Premium Standard Farms
Encyclopedia
Premium Standard Farms, Inc (PSF), is a subsidiary of Smithfield Foods
. PSF was founded in 1988 with the aim of creating a standardized method to produce premium pork
. To accomplish this goal, the company decided to pursue full vertical integration
—a first for pork producers in the United States. Premium Standard Farms was the second largest pork producer and the sixth largest processor in the United States until acquired by Smithfield Foods in 2007.
The company is headquartered in Princeton, Missouri
, with a major office in Dalhart, Texas
.
production segment of Premium Standard Farms involves operations in Missouri
and Texas
, located on approximately 100000 acres (404.7 km²). Its herd
size of 221,000 sows
can produce about 4.5 million pigs per year; the second largest producer of porcine livestock in the United States
.
The North Carolina
farms were shifted from PSF to Murphy-Brown after the 2007 Smithfield acquisition.
, the Missouri
production operations employ about 1,250 people across northern Missouri. The company has 63 sow farms and nine grow/finish farms that span Mercer, Putnam, Sullivan
, Daviess and Gentry
counties. Additionally, local farmers operate finishing farms under contract
with PSF. The operations in Missouri account for the bulk of the company's herd with about 108,000 sows in production. PSF's farms in Missouri include the birthplace of Calamity Jane
northeast of Princeton.
On March 3, 2010, a Jackson County, Missouri
, jury awarded seven neighboring farmers $11 million in damages for odors emanating from a 4,300 acre 80 acres (323,748.8 m²) finishing hog farm
near Berlin in Gentry County, Missouri
, where an estimated 200,000 hogs were processed a year. In 2006, six plaintiffs were awarded $4.6 million. The settlement was the largest in a hog farm odor issue. It was filed in 1999.
Following the suit, Missouri-based Premium said it was reconsidering whether it would stay in the state.
, the Texas production operations employ about 300 people in the extreme northwest region of Texas
. A sow herd of about 33,000 are produced in Dallam and Hartley counties. Production takes place on a 40000 acres (161.9 km²) farm named High Plains Ranch. Additionally, the company purchased the 14500 acres (58.7 km²) Perico Farm from National Hog Farms in 1994.
, and the other in Clinton, North Carolina
. Both facilities use similar methodologies and process over 4.6 million hogs per year. Smithfield transferred both facilities to other subsidiaries after the acquisition.
The Missouri plant was built in September 1994 and was the first facility in the United States to use a CO2 anesthetizing system. More than 950 employees in this 300,000 square foot (28,000 m²) facility process over 7,000 pigs per day . The Milan plant produces fresh and frozen pork products for domestic retailers, further processors, food service providers and export
customers to more than 20 countries. After the Smithfield acquisition, the Missouri plant became a member of Farmland Foods.
The North Carolina
plant was purchased by PSF (and parent company Contigroup) from The Lundy Packing Group in August 2000. After re-tooling, the facility operates with approximately 1,200 people and processes over 9,000 pigs per day. This 800,000 square foot (74,000 m²) facility produces fresh and frozen pork products to domestic and export
customers. Additionally, the Clinton plant specializes in producing further processed pork and other ready-to-eat products such as ham
and bacon
products. After the Smithfield acquisition, the North Carolina plant became a member of Smithfield Packing.
, China
, Singapore
, Mexico
, Malaysia, the Philippines
and Taiwan
. Premium Standard Farms currently supports the Smithfield Foods brands.
announced that it would acquire Premium Standard Farms in a cash and stock deal that would total $810 million including the assumption of about $117 million in debt. The sale of PSF’s open stock still requires approval from the SEC
as well as shareholder approval. Smithfield hoped to close the deal by the end of the first quarter in calendar year 2007.
ContiGroup Companies Inc
supported the cash and stock buyout and voted its 38.8 percent stake in PSF in favor of the deal.
In May 2007, Smithfield completed the acquisition of Premium Standard Farms, converting shares into Smithfield stock at a rate of 0.678 Smithfield shares plus $1.25 in cash per PSF share.
Smithfield Foods
Smithfield Foods, Inc. is the world’s largest pork producer and processor. Headquartered in Smithfield, Virginia, it runs facilities in 26 U.S. states, including the world's largest meat-processing plant in Tar Heel, North Carolina, and has operations in Brazil, China, France, Mexico, Poland,...
. PSF was founded in 1988 with the aim of creating a standardized method to produce premium pork
Pork
Pork is the culinary name for meat from the domestic pig , which is eaten in many countries. It is one of the most commonly consumed meats worldwide, with evidence of pig husbandry dating back to 5000 BC....
