Smithfield Foods Inc. says it now forecasts a $12 million to $13 million charge against fiscal second quarter 2008 earnings, double its earlier estimate, due to swine fever outbreaks at its Romanian hog operations. The earlier estimate was based on outbreaks at two Smithfield facilities. On August 23, the disease was discovered on a third farm.
"Given the third reported outbreak and escalating disposal costs, the write-down and disposal costs are expected to exceed the previously reported level," the company said in a filing with the Securities and Exchange Commission. Smithfield also said it might be eligible for government reimbursement for certain euthanasia and animal disposal costs, but would not receive those funds by the second quarter.
Smithfield has invested $1.1 billion in western Romania, where it is the largest pork producer.