Here's How Much The Peanut Butter Recall May Have Cost J.M. Smucker

A food recall is not something anyone can shrug off, especially when it involves a product that's been contaminated with salmonella, which, per the Centers for Disease Control and Prevention (CDC) can cause diarrhea, fever, and stomach cramps. The symptoms may occur about six hours after infection, and you could feel ill anywhere between four days to a week. But it could also get serious, particularly if you have a weaker immune system. The CDC says salmonella causes 1.35 million illnesses and 420 deaths every year.

This is why it should come as no surprise that when the J.M. Smucker Company announced its annual earnings, it also said it was expecting to take a $125 million hit from the salmonella contamination of its Jif peanut butter branded products, per Reuters. The company said in a press release that it also expects to see a write-off of 90 cents per share from its earnings as a result of the recall. The cost is to be expected since recalls often involve having to pull a defective product from grocery store shelves and compensating the consumer who purchased the item (via Investopedia). 

Mark Smucker, the company's President, and CEO said that as of June 7, the company was working alongside the U.S. Food and Drug Administration (FDA) to ensure that the make sure that the facility responsible for the contamination, which is located in Lexington, KY, is "up and running as safely and as quickly as possible," per The Motley Fool. Smucker further said that the company's two other facilities in New Bethlehem and Memphis, are clean, and its outputs have not been affected by the recall.

All and all, nearly 50 Jif products were involved in the initial recall, and it has now been extended to Jif products that were exported to markets, including Canada, Dominican Republic, Singapore, Malaysia, Taiwan, Korea, Thailand, Honduras, Spain, and Japan, per the FDA. It's also been extended to brands that might have used Jif peanut butter to make their own products, including candy, sandwiches, and trail mix. CBS reports that since the recall was announced, 17 companies have had to pull their products, including Walmart and Del Monte.

$125 million might sound like plenty of cash, but that price tag is a fraction of the amount used to settle to some of the largest food recalls in U.S. history. Per Investopedia, that honor goes to California-based meatpacking firm Hallmark/Westland, who had to recall 143 million pounds of beef that were sent to school lunch programs. The move was a "Class II recall," per WebMD, which meant the product wasn't contaminated, but because the product was deemed a health hazard, it was pulled from distribution. The company was rapped for what were seen as "inhumane" practices at the plant, including slaughtering cattle that were too sick to walk, which is banned under federal law. The company eventually went bankrupt over what Investopedia called "recall-related costs."

There was also another peanut butter recall involving the Peanut Corporation of America, whose products were also tainted by salmonella. Investopedia says more than 3,200 products were pulled out of customers' pantries and off supermarket shelves. Unfortunately, the product was deemed responsible for the death of nine people, and it also made more than 600 people in the United States and Canada sick. Like Hallmark/Westland, the company eventually went bankrupt, and its executives went to jail, per USA Today,  and the peanut industry as a whole was exposed to damages set at more than $1 billion, according to Investopedia.