President Donald Trump’s escalating trade war with China has made the country a nonviable export market for Smithfield Foods, CEO Shane Smith and other executives said during an April 29 conference call with shareholders to discuss the company’s first quarter financials.

It’s the company’s second quarterly release since its United States stock began trading on the Nasdaq Global Select Market, and the first glimpse into the company’s performance since Trump’s return to office and since Foods’ Jan. 28 initial public offering. Foods previously released its fourth quarter 2024 results on March 25.

China announced in April it would raise tariffs on U.S. goods from 85% to 125% in response to the Trump administration’s 145% tariff rate on Chinese imports, according to Associated Press reporting. Agricultural trade publications report China was imposing a 172% tariff specifically on U.S. pork products as of the end of April.

Smith said exports to China account for roughly 3% of Foods’ sales, which totaled $14.1 billion as of Dec. 29, 2024, according to the company’s Securities and Exchange Commission filings.

“With China no longer essentially being available we’ve really had to pivot our business,” Smith told shareholders.

China, which according to U.S. Department of Agriculture data spent $1.1 billion to import 467,228 metric tons of pork from the U.S. last year, in late April canceled roughly 12,000 metric tons of U.S. pork orders, according to multiple hog-farming trade publications. China is “not a viable sales market for us at the moment,” said Donovan Owens, president of Foods’ fresh pork segment.

Smith and Owens each downplayed the impact tariffs could have on Foods’ profit margin. USDA data shows China was the third-largest importer of pork products behind Mexico and Japan in 2024.

“We have a well-established international sales channel and we export to more than 30 countries around the globe. In 2024, Smithfield’s export sales accounted for 13% of total company sales, with the vast majority of that from our fresh pork segment,” Smith said. “… We continue to execute our next best sales strategy, evaluating our options and responses to the recent tariff actions. We believe our 2025 operation profit outlook range for fresh pork addresses tariff risk.”

“We believe we’re better positioned than others to navigate due to our team,” Owen said. “We’ve been through this before. It’s nothing new to us. We fully expected this tariff interruption as we came into 2025.”

Smith, in an earlier interview with the Times, said Foods sells offal, or edible organs, to China rather than what Americans typically think of as pork products.

“It’s the head and heart and ears and all the pieces and parts of the pig that we don’t eat here,” Smith told the Times. “China happens to be the best market for that in the world and that’s where our relationship with WH Group, I believe, gives us a competitive advantage as we compete against other U.S. producers trying to go to that market.”

Hong Kong-based WH Group purchased Foods for just under $5 billion in 2013 and retains a nearly 93% stake in the company, which remains headquartered in its namesake town. The remaining 7% of Foods’ stock shares have traded on Nasdaq over the past three months.

“On April 22 of this year we paid a quarterly dividend of 25 cents per share, reinforcing our commitment to returning value to shareholders, and we expect to pay $1 per share in annual dividends this year, subject to the board’s discretion,” Foods Chief Financial Officer Mark Hall told shareholders on the call.

Foods’ stock, which trades on Nasdaq under the ticker symbol “SFD,” saw a boost following the release of Foods’ first-quarter financials, rising from $19.44 per share the morning of April 29 to $22.98 by the 4 p.m. close of business on May 2, according to the Wall Street Journal. It debuted in January at $20 per share.

Foods reported just under $3.8 billion in consolidated first-quarter sales as of March 30 across its packaged meats, fresh pork and hog production segments, up 9.5% from $3.4 billion as of March 31, 2024. Smith told shareholders that the company saw a first-quarter adjusted operating profit of $326 million, or an 8.6% profit margin. It marks an 86% year over year increase from the $176 million profit and 5.1% margin Foods saw at the end of the first quarter in 2024, Smith told shareholders.

Its packaged meats segment saw a $266 million first-quarter profit, down 7% from $286 million the prior year, resulting in “an impressive adjusted operating profit margin of 13.1% even as we navigated higher raw materials input costs and a later Easter this year,” Smith said. “We continue to increase sales of higher-margin products such as packaged lunch meats and dry sausage.”

Foods’ fresh pork segment, which includes exports, Smith said, saw an $82 million first-quarter adjusted operating profit, or a 4% margin. That’s down 25.7% from the segment’s $110 million profit at the end of the first quarter in 2024.

Foods’ hog production segment, which includes farming operations, saw a $1 million adjusted operating profit, which “marks an outstanding turnaround from the loss of $174 million in the first quarter of 2024,” Smith said.

Smith said the turnaround was driven by “improved market conditions and a more efficient cost structure on our retained farms.”

Two hog-farming operations affiliated with Foods – VisionAg and Murphy Family Ventures – became independent entities last year and took ownership of a collective 178,000 sows formerly owned by Foods, which retains minority ownership in both companies. Murphy, according to news releases from last fall, now has the capacity to produce 3.2 million hogs annually for Foods’ fresh pork operations, while VisionAg has capacity to produce another 6000,000 per year.

Smith told shareholders to expect future reductions in Foods’ hog-farming footprint.

“We have reduced the number of company-owned hogs produced from a high point of 17.6 million in 2019 to … roughly 11.5 million in 2025,” Smith said. “Over the median term we plan to further reduce our internally produced hog volume to approximately 30% of the needs of our fresh pork segment. The recent transition of 3.8 million hogs to external producers is going very smoothly. These agreements assure a consistent supply of hogs from established farming operations with long-standing relationships with Smithfield and will reduce our exposure in the commodity markets as we reduce the number of hogs we directly own.”

Editor’s note: This story was updated at 5:18 p.m. on May 5 with the current 172% pork-specific tariff China is imposing on imported U.S. pork products.