Tyson Foods Inc. denied it is in talks to sell pork to China, according to the company’s chief executive Richard Bond. Also, it is unlikely the company will sell pork there anytime soon.
In clarifying remarks he made during a conference call on Monday, Bond said that while China does offer good potential for pork sales, the economics currently do not make it feasible for Tyson to do it.
One reason is China insists that the pork be from hogs that have not been given ractopamine. Ractopamine is a common feed additive in the United States to increase the hog's lean meat production.
Bond cited China’s unwillingness to pay enough for ractopamine-free pork to make it worthwhile for Tyson. "It costs more for the hog producer to produce ractopamine-free pork. But the pork that China is interested in buying and the prices that it is interested in buying that pork for, don't match up," Bond said.
During Monday's earnings conference call Bond said Tyson has talked with COFCO, China's largest oils and food importer, about pork. But on Thursday, he clarified that saying a deal was not pending. "There is no potential profit for either the hog producer, or us, currently, in trying to sell ractopamine-free pork to China," he said.
China bought a large amount of U.S. pork last year. U.S. pork producer Smithfield Foods Inc. said in 2007 that it was in a deal to sell 60 million pounds of ractopamine-free pork to China.
China is seen as a good market for U.S, pork because of its huge population and because swine disease last year reduced its hog herd. "It does create tremendous opportunity, and I still believe that. But there is nothing in the foreseeable future that is a tremendous opportunity," said Bond.