FOR IMMEDIATE RELEASE
 
 Smithfield
Foods Reports Third Quarter Results
 
 SMITHFIELD,
Virginia (March 11, 2010)—Smithfield Foods, Inc. (NYSE: SFD) today reported
fiscal 2010 third quarter results.
 
 Highlights
 ·
              Net
      income was $37.3 million, or $.22 per diluted share; up $.96 per share
      from last year
 ·
              Income
      from continuing operations improved $145.4 million year over
      year
 ·
              Pork
      segment operating profits reflected continued strength in packaged meats
      margins and benefits of restructuring
activities
 ·
              Pork
      segment and packaged meats operating margins were 7.1% and 10.7%,
      respectively, excluding impairment and restructuring
    charges
 ·
              International
      segment operating profits increased $10.3 million, or 71%, excluding debt
      restructuring and discontinued operations
  charges
 ·
              Losses
      in live production subsided; Hog Production segment operating results
      improved $198.0 million
 ·
              Other
      segment operating results swung from a loss of $9.5 million to a profit of
      $6.6 million
 ·
              Pork
      segment restructuring activities are on track to achieve annual profit
      improvement of approximately $55 million in fiscal 2010 and $125 million
      by fiscal 2011
 ·
              Fiscal
      2009 contains an extra week compared to fiscal
  2010
 
 Following
are the company’s sales and operating profit (loss) by segment (in
millions):
 
 Three
      Months Ended
              
              
              Nine
      Months EndedJanuary
      31,
                2010
              
              
              February
      1, 2009
              
              
              January
      31,
                2010
              
              
              February
      1, 2009(unaudited)
              
              
              (unaudited)Sales:PorkFresh
      Pork
              
              $
              1,022.1
              
              
              $
              1,141.5
              
              
              $
              3,046.4
              
              
              $
              3,742.0Packaged
      Meats
              
              
              1,377.3
              
              
              
              1,685.1
              
              
              
              3,846.5
              
              
              
              4,253.9Total
      Pork
              
              
              2,399.4
              
              
              
              2,826.6
              
              
              
              6,892.9
              
              
              
              7,995.9International
              
              
              343.1
              
              
              
              333.2
              
              
              
              977.4
              
              
              
              1,141.0Hog
      Production
              
              
              691.8
              
              
              
              660.5
              
              
              
              1,798.9
              
              
              
              2,135.1Other
              
              
              27.3
              
              
              
              96.0
              
              
              
              125.2
              
              
              
              187.0Total
      segment sales
              
              
              3,461.6
              
              
              
              3,916.3
              
              
              
              9,794.4
              
              
              
              11,459.0Intersegment
              
              
              (576.9
              )
              
              
              (568.1
              )
              
              
              (1,502.0
              )
              
              
              (1,821.9
              )Consolidated
      sales
              
              $
              2,884.7
              
              
              $
              3,348.2
              
              
              $
              8,292.4
              
              
              $
              9,637.1Operating
      profit (loss):PorkFresh
      Pork
              
              $
              7.5
              
              
              $
              13.5
              
              
              $
              43.3
              
              
              $
              94.2Packaged
      Meats
              
              
              145.3
              
              
              
              115.9
              
              
              
              384.2
              
              
              
              190.3Total
      Pork
              
              
              152.8
              
              
              
              129.4
              
              
              
              427.5
              
              
              
              284.5International
              
              
              13.1
              
              
              
              14.5
              
              
              
              36.0
              
              
              
              31.4Hog
      Production
              
              
              (55.6
              )
              
              
              (253.6
              )
              
              
              (385.0
              )
              
              
              (350.4
              )Other
              
              
              6.6
              
              
              
              (9.5
              )
              
              
              1.2
              
              
              
              (28.3
              )Corporate
              
              
              (20.4
              )
              
              
              (16.3
              )
              
              
              (56.2
              )
              
              
              (69.2
              )Consolidated
      operating profit (loss)
              
              $
              96.5
              
              
              $
              (135.5
              )
              
              $
              23.5
              
              
              $
              (132.0
              )
  
 
 The
company reported income from continuing operations for the third quarter of
fiscal 2010 of $37.3 million, or $.22 per diluted share, versus a loss from
continuing operations last year of $108.1 million, or $(.75) per diluted share.
Sales were $2.9 billion versus $3.3 billion in the same period last year. The
third quarter of fiscal 2010 consisted of 13 weeks compared to 14 weeks in
fiscal 2009.
 
