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Food Choices And Sourcing Your Pork

May 30, 2013

OLYMPUS DIGITAL CAMERAYesterday it was announced that Smithfield‘s is the latest to sell to foreign investors. It’s good business, to sell when there’s an opportunity to sell, especially a business that has been as targeted as Smithfield’s.

Of course, those hogs available domestically will now also serve Chinese consumers with US pork.

As Baxter explained, developing countries like China favor whole carcasses because they are the most economical buys. Wealthier countries order more specialized products that they cannot manufacture themselves, but those orders can put pricing pressure on individual parts of the pig. China, however, boasts very skilled and very cheap labor that can make well more than 150 fresh products, meaning the flow of carcasses should continue for an extended period of time.

“As you pull large, consistent amounts of pork out of the U.S., it puts increased demand for the remaining pork within the U.S. across the board,” he said.

Of course, as big as Smithfield‘s is, it’s not the only source of pork for the USA. It is undoubtedly a huge part of production, and underscores that if activist actions target companies to alter buying, rather than letting demand do so, consequences can affect many. After all, it doesn’t really matter what McDonald’s wants if there are competing markets who just want food.

With 862,000 sows to produce 20-22 million market hogs annually, Smithfield is by far the top American pork producer, but Meyer and Steiner note that “China in 2012 had 49.28 million sows and slaughtered 694 million hogs. Smithfield’s U.S. numbers would account for 1.7 percent of the Chinese sow herd and 3 percent of China’s 2012 slaughter.”

So what does this mean for bacon lovers?

“We expect [Smithfield] to export more pork to China, which would leave less pork for domestic consumption and probably lead to higher U.S. pork prices as a result,” J.P.Morgan analyst Ken Goldman wrote in a note to investors.

This might seem a doom and gloom so it may be odd if I told you we’re smiling here at SlowMoneyFarm. If people truly want food choices, it’s a great time to buy direct and make that happen. There is some rumblings I’ve seen of not buying from a Chinese company, even if maintained here in the US. While many condemn the safety of the US food system, officials see otherwise:

“The Chinese like American pork,” Pope said. “They like the USDA brand. They have zero concerns [about the quality and safety of the product] when they see ‘made in America.’”

OLYMPUS DIGITAL CAMERAIt’s said it will not affect the pork supply – that hog farmers will increase volume to make up added demand. Not what people say they want.

So how about it America? Food choices for all – what might yours be? Whole direct, continue at the store, believe in America’s food safety or alter your purchasing decisions?

Of course, what people say they want doesn’t always get represented in action. Take McDonald‘s salads – which many say they want as healthy food, but what leads *sales* is beef and chicken.

What sells is what people will grow. We hope that opportunity will get people to go buy/book with us, of course. Check us out now! Think about where your pork comes from, and empower food choices, whatever that might be.

It’s why we’re here!

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