Filed by Smithfield Foods, Inc.

                          Pursuant to Rule 425 under the Securities Act of 1933
                                       and deemed filed pursuant to Rule 14a-12
                                      under the Securities Exchange Act of 1934

                                                     Subject Company: IBP, Inc.
                                                     Commission File No. 1-6085

                                                              November 28, 2000





                                SMITHFIELD FOODS

                         TRANSCRIPT OF NOVEMBER 28, 2000
                      INVESTMENT COMMUNITY CONFERENCE CALL

                           MODERATOR: JERRY HOSTETTER
                                NOVEMBER 28, 2000
                                  4:30 P.M. CT


THESE REMARKS MAY CONTAIN "FORWARD-LOOKING" INFORMATION WITHIN THE MEANING OF
THE FEDERAL SECURITIES LAWS. THE FORWARD-LOOKING INFORMATION MAY INCLUDE
STATEMENTS CONCERNING SMITHFIELD'S OR IBP'S OUTLOOK FOR THE FUTURE, THE ABILITY
TO REALIZE ESTIMATED SYNERGIES, AS WELL AS OTHER STATEMENTS OF BELIEFS, FUTURE
PLANS AND STRATEGIES OR ANTICIPATED EVENTS, AND SIMILAR EXPRESSIONS CONCERNING
MATTERS THAT ARE NOT HISTORICAL FACTS. FORWARD-LOOKING STATEMENTS ARE SUBJECT TO
RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THOSE EXPRESSED IN, OR IMPLIED BY, THE STATEMENTS. THE FOLLOWING FACTORS,
AMONG OTHERS, COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
EXPRESSED IN, OR IMPLIED BY, THE STATEMENTS: THE RISKS THAT SMITHFIELD'S AND
IBP'S BUSINESSES WILL NOT BE INTEGRATED SUCCESSFULLY, THE RISK THAT SMITHFIELD
AND IBP WILL NOT REALIZE ESTIMATED SYNERGIES, COSTS RELATING TO THE PROPOSED
TRANSACTION, THE AVAILABILITY AND PRICES OF LIVE HOGS, LIVE CATTLE, RAW
MATERIALS AND SUPPLIES, PRODUCT PRICING, THE COMPETITIVE ENVIRONMENT AND RELATED
MARKET CONDITIONS, OPERATING EFFICIENCIES, ACCESS TO CAPITAL, ACTIONS OF
DOMESTIC AND FOREIGN GOVERNMENTS AND OTHER FACTORS DISCUSSED IN SMITHFIELD'S AND
IBP'S RESPECTIVE FILINGS WITH THE SEC.

More detailed information pertaining to Smithfield's proposal will be set forth
in appropriate filings to be made with the SEC. We urge stockholders to read any
relevant documents that may be filed with the SEC because they will contain
important information. Stockholders will be able to obtain a free copy of any
filings containing information about Smithfield and IBP, without charge, at the
SEC's Internet site (HTTP://WWW.SEC.GOV). Copies of any filings containing
information about Smithfield can also be obtained, without charge, by directing
a request to Smithfield Foods, Inc., 200 Commerce Street, Smithfield, Virginia
23430, Attention: Office of the Corporate Secretary (757-365-3000).

This communication shall not constitute an offer to sell or the solicitation of
an offer to buy securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.



Smithfield and certain other persons named below may be deemed to be
participants in the solicitation of proxies. The participants in this
solicitation may include the directors and executive officers of Smithfield. A
detailed list of the names of Smithfield's directors and officers is contained
in Smithfield's proxy statement for its 2000 annual meeting, which may be
obtained without charge at the SEC's Internet site (HTTP://WWW.SEC.GOV).

As of the date of this communication, none of the foregoing participants, other
than Smithfield (which beneficially owns approximately 6.6% of IBP's common
stock), individually beneficially owns in excess of 5% of IBP's common stock.
Except as disclosed above and in Smithfield's proxy statement for its 2000
annual meeting and other documents filed with the SEC including Smithfield's
Schedule 13D relating to the IBP common stock, to the knowledge of Smithfield,
none of the directors or executive officers of Smithfield has any material
interest, direct or indirect, by security holdings or otherwise, in Smithfield
or IBP.



Operator: Good afternoon, and welcome to Smithfield Foods second quarter 2001
         conference call. Today's conference is being recorded.

         We refer you to the forward-looking statements and other information,
         which can be found at the end of Smithfield Foods press release, issued
         today and will be included in the replay of this call. Statements today
         may contain forward-looking information within the meaning of the
         Federal Securities laws. For more detailed information related to the
         matters which are discussed today, we urge you to read the statements
         contained in the press release and Smithfield's filings with the SEC.

         Now, I'd like to turn the call over to Jerry Hostetter, Vice President
         of Investor Relations and Corporate Communications. Please go ahead,
         sir.