 The
current quarterly results include a number of significant items, including
pre-tax impairment and Pork segment restructuring charges totaling $16.9
million, Campofrío Food Group debt restructuring and discontinued operations
charges of $11.7 million, and the income tax impacts of certain discrete items.
The table below shows the impact of these items on fully diluted earnings per
share for the three months ended January 31, 2010.
 
 
 EPSImpactReported
      GAAP measure
              
              $
              .22Add
      back of significant items:Impairment
      charges
              
              
              .05Campofrío
      charges
              
              
              .07Pork
      Group restructuring charges
              
              
              .02Effective
      tax rate impact
              
              
              (.14
              )Adjusted
      Non-GAAP measure
              
              $
              .22
 
 
 Last
year’s results also included a number of significant items, including gains on
the sale of the company’s Groupe Smithfield investment and early extinguishment
of debt, Pork segment restructuring charges, cattle inventory write-downs, and a
mark-to-market adjustment for hog production hedges. Excluding these items, the
prior year loss from continuing operations would have been $24.0 million, or
$(.17) per diluted share.
 
 Commentary
 “The
third quarter demonstrated the ongoing strength of our packaged meats business,
which continues to deliver very strong margins. We are extremely focused on
this part of the business, it is paying dividends and the restructuring program
is beginning to have an impact,” said C. Larry Pope, president and chief
executive officer.
 
 “The
action items called for in the Pork Group restructuring plan are complete and
the benefits are meeting expectations. As of this month, we have closed all six
plants that were announced as part of the restructuring plan early last year. We
are on track to achieve the targeted $55 million of profit improvement this
year, after applicable restructuring expenses, and $125 million of annual
benefits beginning in fiscal 2011,” he continued.
 
 “Much
of the success of the Pork Group restructuring plan is attributable to the
benefits received from shuttering underutilized plants. These plant closures,
combined with the rationalization of unprofitable business, have allowed this
organization to realize strong bottom line growth. While the plan has
intentionally caused a loss of volume in the Pork segment, it has resulted in a
more competitive and efficient cost base and improved product mix to begin to
focus on profitable top line growth,” Mr. Pope remarked.
 
 Pork
 Fresh
Pork
 Fresh
pork operating margins, adjusted for charges in both years, were lower compared
to the same quarter last year, as a reduction in hog slaughter levels negatively
impacted results. This year, fresh pork operating profit includes $14.7 million
of pre-tax charges related to the announced closure of the Sioux City, Iowa
plant and Pork segment restructuring. Prior year fresh pork restructuring
charges were $21.2 million. Fresh pork volumes in the third quarter, excluding
the impact of the extra week, were 7% below volumes in the prior
year.
  2
 
 Export
volume in the third quarter was flat compared to the same period last year,
despite closed export markets in China and Russia, both of which are important
markets for U.S. pork. On a historical basis, exports continued to be very
strong.
 
 Packaged
Meats
 Packaged
meats operating profits declined modestly from the prior year after adjusting
for restructuring charges in both years. The comparative decline reflects
planned volume decreases. In spite of sharply higher raw material costs,
packaged meats operating margins remained robust and were in line with the prior
year on an adjusted basis.
 
 Volumes
were 7% lower than the prior year, excluding the extra week. In large measure,
volume decreases were planned and resulted from plant closures contemplated in
the Pork Group restructuring plan. Results continued to benefit from pricing
discipline, rationalization of unprofitable business, lower overhead and other
benefits of the restructuring plan.
 
 International
 The
company’s operations in Poland delivered strong results and brand growth as
sales volumes increased 24% and operating profits improved by $6.9 million.
Campofrío also reported stronger year over year operating results; however,
refinancing and restructuring charges swung the company’s share of their results
to a loss for the quarter.
 
 International
segment results are reported on a 13 week basis and are therefore not affected
by the extra week in fiscal 2009.
 
 Hog
Production
 Hog
production losses moderated significantly in the third quarter, reflecting a 12%
improvement in live hog market prices in the U.S. and a 16% reduction in
domestic raising costs. Live hog market prices in the U.S. increased to an
average of $44 per hundredweight compared to $40 per hundredweight in the same
quarter last year. Domestic raising costs decreased to $51 per hundredweight
from $61 per hundredweight in the prior year.
 
 The
company’s international hog production operations in Poland, Romania and Mexico
continued to show strong performance. Operating results in those operations
improved by more than $41 million compared to last year. Shrinking supplies,
lower feed costs, positive currency fluctuations and an increase in the number
of head marketed all contributed to the improved results.
 
 Other
 Results
from the company’s investment in Butterball increased $4.0 million as
improvements in live turkey pricing benefited the business.
 
