Articles in this document:

· Tyson Foods Sends Meat to Beijing

· Food safety an Olympic challenge for Beijing Games

Part of the challenge for Chinese officials trying to clean up the industry comes down to the very nature of farm breeding.

· How We'll Make a Fortune Exporting Pork to China

Tyson Foods Sends Meat to Beijing

By Kim Souza

The Morning News - Arkansas

July 31, 2008

SPRINGDALE - American athletes competing in Beijing next month will see plenty of familiar names, including Tyson Foods Inc., the official protein sponsor of the 2008 U.S. Olympic team.

The Springdale-based meat giant said it will send a shipment of 25,000 pounds of beef, chicken and pork to help feed American athletes, who will consume 20,000 meals during the course of the competition.

It's the first time the U.S. Olympic Committee has provided athletes three meals a day during the games, the committee said.

Tyson Foods signed on as an Olympic sponsor in 2006 and has been supplying protein to all three U.S. Olympic Training Centers since. The partnership will run through the 2010 winter games in Vancouver, the company said.

John Tyson, company chairman, said at the time that the alliance made good business and social sense for Tyson Foods. He said as active sponsors the company would provide support to future Olympians at the grassroots level, while also building protein awareness about the important role it plays in a healthy diet.

Alignment with the Olympics promotes a spirit of goodwill, but given the financial outlay, some say immediate cash rewards can be hard to track.

Tyson Foods did not disclose the financial terms of its five-year sponsorship.

Marketing experts agree investing in Olympic sponsorships can produce dividends for companies wanting to expand their name recognition through association.

"Athletes are icons of health and through Tyson's agreement to feed the Olympic athletes, the company is now associated with the huge market trends of wellness and healthier lifestyles," said Thomas Jensen, marketing chair at the Sam M. Walton School of Business at the University of Arkansas.

He said Tyson Foods' association with the Olympic Games is a good one to strengthen brand credibility on a world stage.

Jensen used Wheaties cereal as an example. He said the champion pictured on the box was a ringing endorsement for the cereal brand.

Tyson Foods has made no secret of its desire to expand its brand in China, recently signing a deal to purchase a majority share of the country's fifth-largest chicken processor.

One expert in Chinese culture said Tyson Foods still has some obstacles to overcome among Chinese consumers.

Ka Zeng, international political science professor at the University of Arkansas, said while the growing urban middle class in China recognizes and values well-known international brands, their shopping habits may work against a meat company like Tyson Foods.

Zeng, who grew up in China, said Chinese consumers typically shop for fresh meat and fish in local markets. It's not their custom to buy pre-packaged meat like that sold in the U.S., she said.

nwaonline.net

Food safety an Olympic challenge for Beijing Games

By Lindsay Beck

Reuters

Jul 30, 2008

BEIJING, July 31 (Reuters) - Pampered pigs or processed pork? Farm-fresh or greenhouse grown?

With China's food supplies under scrutiny following a series of health and safety scares, Chinese officials are taking no chances for the Olympic Games next month.

At the headquarters of China's product safety watchdog, a bank of screens shows real-time video monitoring of food-related facilities, including one churning out chewing gum, and customs bureaux that handle food imports and exports.

The monitoring station can receive signals from 1,000 facilities at one time.

"During the Beijing Olympic Games, the inspection and quarantine agencies will use the monitoring network to have real-time monitoring over each product to guarantee food safety," Sun Bo, an official at the General Administration of Quality Supervision, Inspection and Quarantine, told reporters.

China has launched a massive coding system incorporating everything from vegetables to drinking water after a wave of scandals highlighted corruption in oversight bodies and a willingness among manufacturers to flout standards in order to maximise razor-thin profit margins.

But basic questions remain over how food safety will be assured during the Games, not least the safety of meat, which has been a focus of concern over the possibility that residual drugs in animal feed could cause positive doping tests.

The use of antibiotics and growth stimulants to boost yields is common in food production globally, including in China where it is poorly regulated.

"It's going to be a major challenge," said Grover Niemeier, a Shanghai-based adviser on food and sanitation issues.

"The standards in Chinese meat generally fall way short of what is needed or is realistic to try to ensure food safety in avoiding false drug tests during the Games," he added.

THIS LITTLE PIGGY

Part of the challenge for Chinese officials trying to clean up the industry comes down to the very nature of farm breeding.

Hogs in China are typically raised on small farms and then aggregated, making random tests in any one consignment meaningless and making it almost impossible to trace origins.

It also makes it easier for producers to get away with lacing their feed with drugs like clenbuterol, a steroid banned in meat production in both China and the United States but which experts say is still commonly used by Chinese producers to boost animal muscle mass.

"It (clenbuterol) is in such popular use at the grower level, and there are few ways that it can be found in the food chain by the government inspectors until it is too late," said Niemeier.

Other experts dismiss concerns athletes may fail drug tests if they eat meat raised on drug-laced feed.