Jerry Hostetter: Good afternoon, everyone, and welcome to this Smithfield
         Foods conference call to discuss our fiscal second quarter earnings.

         Before we begin, I would like to direct you to the paragraph in our
         press release of today. Quoting Joseph W. Luter III, Chairman,
         President and Chief Executive Officer on the status of our offer to
         acquire IBP. He says, "We are pleased with the prompt and encouraging
         response we've received from the special committee of IBP's board and
         are now moving forward with the process. We have signed a
         confidentiality agreement. We have begun conducting our due diligence
         review and we have had preliminary discussions with various regulatory
         bodies and other public officials. We remain hopeful that we will be
         able to complete a definitive merger agreement promptly with IBP and we
         remain enthusiastic about the benefits of such a combination could
         provide for our respective shareholders, customers, employees and the
         farming communities we serve."

         This literally is an update of the status of offer as of today and we
         will take no questions today on our offer to acquire IBP or on the IBP
         proxy statement filed today, which is being reviewed by our advisors.



         Now, to discuss our second quarter earnings, I would like to introduce
         Larry Pope, Vice President and Chief Financial Officer, who will be
         followed by Joe Luter - Larry.

C. Larry Pope: Hello, gentlemen and ladies. I did want to take you
         through, see if you've got our 4:00 release indicating a doubling of
         this year's earnings compared with the prior year. On behalf of
         Smithfield's management, we are extremely pleased with these results.
         These six months results, which represent earnings now equal to and
         surpass the fiscal year 2000 numbers, so we are very, very pleased that
         the first half of this year has already surpassed the entire results of
         the prior year.

         The results this year include the impact of 19 percent additional
         shares that were issued in connection with the Murphy acquisition and,
         for the first - pardon me, for the quarter ended October 29, the
         quarter represents $44 million versus $22 million, or 81 cents versus
         48 cents. For the six-month period, the earnings are $89.1 million
         versus $29.1 million, or $1.61 per share versus 62 cents per share in
         the prior year. The sales for the current year are up 16 percent at
         $1.4 billion versus $1.2 billion in the prior year. They reflect the
         impact of increasing hog prices and the impact of Murphy's sales to
         outsiders.

         For the six-month period, our sales are $2.9 billion versus $2.4
         billion, and that represents as well the impact of the increase in hog
         prices on our ultimate sales prices driving that as well as the impact
         of the Murphy farm sales for the full six-month period. Most of our
         earnings, as released is very clear, came from our hog production group
         where we are extremely pleased that earnings more than nearly five
         times what they were in the prior year from an operating standpoint.
         The profitability at the meat processing group, in contrary to that,
         were not where they were and in fact were down 27 percent at an
         operating profit level. This is the impact of higher hog prices, which
         had the impact of lowering our fresh meat margins, as you would - as we
         would expect to happen.

         And so, the fact that we had twice as many hogs or twice as many sows
         in production, combined with an increased efficiencies that are already
         existing operations prior to Murphy and the additional production
         associated with our Utah operation, ended up with the total sales of
         live hogs being about 120 percent of last year. So, it's a more than
         doubling of the animals we actually raised and sold either to ourselves
         or to outsiders. The increase in the live hog prices obviously brought
         tremendous profitability to that segment of the business. Conversely,
         the profitability associated with the fresh meat side of the business
         was off for the quarter relatively sizable amounts. We did have some
         strong profitability in our processed meats end of the business, which
         offset some of our fresh meat adverse results and tempered the downward
         results in the meat processing group.



         So, we are extremely pleased. It appeared that our timing of the Murphy
         transaction last January was quite appropriate and was right as we
         expected with a turn in hog prices, which has occurred. It has helped
         to change our first quarter, which is traditionally a bad quarter. Now,
         our second quarter, which is an improving quarter, both of those have
         far surpassed the prior years and we are extremely pleased with our
         first six months.

         At this point, I would like to turn this to Mr. Luter for some comments
         and then we will open it up to questions from you.

Joseph Luter III: Thank you, Larry. I think Larry has pretty well covered -
         has covered our quarterly results. I won't repeat anything that Larry
         has said, but I will say this, that this - the results for this quarter
         and for the first quarter of this year it, I think, reconfirms a very,
         very forceful way this strategy of vertical integration. You've heard
         me say many times the two businesses are counter cyclical and that is
         certainly the case right now.

         And we're just more convinced than ever that our decision many years
         ago to become a vertically integrated pork packer was the right to see
         and there was a lot of growing pains, but we've gotten there. And I
         think from here going forward, we're going to begin to realize the
         profitability potential that - from the seeds that we put in place in
         the last decade. And I'm very, very optimistic going forward.

