May 20, 2005

ContiGroup Companies, Inc. and Smithfield Foods, Inc. Announce Completion of Joint Venture

Boulder, CO (May 20, 2005) --- ContiGroup Companies, Inc. and Smithfield Foods, Inc. today announced the successful completion of an agreement to form a 50/50 joint venture between their respective cattle feeding businesses, ContiBeef LLC and MF Cattle Feeding, Inc.

Five Rivers Ranch Cattle Feeding LLC ("Five Rivers") is a stand-alone operating company, independent from both ContiGroup Companies and Smithfield Foods. Five Rivers is currently headquartered in Boulder, Colorado and has a combined total of 10 feedyards in Colorado, Idaho, Kansas, Oklahoma, and Texas with a one-time total feeding capacity of 811,000 head. Five Rivers expects to sell cattle to multiple U.S. beef packing firms throughout the U.S. using a variety of marketing methods that were already in place at ContiBeef.

Five Rivers includes the six feedyards originally owned by ContiBeef, formerly a subsidiary of ContiGroup Companies, and the four feedyards owned by Smithfield Beef Group, a subsidiary of Smithfield Foods, since October 2004. The decision to form the joint venture was a result of both companies' long-term commitment to the beef industry and desire to better service their customers, as well as their expertise in feeding cattle.

"We have a long history with the management team of Smithfield Foods, whom we hold in high esteem, and are delighted to be associated with them in building a premier cattle feeding company. It should be an exciting period for the entire beef industry," said Paul J. Fribourg, chairman and chief executive officer of ContiGroup Companies. "We will take our cattle feeding business to a new level by joining with ContiBeef, whom we believe are the best managers in the industry," said Joseph W. Luter, III, chairman and chief executive officer of Smithfield Foods. "I am confident that this combination will enhance the value of our original investment."

Mike Thoren, formerly President and Chief Executive Officer of ContiBeef, is President and Chief Executive Officer of Five Rivers. He has been involved in the cattle feeding business since 1991. Thoren and a core team from both ContiBeef and affiliates of Smithfield Foods will manage Five Rivers. "We believe that this partnership will be highly successful and rewarding for all parties in the future – the two businesses, our employees, consumers, and the cattle industry as a whole," Thoren said.

ContiBeef LLC, formerly a wholly-owned subsidiary of ContiGroup Companies, Inc., has been one of the largest cattle feeding operations in the world marketing over one million head of cattle annually, most of which were company owned, with six feedlots located in Colorado, Kansas, Oklahoma, and Texas providing a range of feeding and management services for outside customers. ContiGroup Companies, formerly Continental Grain Company, is a recognized leader in integrated poultry and pork production and cattle feeding, with nearly 200 years of experience in agribusiness and global trade based in New York.

The four cattle feedlots previously 100% owned by Smithfield Beef Group, a subsidiary of Smithfield Foods, have a one-time feeding capacity of 357,000 head and are located in Colorado and Idaho. Smithfield Foods, with annualized sales of $10 billion, is the leading processor and marketer of fresh pork and processed meats in the United States, as well as the largest producer of hogs. The Smithfield Beef Group is the fifth largest beef processor in the U.S.

This news release may contain "forward-looking" information within the meaning of the federal securities laws. The forward-looking information may include statements concerning the company's outlook for the future, as well as other statements of beliefs, future plans and strategies or anticipated events, and similar expressions concerning matters that are not historical facts. The forward-looking information and statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, the statements. These risks and uncertainties include availability and prices of livestock, raw materials and supplies, livestock costs, product pricing, the competitive environment and related market conditions, operating efficiencies, access to capital, the cost of compliance with environmental and health standards, adverse results from ongoing litigation and actions of domestic and foreign governments.

Contact: Robin M. Derin, (212) 207-5930
ContiGroup Companies, Inc.  

 


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