click image to zoomShuanghui Chairman Wan Long Let’s start with the ‘Sayings of Chairman Wan,’ the Chief Executive at Shuanghui, the world’s newest well-known meat behemoth, temporarily shoving aside Brazil’s JBS. He said this about beef: “Chinese traditionally like to eat pork. China doesn’t have the resources to raise cattle on a large scale. If there isn’t a lot of beef, you’ll have to eat pork if you like to eat meat,”
His comment leaves open the strong possibility that he might add some more resources to his portfolio. U.S. and Australian beef interests, often one and the same when it comes to ownership, should be watching Shuanghui closely, maybe even tidying up their financials just in case a buyer comes calling from deep in the heart of China. For you doubters, here’s another hint taken from an interview with Chairman Wan Long several years ago: “Our goal is to be the biggest in China, and the leading meat supplier in the world.”
Being the prince of pork won’t get that world domination goal done. Beef needs to be a part of the Shuanghui portfolio, as does poultry. With big ambitions and big capitalist dollars behind them, to think they won’t be sniffing around America’s feed yards soon is missing the big picture, akin to stumbling into a pasture somewhere in Texas and saying, “Bull, what bull? I don’t see anything.” The Smithfield purchase is a buying signal that should be noticed by everyone in American agriculture.
To cool American consumers’ concerns about huge price hikes caused by a major boost in exports, Chinese consumers like pig heads, feet and offal, products that aren’t on U.S. menus. It should be seen as an immediate export bonanza by the pork industry. Later, as Chinese develop a taste for ham, bacon and pork chops, trading in hog futures should be the ag equivalent of owning the keys to Fort Knox.
Concerned about a lapse in food safety? More sayings from Chairman Wan: “The question of food safety, whether it’s to American consumers or Chinese consumers, is a big deal. Our nation has a tighter and tighter grip over food safety.”
Well, they don’t have a tight enough grip, yet, but the expertise they gain from Smithfield will get them there quickly.
Follow the money
Shuanghui isn’t a communist conspiracy to take over the American food supply; it is a red-blooded American capitalist conspiracy. Nearly half of it is owned by major centers of capitalism like Goldman Sachs, New Horizon Capital and CDH Investments, Singapore’s sovereign wealth fund. CDH and Goldman Sachs led a group that paid $250 million to buy out to the Chinese government’s stake in Shuanghui seven years ago.