         In regard to the third quarter and those of you who know me and have
         talked to me over the years know I am very, very reluctant to get into
         the position of predicting quarterly results and I don't want to start
         today. This is a business that we do have unforeseen circumstances that
         do come up from time to time. We like to not focus in on those so much
         on quarterly results, but long term trends and long term trends, we
         believe, at Smithfield Foods are extremely positive and, in my opinion,
         have never been better than they are right now. There's no question
         that the third quarter's results should be substantially ahead.

         The meat processing group is doing very well in the third quarter,
         although fresh meat is also not as good as what they historically are
         for the month of November. But the processed meat business is pretty
         good and, quite frankly, the hog prices are holding up a little bit
         better than we expected for this time of year. They're right in towards
         the end of what is traditionally the fall hog run where we get the
         cheapest prices. But for the most prices, their prices have stayed high
         enough to where the hog production group is profitable now where we
         would expect it normally to be unprofitable at during this point in
         time of the year.

         So, at this time, I'd rather let's just start our Q&A and I'll try and
         answer any questions that I can answer from you. Questions, please.

Operator: If you'd like to ask a question today, please signal us using your
         telephone. Press the star key followed by the digit one and your
         questions will be addressed




         in the order that you've signaled. Again, that's star one. And we'll
         pause for just a moment.

         First up is David Nelson at Credit Suisse First Boston.

David Nelson:  Good afternoon.

Joseph Luter III:  Hi, David.

David Nelson: What is your hedge position as you look into the third and
         fourth quarters, please, both on feed and on hogs?

Joseph Luter III:  I have that here, David.  Give me one second.

C. Larry Pope: I know the answer. I'll tell you the answer, David. I'll
         get - I know we're at 85 percent on the feed ingredients for the hog
         raising operations.

David Nelson:  That's for third quarter or the full six months?

C. Larry Pope:  No, that's actually through next - that's through next June.

Joseph Luter III:  That's correct.

David Nelson:  And when did you place that?  Because costs have been going up.

Joseph Luter III: Well, we started placing that months and months and months
         ago, David. And we had a fairly large loss in the feed and profits on
         the hogs. But in the recent few weeks, our losses have gone down on the
         grain side, but then some of our profitability has evaporated on the
         hog production side. But right now, we - on the accumulate - I don't
         want to get into exact details.

         But the bottom line is we're showing a - we're showing right now the
         realized profits to date and the unrealized losses to date, based oh
         the close of markets of November 21st, we still have about an $8
         million profit between the two, (Jeff). We don't have a lot of hogs
         sold forward. We have - we just - we do not believe that the hog
         numbers go - be as great as what a lot of people think. And the prices
         are pretty depressed going forward on hogs. We don't see the increases
         that some people think that are out there and particularly when you got
         a big producer such as National Farms out in Colorado is actually
         depopulating that entire herd, (Jeff). I don't know if you've heard
         that or not.

David Nelson:  Right.

Joseph Luter III: And so, we've really - we are not too bearish on these
         prices and we just do not want to sell hogs going forward at the
         current levels.



David Nelson: Understood. Pardon me, on the hog farming profitability, $72
         million, to convert that to per head, would I divide that by $3
         million, getting about $24 per head?

C. Larry Pope: (Jeff), let me give you that. You're close. For the quarter
         it's $3.2 million.

David Nelson: Three point two? OK. And then on packing margins for the
         quarter, was that about $5?

C. Larry Pope:  You're doing the whole meat processing group?

David Nelson:  No, just on the packing, not the further processing.

C. Larry Pope: I don't know if I've got that number laying. I'm trying to
         think if I've got that number laying right here. (Jeff) ...

David Nelson:  I can follow up on that.

C. Larry Pope: I'll have to come back to you on that one. I'm trying to
         remember if I've got that. I think I've got that laying here, but I
         don't know where it is at this instant.

Joseph Luter III: I will say, (Jeff), that the fresh meat results for the ball
         of this year have been very disappointing if you compare it against
         what we historically have experienced for this time of year.

C. Larry Pope:  Yeah.  For the quarter, they're off $5 ...

Joseph Luter III: You've got an awful lot of packers out there that - they're
         killing on Saturdays when the margins are really not that great. Why
         they're doing it? I think you'll have to ask him.

David Nelson: That's why hog prices are higher. You're getting the benefit
         there.

Joseph Luter III: Yeah. But here again, if they want to make a gift that's
         fine.

David Nelson: On the insurance you've got $7 million pretax there. Is that
         about all you expect to get, or is there more potentially out there?

C. Larry Pope: (Jeff), I've still got two open claims that have not been
         settled and hopefully they will be settled - I think they'll be settled
         in the third quarter. And unfortunately, I don't think they'll be as
         large as this.

David Nelson: OK. And just lastly, any commentary or update on Poland and
         France, please?



