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More "Power Hour Chatter" on Is Smithfield Foods, the world’s largest pork packer and hog producer, linked to the outbreak?

Is Smithfield Foods, the world’s largest pork packer and hog producer, linked to the outbreak? Smithfield operates massive hog-raising operations Perote, Mexico, in the state of Vera Cruz, where the outbreak originated. The operations, grouped under a Smithfield subsidiary called Granjas Carroll, raise 950,000 hogs per year, according to the company Web site.

On Friday, the U.S. disease-tracking blog Biosurveillance published a timeline of the outbreak containing this nugget, dated April 6 (major tip of the hat to Paula Hay, who alerted me to the Smithfield link on the Comfood listserv and has written about it on her blog, Peak Oil Entrepreneur):

Residents [of Perote] believed the outbreak had been caused by contamination from pig breeding farms located in the area. They believed that the farms, operated by Granjas Carroll, polluted the atmosphere and local water bodies, which in turn led to the disease outbreak. According to residents, the company denied responsibility for the outbreak and attributed the cases to “flu.” However, a municipal health official stated that preliminary investigations indicated that the disease vector was a type of fly that reproduces in pig waste and that the outbreak was linked to the pig farms. It was unclear whether health officials had identified a suspected pathogen responsible for this outbreak.


China's Cofco Agrees to Buy 4.95 Percent of Smithfield Foods

By William Bi and Feiwen Rong

July 1 (Bloomberg) -- China's Cofco Ltd. agreed to buy 4.95 percent of Smithfield Foods Inc., the world's largest pork processor, paving the way for possible joint ventures in the Asian nation.

Cofco will buy 7 million shares at a price to be decided later, Virginia-based Smithfield said yesterday in a statement distributed by PR Newswire. The stake would cost Beijing-based Cofco, the country's largest grain importer, $139 million at yesterday's close of $19.88.

Rising incomes in China, the world's fastest-growing major economy, are spurring demand for a diet with more meat. The companies may jointly start processing plants in China, Beijing Orient Agribusiness Consultant Ltd.'s Guo Huiyong said.

``Cofco wants to play big in the hog sector, and it has no experience in slaughtering and processing,'' Guo, a livestock analyst, said by phone from Beijing. The agreement may also pave the way for Smithfield to buy into Cofco's meat unit, he said.

Pork prices in China, the world's largest consumer of the meat, surged 38 percent in May from a year ago as disease, bad weather and rising costs reduced supplies.

``China is experiencing rapid growth in pork consumption and consumes more pork than the rest of the world combined,'' Larry Pope, chief executive officer of Smithfield Foods, said in the statement. ``Cofco has introduced Smithfield to many opportunities in China.''

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Cofco's President Patrick Yu met with Pope who visited China in January, and the two companies plan to jointly meet the Asian country's demand, according to a Jan. 25 statement on Cofco's Web site.

The agreement probably won't lead to ``a big increase in China's pork imports,'' Guo said. The lower costs of feed and labor make China's pork cheaper than imports, he said.

Smithfield in August said it won a contract to ship 60 million pounds of pork to China, the first of its kind. No further major sales followed, as issues related to quarantine and prices stalled negotiations.

``The more important thing is we will work closer to build the pork industry in China, like set up breeding and slaughtering businesses,'' said Wang Lin, a manager at Cofco.

Smithfield Foods also said it will sell $350 million of convertible senior notes to help pay debt.

To contact the reporters for this story: Feiwen Rong in Singapore at frong2@bloomberg.netWilliam Bi in Beijing at





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