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Tuesday, June 4, 2013

$4.7 Billion by China for a US Pork company?

Why would a Chinese company spend $4.7 Billion for a US food company?

Because food quality in China is a huge issue, and either they are going to make money by using the US name in China for selling pork (safe food), and/or they hope to use the expertise from the company to fix their supply chain for food in China.

The question I have is it possible to import pork into China the volume needed to pay for the purchase, or due to politics will they have to locally source pork from within China, usually from small farmers with a system that has known quality issues? I hope China can improve the quality of their food.

China has a huge food safety issue, and the US has among the best food quality in the world. The US food industry in most areas, is among the cutting edge on value and net exporters. US farmers and the food industry have done an amazing job of making food cheaper, and higher quality of the past 100 years. A 100 years ago, Chicken was more expensive than beef. The promise of chicken in every pot, would have been like promising filet mignon dinners to all. It was after WW2 with the industrialization of chicken farming, that the price of chicken fell.

What China Can Learn From America's Hot Dogs - The Wall Street Journal

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