. To accomplish this goal, the company decided to pursue full vertical integration
Vertical integration
In microeconomics and management, the term vertical integration describes a style of management control. Vertically integrated companies in a supply chain are united through a common owner. Usually each member of the supply chain produces a different product or service, and the products combine to...
—a first for pork producers in the United States. Premium Standard Farms was the second largest pork producer and the sixth largest processor in the United States until acquired by Smithfield Foods in 2007.
The company is headquartered in Princeton, Missouri
Princeton, Missouri
Princeton is a city in Mercer County, Missouri. The population was 1,166 at the 2010 census, an 11.4% increase in population from the 2000 census, which counted 1,047 people. It is the county seat of Mercer County.-Geography:...
, with a major office in Dalhart, Texas
Dalhart, Texas
Dalhart is a city in Dallam and Hartley counties in the U.S. state of Texas, and the county seat of Dallam County. The population was 7,237 at the 2000 census. Founded in 1901, Dalhart is named for its location on the border of Dallam and Hartley counties. Dalhart sits at the intersection of U.S....
.
Production
The livestockLivestock
Livestock refers to one or more domesticated animals raised in an agricultural setting to produce commodities such as food, fiber and labor. The term "livestock" as used in this article does not include poultry or farmed fish; however the inclusion of these, especially poultry, within the meaning...
production segment of Premium Standard Farms involves operations in Missouri
Missouri
Missouri is a US state located in the Midwestern United States, bordered by Iowa, Illinois, Kentucky, Tennessee, Arkansas, Oklahoma, Kansas and Nebraska. With a 2010 population of 5,988,927, Missouri is the 18th most populous state in the nation and the fifth most populous in the Midwest. It...
and Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
, located on approximately 100000 acres (404.7 km²). Its herd
Herd
Herd refers to a social grouping of certain animals of the same species, either wild or domestic, and also to the form of collective animal behavior associated with this or as a verb, to herd, to its control by another species such as humans or dogs.The term herd is generally applied to mammals,...
size of 221,000 sows
Domestic pig
The domestic pig is a domesticated animal that traces its ancestry to the wild boar, and is considered a subspecies of the wild boar or a distinct species in its own right. It is likely the wild boar was domesticated as early as 13,000 BC in the Tigris River basin...
can produce about 4.5 million pigs per year; the second largest producer of porcine livestock in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
.
The North Carolina
North Carolina
North Carolina is a state located in the southeastern United States. The state borders South Carolina and Georgia to the south, Tennessee to the west and Virginia to the north. North Carolina contains 100 counties. Its capital is Raleigh, and its largest city is Charlotte...
farms were shifted from PSF to Murphy-Brown after the 2007 Smithfield acquisition.
Missouri production operations
Based in PrincetonPrinceton, Missouri
Princeton is a city in Mercer County, Missouri. The population was 1,166 at the 2010 census, an 11.4% increase in population from the 2000 census, which counted 1,047 people. It is the county seat of Mercer County.-Geography:...
, the Missouri
Missouri
Missouri is a US state located in the Midwestern United States, bordered by Iowa, Illinois, Kentucky, Tennessee, Arkansas, Oklahoma, Kansas and Nebraska. With a 2010 population of 5,988,927, Missouri is the 18th most populous state in the nation and the fifth most populous in the Midwest. It...
production operations employ about 1,250 people across northern Missouri. The company has 63 sow farms and nine grow/finish farms that span Mercer, Putnam, Sullivan
Sullivan County, Missouri
Sullivan County is a county located in the U.S. state of Missouri. In 2010, the population was 6,714. Its county seat is Milan.-History:Sullivan County, Missouri encompasses of high glaciated prairie covered by steep rolling hills and numerous creeks and streams in north central Missouri...
, Daviess and Gentry
Gentry County, Missouri
As of the census of 2000, there were 6,861 people, 2,747 households, and 1,884 families residing in the county. The population density was 14 people per square mile . There were 3,214 housing units at an average density of 6 per square mile...
counties. Additionally, local farmers operate finishing farms under contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
with PSF. The operations in Missouri account for the bulk of the company's herd with about 108,000 sows in production. PSF's farms in Missouri include the birthplace of Calamity Jane
Calamity Jane
Martha Jane Cannary Burke , better known as Calamity Jane, was an American frontierswoman, and professional scout best known for her claim of being an acquaintance of Wild Bill Hickok, but also for having gained fame fighting Native Americans...
northeast of Princeton.