Joseph Luter III: Yes. Poland is showing some improvement, (David), and we're
         - we think we're at the point now where we'll be at the break - close
         to break-even. And we're all showing and we had an awful lot of
         management changes over there. It's a long-term pull, but we are
         showing quite a bit of improvement.

         France is profitable. There has been some pressure in France, as all of
         Europe, but we see that as temporary. But ...

David Nelson: Is there any benefit in France with the mad cow disease for
         greater pork demand?

Joseph  Luter III: You would think so. And, quite frankly, I have not discussed
         that with (Jean Contine) in France and I, quite frankly, do not know,
         David.

David Nelson:  OK.  Well, thank you very much.

Joseph Luter III: But common sense would say that it should help, but I really
         have not discussed that with (Jean Contine).

David Nelson:  OK.  Thank you.

Joseph Luter III:  Thank you, David.

Operator: Moving onto the next question, this is Jeff Kanter at Prudential
          Securities.

Jeff Kanter:  Good evening, Joe, Larry and Jerry.

C. Larry Pope:  Hi, Jeff.

Jeff Kanter: Thanks a lot for hosting this conference call. We certainly
         appreciate it. Just so - just to be clear, the operating number was
         around 73 cents. This gain contributed eight cents to earnings, is that
         correct?

C. Larry Pope:  Jeff, I assume that you're referring to the $7 million ...

Jeff Kanter:  That's right.

C. Larry Pope:  ... insurance settlement?

Jeff Kanter:  The settlement.  That's right.

Joseph Luter III: You have to keep in mind, Jeff, that most of this insurance
         claim was not for hogs that were lost almost a year ago. Most of this
         claim was because of reduction losses. During that period of time we
         had to - we got out of the rhythm




         of breeding sows and - which has - our hog numbers were down because we
         had this problem - I forgot when the (buzz) were.

C. Larry Pope:  Last fall.

Joseph Luter III:  It was last fall.

Jeff Kanter:  That's right.

Joseph Luter III: So, really, I don't think you should view very much of that
         $7 million as a one time gain. I think it's really - it's an insurance
         claim that's compensated for real production losses that we've had in
         the last three or four months as a result of getting out of cycle last
         year.

C. Larry Pope: Hey, Jeff, you do realize that the insurance settlement was
         not for physical damages. This is business interruption losses. This is
         productivity losses on sows not producing baby pigs and baby pigs not
         growing up to come to the packing plant. It's lower production that the
         hogs ultimately were not produced, didn't have the efficiencies
         associated with sow consumption, and medication losses. You are aware
         of that? This is not physical damage to facilities.

Joseph Luter III:  That's correct.

Jeff Kanter: Yeah. OK. I'm just trying to, I guess, figure out the
         difference, whether this 81 cents should be considered an operating
         number. I guess your sense is that it should.

Joseph Luter III: I think so. It may be a penny there, two pennies perhaps.
         But I think the vast majority of that $7 million it should be an
         operating number, because there's no question the flood did affect that
         productivity here in recent months.

Jeff Kanter: OK. And looking into the third quarter, I know that you're
         squeamish about giving guidance, but you've - even if hog production
         income goes down, as it should, do you think you could still report the
         number comparable to the 70, 80 cent type of number that - consensus is
         at 78 cents. Is that a doable number, do you think?

Joseph Luter III:  You just won't give up, will you, Jeff?

Jeff Kanter:  I'm just trying.

Joseph Luter III: No, I - kind of historically the third quarter is always our
         most profitable quarter. And I'm not going to predict a number, but
         something between 70 cents and 90 cents wouldn't surprise me at all.



Jeff Kanter:  Well, that's right where consensus is.

Joseph Luter III:  Yeah.

Jeff Kanter:  And I know you said you didn't want to talking about giving up.

Joseph Luter III: Yeah. It really depends upon how good the ham business is
         the last couple of weeks in December. It really depends upon whether
         the hog prices will - what they will do. This is just not the kind of
         business that we can just accurately predict what our quarterly results
         will be. I'll just say we - there's no question in my mind they'll be
         up substantially in the third quarter, but exactly what they're going
         to be - we're only three weeks into the third quarter and things look
         pretty good.

Jeff Kanter: OK. Thanks for your clarity there. Finally, I know that you
         don't want to talk about IBP, but maybe you could just answer this
         question. IBP management and their bankers basically came out today,
         saying that earnings for 2001 are going to be somewhere around 80, 90
         cents below where consensus was for 2001, which is a wild number. Cap
         ex's are saying for this year and next year is going through in all
         expectations, et cetera. The point of this question is did you know
         about those numbers going in and, more importantly, does it change - if
         you were to be successful with IBP, would it change your accretion
         outlook that we all kind of work through our models, should you be able
         to get IBP? Can you make a comment or two on that?

         Hello?

