSUS), said Thursday its progress toward conversion from gestation crates for its pigs was on track to be completed by 2017.
Smithfield originally announced plans to phase out gestation crates in favor of group housing for pigs in 2007, but in 2009 backed away from that timeline because of the weak economy. Under more public pressure and after hearing concerns from customers and shareholders, the company decided to reaffirm its commitment to the conversion.
It isn't that we decided to take the step again or recommit, Smithfield spokeswoman Amy Richards said in a phone interview with the International Business Times Thursday. We've always been committed since 2007. When the economy tanked and all pork producers were facing economic difficulties, we had indicated we weren't sure if we were going to make that timeline. But we never stopped working toward the conversion.
HSUS, a shareholder in Smithfield, had publicly expressed its dissatisfaction with Smithfield's lack of progression. On Nov. 4, it filed a complaint with the SEC over a video series posted on Smithfield's website. Two weeks later, it filed a legal notice saying it intended to exercise its right as a shareholder to inspect company records and find out more specifics about Smithfield's conversion.
On Thursday, HSUS responded to Smithfield's announcement in a statement from president and CEO Wayne Pacelle, who said it was an important and welcome move. In a phone interview with IBTimes on Thursday, Paul Shapiro, senior director of farm animal protection for HSUS, echoed those sentiments.
Public attention is always a motivating factor for these types of decisions, Shapiro said. Look, the public recognizes gestation-crate confinement as very severe animal cruelty. The more the public learns about who is committing this type of cruelty, the more announcements of this type we'll see.
To that effect, Shapiro said HSUS would call on more pork suppliers to commit to phasing out gestation crates and following Smithfield's lead. Specifically, he mentioned Tyson, Hormel, Triumph, Prestage and Seaboard. Shapiro said HSUS is a shareholder in all of those companies.
When asked whether the society would ramp up similar campaigns and calls for conversion soon to the other companies, Shapiro said, Yes, that's a reasonable expectation.
Smithfield's announcement came on the same day that it reported its second-quarter earnings results for the fiscal year 2012.
Net income for the quarter was $120.7 million, down from $143.7 million in the second quarter of its fiscal year 2011. But sales spiked 10 percent to $3.3 billion.
Our business is thriving, and we are proud to deliver yet another quarter of quality and consistent earnings to our shareholders, led by strong results in our pork segment, C. Larry Pope, president and CEO of Smithfield, said in a statement.
That business also helped the company reaffirm its commitment. Based on its stronger economic position now than in 2009, the company believes it will be able to complete the transformation on time. Richards said that by the end of this year, Smithfield will have completed 30 percent of the conversion.
The conversion slowed because of operating losses, Richards said. The company is doing better now. We're able to move resources toward expenditures to conversion.
Shapiro of HSUS did say, however, that the group would remain in contact with Smithfield to monitor progress. The complaint is still ongoing, and he said HSUS would discuss inspecting Smithfield's records with the company.
The key sticking point that remains between the two is Smithfield's pledge to convert only company-owned farms. Smithfield is not requiring contract farms to also make the conversion. But Shapiro also said that with regards to the complaint, HSUS is urging Smithfield to modify videos the society claimed contained inaccuracies. He also said nothing has been resolved on whether HSUS would inspect Smithfield facilities.
When contacted for comment, a McDonald's spokeswoman referred to the company's official statement, from early November, regarding gestation stalls from Susan Forsell, McDonald's USA's vice president of quality systems.
McDonald's has been a long-time supporter of alternatives to gestation stalls, and we will continue to support the efforts of Smithfield Foods and all of our suppliers to phase them out, Forsell said in the statement.
Smithfield Foods was the first major pork producer that committed to phasing out gestation stalls, and we support the company's transparency and progress toward this goal.