Sow Stall Conversion Process Update - December 8th, 2011

I am very pleased to report that our livestock production subsidiary, Murphy-Brown, LLC, has made major progress toward the conversion from individual gestation stalls to group housing arrangements for pregnant sows on company farms.

While the conversion slowed during the recent recession due to significant operating losses, at our September 2010 shareholders meeting Smithfield announced that significant resources had again been committed to the conversion. We also resolved to announce our progress on a regular basis.

We are now confident that by December 31, 2011, we will have completed conversions for 30% of the sows on our farms, which was our target for this year.

Smithfield was the first major producer in our industry (which includes over 60,000 producers) to publicly commit to converting sow housing to group pens and remains the only large producer to do so. We will continue the conversion as planned with the goal of completing conversion for all sows on company farms by the end of 2017, and today we are on course to achieve that goal. While we initially had concerns during the recession about whether we could meet the 2017 goal, we are now back on track and, barring unforeseen circumstances beyond our control, we are confident that we will achieve our stated goal.

C. Larry Pope
President and Chief Executive Officer
Smithfield Foods, Inc.

Our Response to HSUS SEC Complaint - November 3, 2011

We want to address any concerns you may have regarding accusations from the animal rights group, Humane Society of the United States. We appreciate the opportunity to provide you with current facts so that you can make your own objective assessment of our efforts.

At the outset, I need to point out that HSUS’ accusations about our company not living up to its social responsibility commitments are misleading and baseless. Specifically, HSUS referred to our commitment to phase out gestation stalls, how we treat our animals and our new video series, “Taking the Mystery Out of Pork Production.” Allow me to address each of these issues.

First, HSUS suggests that Smithfield has backed away from our stated goal of phasing out gestation stalls in favor of group housing at our company-owned sow farms by 2017, but nothing could be further from the truth.

While the dramatic economic downturn of three years ago temporarily slowed our efforts in phasing out gestation stalls, we steadfastly stood by our commitment to ultimately achieve this goal. Our commitment has never wavered, as evidenced by our progress in converting 30 percent of our sows to group housing by the end of 2011, and our commitment to spend more than $300 million to achieve our stated goal. I invite you to read about our progress at www.smithfieldcommitments.com.

Second, the well-being of all our animals is one of our highest priorities, which is why we consistently seek input from our customers, consumers like yourself, experts in animal husbandry, veterinarians and animal behavior specialists.

We implement and monitor the practices at our farms through an industry-leading Animal Care Policy. This policy is more than just words—it articulates the principles and expectations to which we hold all employees accountable and guides the daily activities of all of our company-owned farms and those of our contract growers. In sum, we want our animals to be safe, comfortable, and healthy. Willful neglect or abuse of animals is not tolerated and will result in immediate termination. When mistakes are made or violations of our policies occur, we correct them.

Third, our website video series is not some slick production glossing over how pork is produced. The employees in the videos are real employees who were not scripted. They were told to express their own feelings about their jobs, and the work they do. And we could never have gotten renowned animal expert Dr. Temple Grandin to present the introduction to the videos if we had misrepresented the facts.

Beyond that, our concerted social responsibility efforts during the past decade have resulted in third-party recognition that we are very proud of. Most significantly, we were the first in our industry to achieve ISO 14001 environmental certification for all of our U.S. hog production and pork processing facilities. ISO 14001 is the international gold standard for environmental management. In addition, Smithfield Foods has been consistently named to FORTUNE magazine's prestigious annual list of America's Most Admired Companies. Companies are rated on eight criteria, from investment value to social responsibility.

At the same time, I need to underscore that we’re not saying that we’re perfect. We have made mistakes in the past, but we have learned from them and we have redoubled our efforts to behave in a socially responsible manner. This is a journey, but we believe we’re on the right track.

Because we are so passionate about doing the right thing, we welcome all who are interested in learning more about our company’s practices and commitments. We stand by the information we provide and our proven track record, which can all be found at www.smithfieldcommitments.com.

I hope this information addresses your concerns and reaffirms that we take your opinions very seriously. Thank you for your interest in Smithfield Foods.

Sincerely,

Dennis H. Treacy
Executive Vice President of Corporate Affairs
and Chief Sustainability Officer

Implementation Plan Update - May 25, 2011

The Murphy-Brown Animal Care Committee is charged with an ongoing mission to monitor animal care practices throughout the company. Following the recommendations included in the report of animal care experts, Temple Grandin and Jennifer Woods, the company is executing the implementation plan that was drafted in December. The Animal Care Committee will ensure that all of the response measures called for in the Grandin-Woods report are carried out. The chair of the Animal Care Committee will report directly to the President of Murphy-Brown, LLC. Below is a summary of the commitments the company has made as a result of the report's recommendations and how those commitments are being executed.

Gestation Stall Conversion Updates

The progress of our sow housing conversion continues. This chart shows the percentage of sows in group housing since 2006. As you can see, our projected increase in capital investments will allow nearly 30% of our sows to be in group housing by the end of this year.

Letter from Dennis H. Treacy, Senior Vice President Corporate Affairs and Chief Sustainability Officer

December 22, 2010

The report of findings by the independent investigation team and the Smithfield/Murphy-Brown internal investigation team into allegations of animal mishandling at the Waverly sow farms was completed today. The report also may be found by clicking on the link here, or in the column to the right.