Joseph Luter III: Jeff, we're on - we have a confidentiality agreement with
         IBP. We feel we cannot comment on that, as we said at the start of the
         call. But we just can't take questions on our offer to acquire IBP
         today.

Jeff Kanter: OK. And then finally one last question. I think I know the
         answer to this. But I understand that Joe was talking to the Iowa Farm
         Bureau today. Can he at least give us some color as far as sentiment of
         the farmers out there based on what you heard today, Joe? Or is that
         ...

Joseph Luter III: Yes, I think I can. About - I guess it's been about 10 days
         ago I did go to Florida and there was a National Pork Producers Group
         and this was, I guess, 100 people down there. But these were the larger
         producers within NPPC. And I would characterize that meeting as very
         good. I made all the arguments of why the IBP-Smithfield deal would be
         much better for the hog producers than the leverage buyout that's been
         proposed. I think the facts speak for themselves and I think I made a
         very forceful argument and I think it was pretty well received.

         Now, today I went out and talked to the Farm Bureau in Iowa and
         probably there's a little more - not probably, there definitely was
         more hostility, more




         skepticism, if you will, among this group, which we fully expected. But
         I was - I think I was courteously received. The response after my talk
         was perhaps a little bit - the response of the audience was a little
         more positive after my talk than it was before it began. There's still
         skepticism out there. That is a skeptical group, as you probably would
         guess. I don't know what they're going to do, but I will say this, that
         I had been pleased thus far that there hasn't been real severe
         criticism of this acquisition. We thought maybe there would be, but I
         think once everyone understands all the facts, and that's really what
         we've been trying to do is to get the facts out there, that there's
         really no question that the hog producers in this country would be much
         better off with the IBP-Smithfield combination than a highly leveraged
         IBP in the next two, three, four years.

Jeff Kanter:  And you think the Iowa farmers got that message?

Joseph Luter III: Well, they got the message. Now but here again, you're not
         going to change in one meeting attitudes that have been around for 100
         years. And so, I don't want to predict exactly what they're going to
         do. I just will say that I think that they listened intently to views
         that they perhaps had not heard before.

Jeff Kanter:  OK.  Well, that's helpful.  Once again, thanks for the call.

Operator: Moving onto the next question, this is Christine McCracken, Midwest
         Research.

Christine McCracken:  Yes, good evening.

Joseph Luter III:  Hello, Christine.

Christine McCracken:  Congratulations on a good quarter.

Joseph Luter III:  Thank you.

Christine McCracken: Sounds like it's a little busy up there, all those sirens.

Joseph Luter III:  This is New York City.

Christine McCracken: Yeah, I know. Got to come over to Cleveland. It's a lot
         more quiet here - lot quieter.

         Just a couple of questions. One, you've mentioned that the processed
         meat business was doing very well. We've been hearing it's been getting
         a little bit more competitive. I'm wondering if you could comment on
         that and maybe your outlook over the maybe second half.

Joseph Luter III: Yeah. I think it's - it is getting more competitive. I mean,
         the people that are in the fresh meat business are trying to - all of
         the people in the fresh




         meat business, most of them, are trying to increase their percentage of
         processed meats. IBP is doing that. Smithfield is doing that. ConAgra
         is doing that. We had been focusing this year not on volume increases
         in processed meat, but increasing our margins. And that's what we're
         focusing in on and we've had some pretty good results from that. But
         it's - yes, it's very, very competitive out there, but at the same
         time, we continue to be very excited about the lean generation program,
         the case ready program and the - we're way ahead of budgeted in that
         area of our business and that probably - that area probably gives us
         more excitement than as far as future potential to increase
         profitability than selling a few more pounds of hot dogs, so to speak.

Christine McCracken: So, am I to understand you correctly? Have you been taking
pricing on processed meats?

C. Larry Pope:  Taken - would you repeat that again, Christine?

Christine McCracken: Have you increased your prices on your processed meats?

Joseph Luter III:  We have made a strong effort to increase our margins.

C. Larry Pope:  That's the right answer.

Joseph Luter III: Yeah. Which would be prices, yes, because our raw material
         prices have gone up, so prices have gone up. But we're just - we're
         trying to show some leadership in the industry and just not be obsessed
         with volume. We're trying to increase margins.

Christine McCracken: OK. And then I guess just a follow up on case ready. You've
         mentioned obviously the expectations there that that's going to be a
         major driver for you going forward. What - how has the acceptance - or
         what are you hearing from obviously Wal-Mart? Or have you had inquiries
         from others? Is that something you're expecting to expand?

Joseph Luter III: Oh, yes, we're definitely expecting to expand that and we're
         ...