On March 3, 2010, a Jackson County, Missouri
Jackson County, Missouri
Jackson County is a county located in the U.S. state of Missouri. With a population of 674,158 in the 2010 census, Jackson County is the second most populous of Missouri's counties, after St. Louis County. Kansas City, the state's most populous city and focus city of the Kansas City Metropolitan...
, jury awarded seven neighboring farmers $11 million in damages for odors emanating from a 4,300 acre 80 acres (323,748.8 m²) finishing hog farm
Intensive pig farming
Intensive piggeries are a type of factory farm ' specialized in the raising of domestic pigs up to slaughter weight...
near Berlin in Gentry County, Missouri
Gentry County, Missouri
As of the census of 2000, there were 6,861 people, 2,747 households, and 1,884 families residing in the county. The population density was 14 people per square mile . There were 3,214 housing units at an average density of 6 per square mile...
, where an estimated 200,000 hogs were processed a year. In 2006, six plaintiffs were awarded $4.6 million. The settlement was the largest in a hog farm odor issue. It was filed in 1999.
Following the suit, Missouri-based Premium said it was reconsidering whether it would stay in the state.
Texas production operations
Based in DalhartDalhart, Texas
Dalhart is a city in Dallam and Hartley counties in the U.S. state of Texas, and the county seat of Dallam County. The population was 7,237 at the 2000 census. Founded in 1901, Dalhart is named for its location on the border of Dallam and Hartley counties. Dalhart sits at the intersection of U.S....
, the Texas production operations employ about 300 people in the extreme northwest region of Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
. A sow herd of about 33,000 are produced in Dallam and Hartley counties. Production takes place on a 40000 acres (161.9 km²) farm named High Plains Ranch. Additionally, the company purchased the 14500 acres (58.7 km²) Perico Farm from National Hog Farms in 1994.
Processing
Prior to May 2007, Premium Standard Farms consisted of two processing facilities - one in Milan, MissouriMilan, Missouri
Milan is a city in Sullivan County, Missouri, United States. The population was 1,960 at the 2010 census. It is the county seat of Sullivan County. It is prounouced MY-lun.-Geography:Milan is located at...
, and the other in Clinton, North Carolina
Clinton, North Carolina
Clinton is the county seat of Sampson County, North Carolina, United States. The population of Clinton is 8,639 according to the 2010 US Census. Clinton is named for American Revolution General Richard Clinton.-History:...
. Both facilities use similar methodologies and process over 4.6 million hogs per year. Smithfield transferred both facilities to other subsidiaries after the acquisition.
The Missouri plant was built in September 1994 and was the first facility in the United States to use a CO2 anesthetizing system. More than 950 employees in this 300,000 square foot (28,000 m²) facility process over 7,000 pigs per day . The Milan plant produces fresh and frozen pork products for domestic retailers, further processors, food service providers and export
Export
The term export is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export whereas the overseas based buyer is referred to as an "importer"...
customers to more than 20 countries. After the Smithfield acquisition, the Missouri plant became a member of Farmland Foods.
The North Carolina
North Carolina
North Carolina is a state located in the southeastern United States. The state borders South Carolina and Georgia to the south, Tennessee to the west and Virginia to the north. North Carolina contains 100 counties. Its capital is Raleigh, and its largest city is Charlotte...
plant was purchased by PSF (and parent company Contigroup) from The Lundy Packing Group in August 2000. After re-tooling, the facility operates with approximately 1,200 people and processes over 9,000 pigs per day. This 800,000 square foot (74,000 m²) facility produces fresh and frozen pork products to domestic and export
Export
The term export is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export whereas the overseas based buyer is referred to as an "importer"...
customers. Additionally, the Clinton plant specializes in producing further processed pork and other ready-to-eat products such as ham
Ham
Ham is a cut of meat from the thigh of the hind leg of certain animals, especiallypigs. Nearly all hams sold today are fully cooked or cured.-Etymology:...
and bacon
Bacon
Bacon is a cured meat prepared from a pig. It is first cured using large quantities of salt, either in a brine or in a dry packing; the result is fresh bacon . Fresh bacon may then be further dried for weeks or months in cold air, boiled, or smoked. Fresh and dried bacon must be cooked before eating...
products. After the Smithfield acquisition, the North Carolina plant became a member of Smithfield Packing.
