Meat + Poultry - February 2006 - 32

Seaboard Foods uses partnerships,
acquisitions to keep its momentum

Integrating
E

xecutives at Seaboard Corp.,
Shawnee Mission, Kan., realize the profitability of the U.S.
pork market may not persist at recent
levels. The company's actions over the
past two years suggest an upbeat view
about long-term prospects for the pork
market and about ways Seaboard is
positioned to participate in that promising future.
Still, the company's profitability over
the past two years has been breathtaking. The share price was stuck in a
range around $200 per share between
2000 and 2003, before hog prices advanced dramatically. In the most recent
four quarters through the third quarter
of 2005, the company's earnings per
share totaled $194, and the share price
rocketed upward to $1,860 before settling to $1,450 in early February. As recently as 2002, the company's earnings
were only $9.38 per share.
Girded by its success, Seaboard
over the past two years took two major steps to expand its position in the
pork market. The first was a February

MEAT&POULTRY

February 2006

2004 agreement to market all the pork
products produced by Triumph Foods
L.L.C. at its new $150 million pork
processing facility in St. Joseph, Mo.
The plant began operations this past
month.
Last July, Seaboard acquired Daily's, a bacon processor with plants in
Missoula, Mont., and Salt Lake City.
Daily's was a closely held business
with a history dating back more than
a century.
The Triumph marketing agreement
and Daily's acquisition represent an
increased emphasis at Seaboard toward
value-added pork processing. Reflecting that change, the company in August 2005 renamed its pork segment
Seaboard Foods from Seaboard Farms.
The roots of Seaboard Corp. in the
food business date back to the 1920s,
with the purchase of a Kansas City
flour mill. Flour milling and grain trading were the company's principal businesses through most of the 20th century, though the company also became
involved in poultry processing and

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By L. Joshua Sosland
josh@sosland.com

aquaculture.
A few years after selling its domestic flour milling business to Cargill in
the early 1980s, Seaboard made its first
move into pork processing. In December 1990, Seaboard bought a plant in
Albert Lea, Minn., that had been shuttered by Wilson Foods.
"We figured out pretty quickly that
if you want to sell the right product
in the marketplace, you need the right
animals coming into the plant," says
Rod Brenneman, president and C.E.O.
of Seaboard Foods. "We were a vertically integrated poultry producer, and
we knew the pork processing business
could be handled better. At that time
vertical integration was nearly unknown in pork."
Concluding that a major investment
would be required to vertically integrate the Minnesota plant and obtaining
the requisite governmental permits for
both production facilities and a plant in

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Meat + Poultry - February 2006

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