C. Larry Pope:  And, Christine ...

Joseph Luter III: We've got other case ready customers, beside Wal-Mart. We've
         got Kroger, Engel's, Weiss Markets up in Pennsylvania. There's no
         question - and I think as you know, Wal-Mart is building a store there
         as we speak, which do not have a butcher shop in the back. And no
         question that this is something that should've happened 10, 15, 20
         years ago but did not for a variety of reasons. But I think Wal-Mart is
         going to make it happen and there's no question in my mind that it's
         going to eventually be embraced by most, if not all, of the industry.
         You might have small individual butcher shops for specialty cuts
         perhaps, but I




         think it's the wave of the future. And - but I think most people would
         - in the industry would agree with that.

Christine McCracken: What timeframe are you talking about in terms of the
complete conversion over to hedge really?

Joseph Luter III:  Oh, I don't think you'll ever get a complete conversion.

Christine McCracken:  Let's say 80 percent.

Joseph Luter III: But I think it'd be well over 50 percent within four to five
years.

Christine McCracken:  OK.  And then, just ...

Joseph Luter III:  And that's strictly a guess.

Christine McCracken:  Yes.  Nobody can tell, right now.

Joseph Luter III: But as Wal-Mart has gone to this, their sales per store, that
they have gone to it, have gone up on pork.

Christine McCracken:  OK.

Joseph Luter III:  So it's being accepted by the public.

Christine McCracken: And I guess, just one, final housekeeping issue. Wondering
         -- it looks like corporate expense went up quite a bit in the quarter.
         Is it -- am I correct in that assumption and ...

Joseph Luter III: Well, we've got a much bigger company, of course. And of
         course, we're -- you know, we're involved in a lot of extracurricular
         activity, at the moment. But ...

Christine McCracken:  Is that legal and ...

Joseph Luter III:  That's true.  Yes.

Christine McCracken: OK. How much of that would you say is tied to legal
         expenses?

Joseph Luter III: I really don't know. I really don't know. But there's no
         question that we've had an awful lot of legal, recently. But I can
         assure you that, you know, we are aware of that and we will be
         addressing that when things slow down a little bit.

Christine McCracken: So you'd expect that same rate to kind of carry over into
the second half, maybe a little bit ((inaudible))?



Joseph Luter III: Well, I mean, I think, if you look at the size of the
         company, today -- I mean, for instance, this time, last year, this
         time, Murphy was not bought. And that's a very big part of Smithfield,
         today, and that was not included in last year.

Christine McCracken:  OK.  Thank you.

Operator:  Next up on the roster in Andrew Wolf at BB&T.

Andrew Wolf: Hi. Good afternoon. Just want to clarify, on the insurance gain
         -- I guess we just want to clarify. You're saying, almost all of that
         had to do with pigs that were -- would have been -- mature pigs that
         would have been brought to market, that, you know, the sows were killed
         and then, the fact ((inaudible)) mainly this quarter?

Joseph Luter III: It's business interruption insurance, loss productivity, not
         hogs that were lost or not buildings that were damaged or destroyed.
         It's -- most of it was on the business interruptions side.

Male:    But Andy, let's clear one thing. I think you made the comment about
         sows being killed. This was not related to sows die. It was not -- it's
         not that type of inefficiency. It's the fact that the breeding cycles
         of the animals was -- were disrupted with the rising water.

Joseph Luter III: Yes. We were focusing, last year, on getting feed to the
         animals and all of that and not breeding the animals.

Male:    And abortions that we had, with the animals aborting pregnancies,
         during that process. So what that has is a long-term effect, down the
         road, when the hogs don't end up being born and don't end up coming to
         market, in terms of just more animals that we would have produced.

Andrew Wolf: Thanks. That helps me understand that. And most of it did happen
         -- of the seven million, most of it to the second quarter. Correct?

Male:    It's all -- I guess, my only answer to that would be, Andy, it's
         happened over the entire 12-month period and clearly, these animals
         were on a 48-week raising cycle so that you're going to have the impact
         -- you had different impacts across different quarters and I can't tell
         you that we, with any kind of scientific ...

Andrew Wolf:  OK.

Male:    ... ((inaudible)) have gone through that. I will make one point that is
         important to this is that, the insurance ((inaudible)) we got, is after
         $2.5 million deductible that we took to get to that. So our losses are
         in excess of $7 million. That's the amount that we've gotten, to-date,
         exclusive of a large deductible. So our losses




         were far in excess and I think if you go back and look at some of our
         earlier quarters, particularly, the third quarter of last year, we
         indicated that that hurricane was going to impact our operating
         results.

         And they are impacting them. We've taken our deductibles and we still
         have got two, somewhat-sizable claims, still outstanding, that we have
         not, yet, settled. Yet, the results have -- the negative impact of
         those have gone through our operating results and -- so I hope that
         helps you.

Andrew Wolf: Yes. Another question on the income statement is, interest
         expense kind of nudged up a little, again. Is that, mainly, due to some
         floating rate debt or is that you're ...