 The
sharp decrease in Other segment sales is attributable to last year’s sell-off of
the remnants of the company’s live cattle operations which have since been sold.
Losses from live cattle operations were $14.4 million last year.
 
 Outlook
 “Our
biggest obstacle for the past two years has been the lack of profitability in
our hog production segment. As of the third quarter, those losses have
substantially diminished and the futures markets are trending favorably for us,”
said Mr. Pope.
 
 “We
anticipate that fresh pork margins will improve as hog slaughter levels continue
to decline and the Sioux City plant is closed in April. In addition, we expect
that fiscal 2010 should be the second best year ever for Smithfield fresh pork
exports. Our trade representatives are actively working to fully reopen the
Chinese and Russian markets and secure the approval of our plants for shipping.
I fully expect these markets to be reopened by the end of this fiscal year,” he
continued.
  3
 
 “This
organization continues to focus on driving profitable growth through our
consumer packaged meats business. Consequently, we are very pleased with the
ongoing performance of our packaged meats business over the last two years. It
is this focus that will continue to propel the company forward,” Mr. Pope
remarked.
 
 “Looking
forward to fiscal 2011, hog production should be dramatically improved year over
year and pork results should be very solid, owing to the restructuring plan that
will be complete. If the current trends continue and the export markets reopen,
I believe we could have a very good year in fiscal 2011,” he
concluded.
 
 Conference
Call
 The
company will host a conference call at 9:00 a.m. Eastern Standard Time on
Thursday, March 11, 2010. To listen via telephone, call (800) 230-1766. The call
can be accessed live on the Internet at http://investors.smithfieldfoods.com/events.cfm.
It also will be archived online at this location. A telephone replay will be
available at (800) 475-6701 from March 11 at 11:00 a.m. until March 25 at 11:59
p.m. The replay access code is 147889.
 
 About
Smithfield Foods
 With
sales of $12 billion, Smithfield Foods is the leading processor and marketer of
fresh pork and packaged meats in the United States, as well as the largest
producer of hogs. For more information, visit www.smithfieldfoods.com.
 
 Regulation
G Disclosures available at www.smithfieldfoods.com.
 
 This
news release contains "forward-looking" statements within the meaning of the
federal securities laws. The forward-looking statements includes statements
concerning the Company's outlook for the future, as well as other statements of
beliefs, future plans and strategies or anticipated events, and similar
expressions concerning matters that are not historical facts. The Company's
forward-looking information and statements are subject to risks and
uncertainties that could cause actual results to differ materially from those
expressed in, or implied by, the statements. These risks and uncertainties
include the availability and prices of live hogs, raw materials, fuel and
supplies, food safety, livestock disease, live hog production costs, product
pricing, the competitive environment and related market conditions, hedging
risk, operating efficiencies, changes in interest rate and foreign currency
exchange rates, changes in our credit ratings, access to capital, the investment
performance of the Company's pension plan assets and the availability of
legislative funding relief, the cost of compliance with environmental and health
standards, adverse results from on-going litigation, actions of domestic and
foreign governments, labor relations issues, credit exposure to large customers,
the ability to make effective acquisitions and successfully integrate newly
acquired businesses into existing operations, the Company’s ability to
effectively restructure portions of its operations and achieve cost savings from
such restructurings and other risks and uncertainties described in the Company's
Annual Report on Form 10-K for the fiscal year ended May 3, 2009. Readers are
cautioned not to place undue reliance on forward-looking statements because
actual results may differ materially from those expressed in, or implied by, the
statements. Any forward-looking statement that the Company makes speaks only as
of the date of such statement, and the Company undertakes no obligation to
update any forward-looking statements, whether as a result of new information,
future events or otherwise. Comparisons of results for current and any prior
periods are not intended to express any future trends or indications of future
performance, unless expressed as such, and should only be viewed as historical
data.
 
 ###
 
 (Tables
follow)






4


SMITHFIELD
      FOODS, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF INCOME(In
      millions, except per share data)Three
      Months Ended
              
              
              Nine
      Months EndedJanuary
      31,
                2010
              
              
              February
      1, 2009
              
              
              January
      31,
                2010
              
              
              February
      1, 2009(unaudited)
              
              
              (unaudited)Sales
              
              $
              2,884.7
              
              
              $
              3,348.2
              
              
              $
              8,292.4
              
              
              $
              9,637.1Cost
      of sales
              
              
              2,600.5
              
              
              
              3,263.9
              
              
              
              7,741.2
              
              
              
              9,125.0Gross
      profit
              
              
              284.2
              
              
              
