The shuttering of Smithfield Foods pork plants last week was a new twist in the U.S.'s battle against the coronavirus. But for Smithfield's Hong Kong–based owner, it's another hurdle in what's been an especially rocky road in recent years.

On April 12, Smithfield, the American food manufacturer based in Virginia, shut down a meat processing facility in South Dakota after a COVID-19 outbreak at the plant infected over 700 employees. Two days later, the company announced it was shuttering two additional meat processing facilities, in Missouri and Wisconsin, citing smaller coronavirus outbreaks and concerns that the South Dakota closure would create a bottleneck in its supply chain. A company spokesperson told Fortune the South Dakota facility will reopen after it receives clearance from local and federal officials. The Missouri plant will remain closed until the South Dakota facility reopens, since it sources raw materials from the South Dakota location. The Wisconsin facility will be shuttered for two weeks.

A Buzzfeed investigation published April 16 reports that Smithfield management did little to protect and inform workers about the virus's danger immediately following the first reported case at the South Dakota plant in late March. Smithfield did not contest any of the specific allegations in the article, but told Buzzfeed the company took a “very proactive approach” in instituting and communicating pandemic safety measures for its employees.

The coronavirus outbreak at Smithfield's South Dakota plant has stirred up baseless conspiracy theories that imported Chinese hogs were responsible for the infections. The unfounded claims seem to lean on Smithfield's ties to China; the company is owned by Hong Kong food conglomerate WH Group, which until 2014 was based in mainland China. But Smithfield denies importing any hogs to the U.S. from China and says that food-borne exposure is not a viable mode of coronavirus transmission.

In reality, WH Group's problems related to the coronavirus go beyond false rumors circulating on fringe corners of the Internet. Plant closings from the pandemic are the latest test for the world's largest pork producer, which in recent years has also contended with the African swine fever outbreak that devastated Chinese pig populations and the U.S.-China trade war.

Smithfield’s overseas owner

Chairman and CEO of the WH Group, Wan Long, has long been known as China’s “No. 1 butcher” for buying a meat processing factory in China's central Henan province in 1984 and building it into a $24 billion giant.

Over the past three decades, Long's company grew into China's largest domestic supplier of pork, but even then, it couldn't keep up with China's booming appetite.

In 2013, WH Group fully acquired Smithfield for over $7 billion in what was then the largest-ever Chinese investment into the U.S. (It was surpassed in 2017 by the HNA Group's purchase of U.S. airplane-leasing firm CIT Group.)

“The deal was aimed at increasing the supply of U.S. pork into China,” says Darin Friedrichs, a senior commodities analyst at INTL FC Stone in Shanghai. “Imported products like U.S. pork are usually seen as more premium products that can command a higher price.”

China’s growing appetite

Over the past few years, the WH Group reckoned with unprecedented challenges at home, making its foothold in the U.S. market especially important. Vicious outbreaks of African swine fever have killed up to half of China’s domestic pig population and remain a problem that is “very much still around,” says Edgar Wayne Johnson, senior technical consultant with Enable Ag-Tech Consulting and a pork industry expert in Beijing.

The disease forced producers there to look abroad for supply. WH Group, given its Smithfield acquisition, was well-positioned for the pivot—until the trade war hit. Because of the U.S.-China conflict, tariffs on importing U.S. pork to China rose up to 72%, meaning that Chinese firms had to shift again—this time away from U.S. pork producers to those in South America and Europe. In March 2019, Long said shipments between Smithfield and his Chinese companies had fallen by 45% in 2018 because of the trade war. An oversupply of pork in the U.S. led to lower margins.

China's need for imported pork, however, would buoy both Smithfield and the parent company.

The WH Group reported a 32% increase in total profits in 2019 with a growing reliance on its Smithfield operations. According to the company's 2019 annual report, in 2018 the U.S. accounted for 37% of the company's profits compared to 56% in China. In 2019, those figures shifted to 46% and 47%, respectively. The company said the growth in Smithfield's operations was driven by a "discernible expansion in exports to China" despite limitations imposed by the trade war. The WH Group reported that it shipped three times the amount of U.S. pork to China in 2019 versus the previous year.

China's pork prices "were on a tear," says Brock Silvers, chief investment officer of Adamas Asset Management in Hong Kong, which explains the spike in profits. In January 2020, pork prices in China were 116% higher than the previous year. As swine fever depleted hog stocks in China, major producers like the WH Group's Shuanghui China business remained profitable by selling existing inventories at higher prices, Silvers says.

"As a highly internationalized company, the WH Group would also have been able to repatriate its own overseas inventory, or to secure foreign supply for transport to home markets," says Silvers. On both a domestic and international level, "the WH Group kept [pork] supply flowing in China."

China relaxed the tariffs in January of this year in the run-up to phase 1 of its trade deal with the U.S., which provided the industry more hope that pork imports to China would return to normal. In February, the U.S. Department of Agriculture said it expected U.S. pork exports to China to grow by nearly 13% in 2020 compared to 2019. COVID-19 has reduced China's demand for pork somewhat as restaurants closed during months of lockdowns, says Friedrichs. Yet the Chinese Ministry of Agriculture said on Monday it projects all pork imports to China to increase 33% this year.

Coronavirus vs. meat supply

The WH Group said earlier this year that it was bracing for a blow from the coronavirus, as much of China shut down in early 2020. In a March 24 earnings call focused on the company's 2019 performance, executive director Ma Xiangjie said WH Group planned to make up for the loss of Chinese production by ramping up pork imports from abroad.

Ma said the firm faced "great challenges" in delivering products at the beginning of the outbreak, but it eventually resolved those issues and the company didn't expect the coronavirus to have a "serious impact" on the Chinese business.

On the same call, CEO Kenneth Sullivan of the Smithfield division said that up to that point the company's first-quarter results were looking "strong."

That was before Smithfield shut the three U.S. facilities.

Those closures pose a brand-new threat. In a public statement, the company said the South Dakota plant alone accounts for 4% to 5% of U.S. pork production. Even amid the trade war in 2017, Smithfield exported 17.6 million kilograms of pork to China, making it the largest U.S. supplier for the Chinese market. (The WH Group did not respond to Fortune’s requests for comment.)

Smithfield isn't the only meat producer contending with the coronavirus crisis. On Monday, JBS S.A., based in Colorado, announced the closure of a Minnesota pork plant due to a COVID-19 outbreak. Combined, the facility shutterings leave little slack in U.S. hog slaughtering capacity; it's now running at 90%.

Indeed, the latest hurdle for WH Group represents a looming crisis for the U.S. In a statement, Sullivan said the South Dakota closure alone was "pushing our country perilously close to the edge in terms of our meat supply." He said Smithfield considered itself obligated to keep plants open if possible. "We have a stark choice as a nation: We are either going to produce food or not, even in the face of COVID-19," he said.