Larry Pope, the CEO of Smithfield Foods (SFD), the country’s largest producer of
pork, recently griped that Walmart (WMT) is hampering his ability to produce
meat sustainably because of the retail giant’s relentless demand for rock bottom
prices. He’s got a point.
Walmart has been awarded lots of accolades for the authenticity of its
sustainability initiatives, but its religious adherence to lower than low prices
is its Achilles’ heel. While bargain basement prices are a fine thing,
especially with at least six million Americans out of work, increasing numbers
of consumers including more than few Walmart shoppers are concerned about
the way their meat is produced. They want hamburger and bacon that’s been raised
without antibiotics and on farms where animals aren’t living on top of each
other in their own excrement and where workers don’t hit cows over the head with
wrenches. But they can’t have it both ways.
That’s what Pope was getting at when he decided to take on the mighty bully
known as Walmart. As he explained to members of the National Meat Association,
the growing and raising of pigs, chicken and cattle these days ranges from
barely profitable to unprofitable, and that’s before you add in more humane
treatment and the additional roaming space that would make the routine
administration of antibiotics much less necessary. Having Walmart put a ban on
price increases from its meat suppliers doesn’t help.
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