October, 2006- Butterball is one of the most recognizable consumer brand names in the country. ConAgra Foods announced earlier this year its intention to sell its refrigerated meats division, which includes the Butterball turkey operations. In late July, Smithfield Foods said that it had reached an agreement with ConAgra to purchase the refrigerated meats division. If the sale – scheduled to be finalized by this month – goes through, Carolina Turkeys will become the world’s largest turkey company, according to data gathered for the January 2006 WATT PoultryUSA Top Turkey Company Survey.

Smithfield is scheduled to pay ConAgra $475 million in cash and $100 million in Smithfield stock for ConAgra’s refrigerated meats division. Smithfield will then sell the Butterball turkey operation to Carolina Turkeys for $325 million. Carolina Turkeys is a joint venture which is 51 percent owned by Goldsboro Milling Co. and 49 percent owned by Smithfield Foods. Maxwell Farms, which is owned by the Maxwell family, is the parent company of Goldsboro Milling. Carroll’s Foods and Goldsboro Milling were the original partners in the Carolina Turkeys joint venture, but Smithfield purchased Carroll’s interest in the joint venture in 1999. Smithfield Foods and Goldsboro Milling will maintain the same ownership ratio of the Carolina Turkeys joint venture after the Butterball acquisition.

“This acquisition furthers our strategy of growing the packaged meats side of our business with higher-value, further-processed and pre-cooked products,” said C. Larry Pope, president and chief operating officer of Smithfield Foods. “The addition of Butterball is a big positive for Carolina Turkeys’ business. Butterball is well-recognized and highly-trusted with strong brand equity and national distribution,” said Mr. Pope.

Carolina Turkeys currently operates its flagship plant in Mount Olive, N.C., and a small cooked products plant in Kinston, N.C. The Mount Olive plant opened in 1986, and it processes more live pounds of turkeys – a projected 600 million pounds in 2006 – than any other plant in the world. A distribution center and 3-million-pound-per-week cooking operation are also operated at the Mount Olive plant site. Butterball operates five processing plants located in Jonesboro, Ark.; Huntsville, Ark.; Ozark, Ark.; Carthage, Mo.; and Longmont, Colo. The Ozark and Huntsville plants are primarily whole-bird plants. The Longmont plant slaughters, debones and cooks. The Carthage plant slaughters and debones to feed further processing facilities like the Jonesboro plant.


Carolina Turkeys and Butterball were projected to slaughter 600 million and 820 million live pounds in 2006, respectively (Table 1). Combined, the two operations would make the world’s largest turkey slaughter operation with over 1.4 billion live pounds processed this year, which is around 20 percent of the U.S. total. If the sale takes place, the top three turkey companies, Carolina, Jennie-O Turkey Store and Cargill, would process 52 percent of the projected 7 billion live pounds slaughtered in the USA in 2006. The industry’s top ten companies are expected to process three-quarters of the industry’s total volume in 2006.

There are not as many “mom and pop” turkey operations in the USA as there used to be. Eight of the top ten turkey companies in the USA are owned by companies that have either red meat or broiler operations. Smithfield Foods has sales of $11 billion and is a leading processor and marketer of fresh pork and processed meats in the USA, as well as the largest producer of hogs. Jennie-O Turkey Store is owned by Hormel Foods, a manufacturer and marketer of consumer-branded meats and food products with fiscal year 2005 sales of $5.4 billion. In addition to its North American turkey operations, Cargill, Inc., operates red meat slaughter and further processing facilities in the USA and has broiler operations on several other continents. Cargill’s total sales revenue in fiscal year 2006 was over $75 billion.

Bil Mar is owned by Sara Lee, Inc., a large consumer products and food company with sales of $19.25 billion in fiscal year 2005. House of Raeford, Perdue and Foster Farms each have large broiler operations in addition to their turkey businesses. Kraft Foods, Inc., owns the Louis Rich brand and is an international food company with fiscal year 2005 sales of $34.1 billion. Farbest Foods and the Virginia Poultry Growers Cooperative are the only two turkey companies in the top ten whose primary business is raising and processing turkeys.