Smithfield Foods will work with Beijing DQY Agriculture Technology, a Chinese egg producer, on a biogas project in China.

According to a statement on DQY’s website, the biogas project will produce 3.5 million cubic meters of methane annually and have a power-generating capacity of 1 megawatt. DQY and Smithfield will invest $1.8 billion in the joint venture, reports China’s Xinhua news Agency.

Smithfield and DQY officials signed the agreement yesterday at a farm symposium held in Des Moines, Iowa, coinciding with China’s Vice President Xi Jinping’s trip to the state. During the Chinese delegation’s U.S. visit this week, the two countries agreed to sign a five-year accord to cooperate on agriculture trade, production and food security. This included a large soybean purchase.

China’s large and growing population, as well as its citizens’ income growth has increased demand for a wide range of agricultural products.

Source: Bloomberg news, DQY