Brands
Prior to 2007, brands included Premium Farms, Fresh & Tender, Fresh & Natural, and Premium 97 Heart Healthy. Between 5 and 10% of PSF’s pork product was exported to over 20 countries including JapanJapan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
, China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
, Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
, Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
, Malaysia, the Philippines
Philippines
The Philippines , officially known as the Republic of the Philippines , is a country in Southeast Asia in the western Pacific Ocean. To its north across the Luzon Strait lies Taiwan. West across the South China Sea sits Vietnam...
and Taiwan
Taiwan
Taiwan , also known, especially in the past, as Formosa , is the largest island of the same-named island group of East Asia in the western Pacific Ocean and located off the southeastern coast of mainland China. The island forms over 99% of the current territory of the Republic of China following...
. Premium Standard Farms currently supports the Smithfield Foods brands.
Smithfield Foods acquires Premium Standard Farms
On September 18, 2006, Smithfield FoodsSmithfield Foods
Smithfield Foods, Inc. is the world’s largest pork producer and processor. Headquartered in Smithfield, Virginia, it runs facilities in 26 U.S. states, including the world's largest meat-processing plant in Tar Heel, North Carolina, and has operations in Brazil, China, France, Mexico, Poland,...
announced that it would acquire Premium Standard Farms in a cash and stock deal that would total $810 million including the assumption of about $117 million in debt. The sale of PSF’s open stock still requires approval from the SEC
United States Securities and Exchange Commission
The U.S. Securities and Exchange Commission is a federal agency which holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation's stock and options exchanges, and other electronic securities markets in the United States...
as well as shareholder approval. Smithfield hoped to close the deal by the end of the first quarter in calendar year 2007.
ContiGroup Companies Inc
ContiGroup Companies
Formed in 1813, ContiGroup Companies, Inc was originally founded by Simon Fribourg in Arlon, Belgium, as a grain-trading firm. Formerly known as Continental Grain, ContiGroup has expanded into a multinational corporation with offices and facilities in 10 countries while employing more than 13,500...
supported the cash and stock buyout and voted its 38.8 percent stake in PSF in favor of the deal.
In May 2007, Smithfield completed the acquisition of Premium Standard Farms, converting shares into Smithfield stock at a rate of 0.678 Smithfield shares plus $1.25 in cash per PSF share.
History
- 1988 - Premium Standard Farms founded
- 1989 December - First litter of seven gilts and four barrows born on Wiles farm
- 1994 June - PSF acquired National Hog Farms of Texas
- 1994 September - Construction of first processing plant in Milan, Missouri, complete
- 1994 September - 80,000 sow units completed in Missouri
- 1996 - Company emerged from restructuringRestructuringRestructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs...
after market volatility - 1998 May - PSF merged with ContiGroup’s north Missouri swine operation which added 25,000 sows to the company’s herd.
- 1998 December - PSF is the first pork producer to earn Process Verified accreditation from the United States Department of AgricultureUnited States Department of AgricultureThe United States Department of Agriculture is the United States federal executive department responsible for developing and executing U.S. federal government policy on farming, agriculture, and food...
- 2000 August - PSF purchases the Lundy Packing Company and ContiGroup’s Carolina Farms
- 2003 April – PSF and Johnsonville SausageJohnsonville FoodsJohnsonville Sausage is a Wisconsin-based sausage producer, founded in 1945 by Ralph F. & Alice Stayer. Johnsonville Sausage produces various varieties of sausage including fresh bratwurst, Italian sausage, smoked-cooked links and fresh breakfast sausage links...
form Oldham LLC, a joint venture to produce sausage products - 2005 August - Initial public offering, NASDAQ: PORK
- 2007 May – Smithfield completes Premium Standard Farms acquisition
- 2010 March – Missouri jury awards neighbors for damages from the odor of the Gentry County farm—the largest such award in such cases. Premium says it will appeal. On March 3, 2010, a Jackson County, MissouriJackson County, MissouriJackson County is a county located in the U.S. state of Missouri. With a population of 674,158 in the 2010 census, Jackson County is the second most populous of Missouri's counties, after St. Louis County. Kansas City, the state's most populous city and focus city of the Kansas City Metropolitan...
, jury awarded seven neighboring farmers $11 million in damages for odors emanating from a 4,300 acre 80 acres (323,748.8 m²) finishing farm near Berlin in Gentry County, MissouriGentry County, MissouriAs of the census of 2000, there were 6,861 people, 2,747 households, and 1,884 families residing in the county. The population density was 14 people per square mile . There were 3,214 housing units at an average density of 6 per square mile...
where an estimated 200,000 hogs a year. In 2006, six plaintiffs were awarded $4.6 million. The settlement was the largest in a hog farm odor issue. It was filed in 1999.