Smithfield Foods Inc. cited falling demand for fresh pork Thursday as it announced plans to lay off about 570 workers and shut down hog slaughtering at its Smithfield South plant.
Smithfield, the world's largest pork processor, also reported that its profit fell 11 percent in its first fiscal quarter due to weakness in its overseas division as well as the declining domestic demand for pork.
Demand slowed as interest waned in the Atkins diet and other high-protein, low-carbohydrate regimens, and as consumers opted for cheaper, leaner meats such as chicken rather than bacon, said Dan Vaught, a livestock analyst with A.G. Edwards & Sons Inc. in St. Louis.
Chicken "is getting the cheapskate vote," he said.
Smithfield said in a statement that it hopes to rehire all 570 of the employees that are being let go during the next nine months either at the Smithfield South plant, which will continue to process pork products, or at one of its three other Virginia operations.
The company said it has about 4,000 employees in southeast Virginia.
The company's two remaining hog processing operations on the East Coast will have the capacity to slaughter about 11.1 million hogs a year, down 500,000 from current capacity, the company said.
Smithfield earned $49 million (44 cents a share) in the quarter ended July 31, down from a profit of $54.9 million (49 cents) in the year-earlier period.
Sales rose about 12 percent to $2.96 billion in the quarter from $2.65 billion a year earlier.
Joseph W. Luter III, Smithfield chief executive, said in a statement he was satisfied with the company's performance in the current quarter, "given several negative factors in the marketplace."
The company's profit met analyst expectations and sales exceeded expectations. Shares closed at $27.61, up 4.1 percent Thursday.