Male:    Two things are happening, there, Andy. We do have our -- certainly, we
         have been impacted by the rate increases. The other thing that's had an
         effect is the fact that we got this -- the IBP investment in the IBP
         shares we've got that the interest expense are not hitting the bottom
         line.

Joseph Luter III: And also, keep in mind that hog prices are substantially
         higher than they are before, so our receivables have gone up. Inventory
         has gone up and we've had -- and we have to finance that.

Andrew Wolf: Got it. Last question is, kind of gets to IBP, hopefully, in a
         way that you'll be comfortable answering. Kind of forgetting the
         motivation for what the actions may be, just looking at the competitive
         environment, should we conclude, from what you're saying, that IBP is,
         in a sense, flooding the market with fresh pork?

Joseph Luter III: I think you have to ask them why they're doing what they're
         doing. I -- you know, I'm not going to get into a guessing game or why
         IBP is doing anything, at this point.

Andrew Wolf: Sure. I'm saying, excluding the guessing and the motivation. I'm
         just asking you, from a technical industry viewpoint, do you see them
         producing a lot of pork -- fresh pork, at this time?

Joseph Luter III:  Do I see them producing -- I don't understand the question.

Andrew Wolf: Do you think they have -- are putting a lot more pork on the
         market than they normally do?

Joseph Luter III: No. No, I don't. I mean, you know, the hog numbers are down.
         I think it's roughly the same as it was last year. Ag numbers are down.
         We have, purposely -- you know, we've got a few, less hogs in the
         country, this year, and we expect the volumes to be down as a result.
         All I'm saying is that we have not been pushing fill levels, despite
         the fact that we -- you know, that we own an




         awful lot of hogs, simply because we just haven't had the profitability
         in the fresh meat results that we normally enjoy during the fall of the
         year.

         But I've been in this business, now, a long time and generally, what
         happens if you have a disappointing three or four months then, the next
         three or four months, generally, surprise you on the positive side. If
         you have a good three or four months that's much better, then a lot
         times, the next three or four months is weaker. This is just a business
         that -- you know, I'll just repeat one, last time that, that you need
         to look at it in a time capsule, a little bit larger than three months.

         I think the important point that -- I think that we're interested in,
         and I hope that you, people, will focus in on, is that we run the
         business, looking at the long term and the long-term trends are very,
         very positive for the first, six months and they look like they will be
         very positive, going forward. And we're just totally elated that we are
         finally beginning to realize the numbers that we expected, with all the
         effort and time and money that we have spent, in the last 10 years,
         moving down the road to having a very large, vertically-integrated pork
         operation.

         And we don't see anyone that will have the ability to duplicate, on any
         scale, comparable to Smithfield, for what we have, for an awful long
         time, if ever. And we are still convinced that -- you know, that
         vertical integration is going to -- you know, is going to do for
         Smithfield, what it did for the major poultry players, you know, 10 or
         15 years ago. So we're very, very optimistic that we're well-positioned
         for the future ((inaudible)) our competitors.

Andrew Wolf: Thank you. Last, quick question. Could you just comment on the
         trend in the cut-out?

Joseph Luter III: The trend in the cut-out? No, I don't think there's ever any
         trend in cut-outs. I -- normally, your cut-outs are always better in
         October, November and December, but as I said, just a minute, or two,
         ago, usually when they're worst than you expect for three or four
         months, they -- the next three or four months, generally, they're
         better than what you would expect. Normally, the cut-outs are worse in
         January, February and March, than they are in October, November and
         December. But that may not be the case, this year.

         It really goes back -- you've got to keep in mind, it really goes back
         to the discipline of the people that are in the business and when you
         don't have this discipline, and in my judgement, you have -- it's
         almost non-existent, right now, and in light of some of the behavior of
         some of the major players. But you know, that's just the business that
         we -- you know, that we live in. But here again, since we're in both
         sides of the business, you know, we're pretty-well protected.



         But generally speaking, when you -- as I say, when the cut-outs are not
         as good in the historical good quarters, they tend to be a lot better
         in the historical bad quarters. And that's just something that I have
         observed, over 25 years.

Andrew Wolf:  Thank you, and congratulations on the quarter.

Operator: And ladies and gentlemen, as we prepare to wrap up the Q&A session, we
         will hear from James Borges at First Union Securities.

James Borges: Well, I'm glad I made it in before you cut it off. I've got a
         couple of quick questions. I appreciate the conference call. First of
         all, on lean generation, what's your forecast for tonnage, this year?

Joseph Luter III:  Let me -- I know it's up, 20 percent, this year.

James Borges: Does that put it in the mid-teens for the first half, in
         millions of pounds, or ...

Joseph Luter III: Ask that question, again, just so I hear the question, one
         more time.

