Smithfield Foods president and CEO C. Larry Pope visited China recently and is optimistic about his company's prospects there. He has promised to send a team to the country over the next two quarters to continue exploring opportunities.
"This is a market we need to pay attention to going forward," Pope said. Smithfield made headlines last summer after agreeing to sell 60 million pounds of pork to a Chinese trading company.
China consumes half the world's pork, and two-thirds of the country's protein diet consists of pork.
China raises 650 million pigs annually, and that market is expanding rapidly. While acknowledging that China would likely rather not rely on pork imports, Pope added, "They've got concerns with land usage, problems with grains — particularly soybeans — and water issues. China has to deal with whether they can commercialize the industry fast enough to feed the people. And that's where I think the United States plays a role."
Pope said Smithfield has an advantage over other processors when it comes to supplying pork to China thanks to vertical integration. "We can design products for specific markets," he told Meatingplace.com. "We can control feed regiments and eliminate ractopamine from feed. It's very difficult for our competitors to do; you need to be vertically integrated in order to do that."