The expert teams had six findings:

1. The video images of flipping a young pig, striking/poking a sow with a metal gate rod and improper euthanasia of an adult sow depict unacceptable behavior; each of these acts was contrary to our animal welfare policy and employee training.
2. We interviewed 177 employees at the farms and identified the three employees involved, and they were fired. This was appropriate and consistent with our zero tolerance policy.
3. The incidents noted in # 1 above were isolated occurrences, and the video does not show any other inappropriate actions or conditions.
4. All our farm employees, including the HSUS agent, received training in responsible animal handling and are expected to immediately report any suspected animal abuse.
5. The HSUS agent disregarded the welfare of animals in his care and violated Smithfield’s policies by (a) perpetuating abusive behavior by failing to immediately report it; (b) providing incomplete and vague information in his eventual hotline report, which obstructed the company’s ability to respond; and (c) participating in the ineffective attempt to euthanize a sow and allowing a live animal to be placed in a disposal box.
6. We at Smithfield employ a robust animal welfare system and we have zero tolerance for abuse.

The investigative teams also made five proactive recommendations. I have noted them below, and our plan of action follows in underlined italics. We will immediately address each recommendation and continue to report our progress on this website.

1. Review and update training programs and modes of delivery, including the addition of photographic charts for medical conditions. Murphy-Brown has already begun the updating process and the Animal Welfare Committee will be meeting in January to begin adding the photographic charts and other training materials.
2. Review and expand euthanasia procedures, handling tools, and health assessing by staff for training and policy. During their January meetings, Murphy-Brown’s Animal Welfare Committee will focus specific attention to this area and will utilize the best available experts in this field to make any needed changes to its training program.
3. Increase site visits by additional staff and corporate management. By the end of January, 2011, the Murphy-Brown production operations management team will develop the protocol for farm visits and initiate the process.
4. Develop and implement a program for unannounced animal welfare inspections/audits by third parties. As part of their January meetings, Murphy-Brown will begin the identification process and retain the services of a team of experts to conduct unannounced animal welfare assessments on company farms. This team will be directed to select farms at random for these inspections and will report its findings directly to the President of Murphy-Brown LLC.
5. Continue utilizing animal welfare committee meetings to review programs, policies, progression of conversions and assessments of all aspects of production. The Murphy-Brown Animal Welfare Committee will carefully review all the findings in this report and direct its full attention to assessing the adequacy and effectiveness of all the company’s animal welfare related policy, procedures, sow stall conversion process and all other aspects of live animal production.

Smithfield Foods is continuing its efforts to eliminate gestation stalls from our sow farms despite what HSUS may lead you to believe. We are maintaining our commitment, even through the recent recession, by continuing our engineering and planning processes. As noted in our shareholder's meeting on September 1, 2010, we have restarted the capital investment and are actively engaged in the process of converting a number of our company sow farms from individual gestation stalls to group housing arrangements for pregnant sows.

I was surprised to learn that HSUS’s operative actually worked on a conversion demolition crew at Waverly, witnessing firsthand exactly what the truth is: Our conversion to group housing IS moving forward. Smithfield was the first and only company that committed to moving all of our pregnant sow housing to group pens, and this demonstrates that we ARE doing it right now. Even though scientific studies by the Council for Agricultural Science and Technology: Scientific Assessment of the Welfare of Dry Sows Kept in Individual Accommodations show that gestation stalls work as well as group housing arrangements in providing sows with proper care during their pregnancies, our decision to switch to group housing demonstrates our responsiveness to our customers and other stakeholders, many of whom view group housing as the more animal-friendly solution.

As we pointed out when we made our announcement to switch to group housing, the conversion will take time, money, manpower and equipment, as well as additional training for our farm staff to understand and address the unique challenges that come with keeping sows in groups, but we are committed to making the conversion. That commitment has never wavered.

We at Smithfield Foods regret the recent incident and we abhor the actions of individuals who chose to ignore our policies. But I am pleased that this report demonstrates our transparency and commitment to animal welfare. That commitment is a journey of continuous and ongoing improvement.

Thank you for your continued interest and concern.

Sincerely,

Dennis H. Treacy,
Senior Vice President Corporate Affairs and Chief Sustainability Officer

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Previous Response to HSUS Undercover Video

At Smithfield Foods, chief among our priorities are food safety and the care and safety of our employees and animals. We have a long history of leading the industry with innovative programs to demonstrate that leadership.

Contrary to repeated statements from HSUS, Smithfield Foods is continuing its efforts to eliminate gestation stalls from our sow farms. We maintained that commitment, even through the recent recession, by continuing the engineering and planning processes. As noted in our shareholder's meeting on September 1, 2010, we have restarted the capital investment and are actively in the process of converting a number of our company sow farms from individual gestation stalls to group housing arrangements for pregnant sows.

On December 15th, the Humane Society of the United States (HSUS) released a hidden video that called into question the behavior of a few employees regarding their treatment of our animals at a Smithfield facility in Waverly, Virginia. Our company's well-defined animal welfare policy and procedures had already been in action for several days after we had heard of an incident through our Employee Hotline.

That policy requires that employees report abuse and those who are found to be in violation of our animal welfare standards will be subject to discipline up to and including termination. Smithfield Foods dismissed three employees last week–including a supervisor–for violating the animal welfare policy.

To date, HSUS has refused to provide our investigators with a full copy of the hidden video footage. Doing so would greatly help bring our investigation to a conclusion and help ensure that our animals are treated humanely.