James Borges: Well, your forecast for tonnage for lean generation for the
         full year.

Joseph Luter III: I think we have been projecting this number to equal about
         100 million pounds, maybe, 105, something like that.

James Borges: OK. And could you characterize the magnitude of raising
         efficiencies, realizing the quarter and, also, synergies between the
         Meat Processing Group and Hog Production Group?

Joseph Luter III: Would you repeat the question? We do have (Jerry Godwin),
         here, who is the President of Murphy Farms. I might let him answer the
         question, since this is his end of the business.

James Borges: Sure. I was wondered if you had characterized -- you mentioned,
         in your press release, raising efficiencies realized and synergies
         between the Meat Production Group and the -- I mean, Meat Processing
         and the Hog Production groups. I was wondering if you could
         characterize the magnitude of those.

(Jerry Godwin): Well, we haven't had a full year of the program, yet, but I
         can tell you that, through just the synergies of the Hog Production
         Group, in North Carolina, alone, that we've been able to extract
         approximately, on an annualized basis, we're estimating about $10
         million.

         The other thing we've been able to do, and we have yet to have a full
         turn at this, as well, but I think this will continue to show
         improvement. We've been able to go to -- instead of grading animals,
         going to whole-house run-outs, which allows




         us to get more throughput through the system. So we actually can get
         more pounds through the system because we keep the animals for a --
         less number of days in the system and we can -- we get savings by going
         in and not having to grade and go back, three times, and taking the
         animals out of the house. We go, once. And then, take them to the
         slaughter facilities. I don't know what the end result of that is going
         to be. It's going to be significant, but I don't want to give you a
         number that I don't really have a feel for, at the moment.

James Borges: Good. Well, that's helpful. And again, on the SG&A line, you
         mentioned legal expenses and is there anything else that was in there
         that made it unusually high -- higher, in the quarter.

Joseph Luter III: The other thing that's affecting the SG&A line is, simply,
         the SG&A expenses associated with Murphy Farms. Murphy Farms was not in
         last year's second quarter. They are in this year's second quarter. So
         it's their SG&A expenses.

James Borges:  Sure.

Joseph Luter III:  That help answer that?

James Borges: It does, but I would think it would be more comparable to the
         first -- in comparison, sequentially, in quarters, versus last year
         with a similar sales number. You have SG&A, higher ...

Joseph Luter III: Well, keep in mind, most of Murphy's sales are not recorded
         because they're -- the hogs that we -- we run the vast majority of
         Murphy hogs are slaughtered in Smithfield facilities and those Murphy
         sales are not recorded. You understand that?

James Borges:  Yes.

Joseph Luter III: If we had sold all of the Murphy hogs to IBP, our sales
         numbers would have increased, dramatically.

James Borges:  Right.  OK.  That ...

Male:  You do understand the point, Joe's making, here, don't you?

James Borges:  Absolutely.

Male:    OK. OK. Because there's a very small component of -- there's a very
         small component of this quarter's sales. In fact, it's only $50 million
         of those that are actually of sales of Murphy Farms are in the total
         sales number of 1.4 billion.

James Borges:  Sure.



Male:    The vast majority of sales are internal, so you have the SG&A expenses,
         associated with the large operation and there's, literally, no sales
         number, there. I just hope you understand that.

James Borges:  Oh, yes.

Male:    Because you get the big impact through, cost of goods sold.

James  Borges: Right. Thanks for the explanation and I look forward to hearing
         about the IBP transaction.

Operator: That will conclude the question-and-answer session. Gentlemen, I'll
         turn things back over to you to make any additional or closing remarks,
         today.

Joseph Luter III: I don't have anything further to add. I -- we're still --
         you know, we're still optimistic about IBP, I will say that. We -- and
         we're working very hard, you know, to bring this about. Whether we do
         it, or not, I guess, remains to be seen, but it's -- we think it's
         worth the effort and if we are able to do it, I think it will make us
         -- it'll be very good, you know, here again, long-term for Smithfield
         Foods. Now, keep in mind, when we bought Murphy and Carroll's, we
         bought them in a down cycle, if you will, and we were subject to some
         criticism, but we looked at the long pull and I think that, as it
         turned out, you know, thus far, and I know it hasn't been a long time,
         but thus far, it's working very, very well.

         And we do understand that -- you know, that, you know, the cattle
         cycle, next year, might be -- could be some weakness. But, we as a
         company, once again, try to make decisions, based on a long term, not
         so much on whether it's going to have, perhaps, subcosts, short-term
         results.

         So I think most of these people have been following this company for a
         long time, know this, but I just wanted to repeat it once again.

Male:    Thanks very much for joining us today.

Operator: That concludes today's conference call. Again, thank you all for
         joining us. That will conclude the program.

                                       END