SOURCE: AgFeed Industries, Inc.

March 17, 2008 06:00 ET

AgFeed Industries Receives Hog Export License for the Hong Kong Market and AgFeed Experiences Higher Than Estimated Profit Margins From Hog Sales

Hog Prices in China Have Reached Historical Highs Due to Hog Shortage While the Cost of Hog Feed Remains Stable

SHANGHAI, CHINA--(Marketwire - March 17, 2008) - AgFeed Industries, Inc. (NASDAQ: FEED), a market leader in China's premix animal nutrition and hog raising industry, today announces that one of AgFeed's hog farms, the Wannian Xiandai hog farm, has been granted a direct export license by the Chinese Ministry of Commerce for hog export to the Hong Kong market.

Hong Kong is one of China's most prominent international cities. The export license allows AgFeed to directly supply hogs to the Hong Kong market. Hong Kong typically commands the highest quarantine standards during the hog production process as well as pays premium prices for hogs to those producers that have met stringent quality requirements.

Due to continued hog shortage in China, hog prices have recently reached historical highs. AgFeed is currently selling its hogs at approximately $250 per hog, which is higher than the Company's previously estimated $221 per hog.

AgFeed has also observed that the cost of corn, which is a major hog feed component, has remained stable despite rising hog prices. China's hog raising industry is an income tax exempt business.

Songyang Li, PhD., Chairman of AgFeed commented: "AgFeed's hog raising business benefits from a favorable market environment and expanded profit margins due to China's severe hog shortage. We anticipate China's hog shortage to continue throughout 2008. We are on track to complete our planned hog farm acquisitions by mid April towards our target of producing 400,000 hogs for sale in 2008."

About AgFeed Industries, Inc.

Through its China-based operating subsidiaries, NASDAQ-listed AgFeed Industries (www.agfeedinc.com) is a market leader in China's fast growing pre-mix animal feed and hog raising industries. The pre-mix market in which Agfeed operates is an approximately $1.6 billion segment of China's $40 billion per year animal feed market, according to the China Feed Industry Association. There are approximately 600 million hogs raised in China each year, compared to approximately 100 million in the U.S. Approximately 75% of China's total hog supply is from backyard individual hog farmers, while approximately 65% of China's total meat consumption is pork.

Safe Harbor Statement

All statements in this press release that are not historical are forward-looking statements made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. There can be no assurance that actual results will not differ from the company's expectations. AgFeed's actual results may differ from its projections. Further, preliminary results are subject to normal year-end adjustments. You are cautioned not to place undue reliance on any forward-looking statements in this press release as they reflect AgFeed's current expectations with respect to future events and are subject to risks and uncertainties that may cause actual results to differ materially from those contemplated. Potential risks and uncertainties include, but are not limited to, the risks described in AgFeed's filings with the Securities and Exchange Commission.

Contact Information

  • Contact Information:

    U.S. Contact:
    Mr. Arnold Staloff
    Independent Board Member
    AgFeed Industries, Inc.
    Tel: 212-631-3510

    Corporate Contact:
    Mr. Sam Zhou
    Corporate Development
    AgFeed Industries, Inc.
    Tel: 011-86-13925912908
    Email: info@agfeedinc.com