Ractopamine ban aided Smithfield acquisition

Smithfield weaned the first of its pigs off the controversial feed additive ractopamine last year, and according to Tim Ramey, an analyst with DA Davidson & Co, this was “an enabling factor” for the takeover.

In March, China began requiring third-party verification that US pork products were ractopamine-free.

Ractopamine is a beta-agonist. Initially developed to treat asthma in humans, ractopamine was found to be extremely effective at changing the metabolism of an animal, so that the animal would quickly and cost-effectively add sought-after muscle. The FDA approved the use of beta-agonists in pigs in 1999, for cattle in 2003 and for turkeys in 2008.

The US$4.7 billion deal is the biggest Chinese takeover of a US firm