              84.3
              
              
              
              551.2
              
              
              
              512.1Selling,
      general and administrative expenses
              
              
              194.5
              
              
              
              202.2
              
              
              
              558.3
              
              
              
              602.5Equity
      in (income) loss of affiliates
              
              
              (6.8
              )
              
              
              17.6
              
              
              
              (30.6
              )
              
              
              41.6Operating
      profit (loss)
              
              
              96.5
              
              
              
              (135.5
              )
              
              
              23.5
              
              
              
              (132.0
              )Interest
      expense
              
              
              67.2
              
              
              
              62.2
              
              
              
              198.9
              
              
              
              163.7Other
      loss (income)
              
              
              -
              
              
              
              (63.5
              )
              
              
              11.0
              
              
              
              (63.5
              )Income
      (loss) from continuing operations before income taxes
              
              
              29.3
              
              
              
              (134.2
              )
              
              
              (186.4
              )
              
              
              (232.2
              )Income
      tax benefit
              
              
              (8.0
              )
              
              
              (26.1
              )
              
              
              (89.6
              )
              
              
              (62.5
              )Income
      (loss) from continuing operations
              
              
              37.3
              
              
              
              (108.1
              )
              
              
              (96.8
              )
              
              
              (169.7
              )Income
      from discontinued operations
              
              
              -
              
              
              
              2.4
              
              
              
              -
              
              
              
              52.5Net
      income (loss)
              
              $
              37.3
              
              
              $
              (105.7
              )
              
              $
              (96.8
              )
              
              $
              (117.2
              )Income
      (loss) per basic and diluted share:Continuing
      operations
              
              $
              .22
              
              
              $
              (.75
              )
              
              $
              (.63
              )
              
              $
              (1.21
              )Discontinued
      operations
              
              
              -
              
              
              
              .01
              
              
              
              -
              
              
              
              .37Net
      income (loss)
              
              $
              .22
              
              
              $
              (.74
              )
              
              $
              (.63
              )
              
              $
              (.84
              )Weighted
      average shares:Weighted
      average basic shares
              
              
              165.8
              
              
              
              143.6
              
              
              
              154.2
              
              
              
              140.3Effect
      of dilutive stock options
              
              
              0.2
              
              
              
              -
              
              
              
              -
              
              
              
              -Weighted
      average diluted shares
              
              
              166.0
              
              
              
              143.6
              
              
              
              154.2
              
              
              
              140.3
 
 5
   SMITHFIELD
      FOODS, INC. AND SUBSIDIARIESSCHEDULE
      OF EQUITY IN (INCOME) / LOSS OF AFFILIATES(In
      millions)Three
      Months Ended
                  
                  
                  Nine
      Months EndedEquity
      Investment
                  
                  January
      31,
                    2010
                  
                  
                  February
      1, 2009
                  
                  
                  January
      31,
                    2010
                  
                  
                  February
      1, 2009Butterball
                  
                  $
                  (7.9
                  )
                  
                  $
                  (3.9
                  )
                  
                  $
                  (15.3
                  )
                  
                  $
                  16.6Campofrío
      Food Group (1)
                  
                  
                  5.3
                  
                  
                  
                  0.6
                  
                  
                  
                  (2.5
                  )
                  
                  
                  4.2Mexican
      joint ventures
                  
                  
                  (4.4
                  )
                  
                  
                  9.1
                  
                  
                  
                  (11.3
                  )
                  
                  
                  10.3All
      other equity method investments
                  
                  
                  0.2
                  
                  
                  
                  11.8
                  
                  
                  
                  (1.5
                  )
                  
                  
                  10.5Equity
      in (income) loss of affiliates
                  
                  $
                  (6.8
                  )
                  
                  $
                  17.6
                  
                  
                  $
                  (30.6
                  )
                  
                  $
                  41.6
  (1)
                Prior to the 3rdquarter of
      fiscal 2009, we owned 50% of Groupe Smithfield and 24% of
      Campofrío.  Those entities merged in the third quarter of fiscal
      2009 to form Campofrío Food Group (CFG), of which we own 37%. Prior year
      amounts represent the combined results of Groupe Smithfield and
      Campofrio.
   CFG
prepares its financial statements in accordance with International Financial
Reporting Standards. Our share of CFG's results reflects US GAAP adjustments and
thus, there may be differences between the amounts we report for CFG and the
amounts reported
 Contact:
 Keira
Ullrich
 Smithfield
Foods, Inc.
 (212)
758-2100
 keiraullrich@smithfieldfoods.com