"By the time it's ingested by the animal, by the time it's metabolised by the animal and then the same process goes through the digestion on the human side, it's pretty hard to accept that that would generate a positive test," said Bob McCormack, chief medical officer for the Canadian Olympic Team.

Aramark Corp., which provided food services for the Athens Games, has confirmed it is the official provider for Beijing, responsible for serving more than 3.5 million meals during the 60-day period of the Olympics and Paralympics.

An industry source in China said that Aramark had come under pressure from Beijing Olympic organisers to drop its initial choice of supplier, a foreign firm, in favour of domestic partners as a matter of pride for China.

The company said only that in choosing suppliers it was "very focused on the integrity of the food supply".

HANGING HOGS

In Beijing, confusion over designated suppliers abounds as organisers trip over themselves to assure Olympics food safety, without implying food for the general population is sub-par.

Global concerns over terrorism and the prospect of sabotaged Olympic food supplies have only compounded the secretive nature of China's bureaucracy and offer another reason for Games organisers to keep a tight lid on information about suppliers.

Last year Qianxihe Food Group said it would be the official pork supplier to Olympic athletes, raising drug-free pigs in secret locations. But Olympic organisers later denied any special pigs were being raised.

Anxious to allay food safety fears, China's Olympic organisers arranged a trip for journalists to major pork and chicken processing plants that serve the city's market.

But after demonstrating the production process -- giant hogs hanging from hooks, then eviscerated before circular saws went to work butchering the meat -- organisers admitted that these processing plants were not necessarily Olympic meat suppliers.

In the meantime, stung by the international outcry over the safety of its food and products, China is making strides in improving its regulatory environment.

New fishery production standards will tighten control over fish breeding, feed and drug use after the United States banned some shipments of farm-raised Chinese seafood last year over harmful residues.

And a draft food safety law under debate sets higher fines for errant firms and would require food packages to list ingredients. (Editing by Brian Rhoads and Jerry Norton)

reuters.com

How We'll Make a Fortune Exporting Pork to China

By Tom Dyson

Daily Wealth

July 30, 2008

"I eat sausage in the morning, a meat dish and a vegetable dish for lunch and the same for dinner. If there's no meat, I won't feel full."

That's from the mouth of 20-year-old college sophomore Guo Meng as she chows down at a local McDonald's.

"It was impossible for my parents' generation to have meat all the time," adds Xue Wei, a 42-year-old teacher. "Now we can eat meat every day."

Since 1980, per-capita meat consumption in China has nearly tripled. The price of pork has jumped more than 50% in one year, yet the butcher shops remain packed.

In fact, there's so much money to be made in the Chinese meat trade that 26-year-old Zhou Jian recently switched from selling car parts to pork – and is now making three times more money.

The Chinese eat more pork than the rest of the world combined. The country consumes seven times as much as the No. 2 consumer, the United States. And consumption is increasing. According to the USDA, Chinese pork consumption rose 22% between 2002 and 2006.

In 2007, a shortage of pork hit China. The earthquake, huge snowfalls, and an outbreak of swine disease have resulted in a 9% decline in Chinese pork production. Chinese pork prices rose 68% between April 2007 and April 2008.

The disease problem in China is going to get worse. Peasant farmers account for 70% of hog production in China. As peasant farmers move to the cities for manufacturing jobs, it's putting pressure on supplies. So the government is setting up factory farms like they use in the United States. But with China's polluted water and overcrowding in the hog sheds, disease will spread even more readily than it already does...

"I am very skeptical of these modern facilities that are being built today [in China]," says Nick Rosa, a Chinese hog-industry expert speaking at JPMorgan. "What typically happens in a hog farm, when they have a brand new facility, with the first cycle, the mortality rate is 5%. But then each progressive cycle as disease starts building up, it goes from 5%, 10%, 15%, 20%, and before you know it, you have a big problem, and that is what I am predicting is going to happen in China."

Meanwhile, there's a glut of pork in North America. The situation is so bad in Canada, the Canadian government is giving Canadian hog farmers money to kill their pigs.

The Canadian Pork Council is giving hog farmers C$225 for every breeding pig they "cull." The funds help farmers cover the costs of transport, euthanasia, and disposal. To qualify for the money, hog farmers must agree to "depopulate" an entire breeding barn and promise not to house more hogs in the same barn for three years.

As of two weeks ago, the Canadian Pork Council had received 500 applications.

In the U.S., hog prices are so low, farmers are killing their piglets and using them as compost.

I think there's a big opportunity for America and Canada to export pork to China. As one hog-industry observer put it, "The potential for further Chinese importation of pork is almost incomprehensible." Chinese pork imports are already up 311% from last year.

My favorite way of playing this is to buy American and Canadian meatpacking companies that do business with China... As China's shortage grows more severe and hog prices recover in the U.S., these firms will make fortunes.

Good investing,

Tom

Tom Dyson writes International Strategist

dailywealth.com