In the United States, pork might be "the other white meat," but in China, it's the only meat. Well, almost.

Far more than any other meat, pork occupies a special place in the Chinese diet and economy. Supporting a hog market estimated to be worth $32 billion annually, the Chinese consume more pork than any other nation. It is prepared in almost every conceivable way, from roasted whole suckling pigs, commonly served during holiday feasts, to sweet and sour pork, whose Americanized version is a Chinese restaurant staple. Pork accounts for two-thirds of the average Chinese's protein intake.

Last year, spiraling pork prices amid shortages tied to severe weather in southern China and an outbreak of "blue ear" disease — a form of swine flu that decimated up to 2 million pigs — left Chinese shoppers suffering from the same sticker shock as Americans filling up at the pump these days. Today, pork prices continue to rise as producers who are feeling the pinch of pricey feed and fuel pass along costs. As of this April, pork prices in China had increased a further 68% from the same time last year.

The vast majority of China's annual population of between 500 and 600 million hogs is raised on small farms. And with the nation's appetite for pork and pork products growing with consumers’ prosperity, producers are unable to meet demand. To fill the supply gap, China has sealed importation deals with U.S. pork and meat processing giant Smithfield Foods Inc. (NYSE:SFD) and its rival Tyson Foods (NYSE:TSN) to put American pork on Chinese tables.

Despite surging expenses that are plaguing companies in the sector, AgFeed Industries Inc. (Nasdaq:FEED), a leading pork producer and livestock feed grain maker, is setting the stage to bring home the bacon in the fast-growing market. AgFeed develops, manufactures, distributes and sells pre-mix feed and feed additives primarily for use in China's pork husbandry and slaughter market. It is also engaged in the raising, breeding and sale of hogs for the domestic pork production and hog-breeding markets. The company, which does business through a handful of subsidiaries, has production plants in Shanghai, Nanchang and Nanning, and operates more than two-dozen producing swine farms in China's southern provinces.

AgFeed has been making shrewd moves this year that are expanding its market share and raising its profile among market watchers. In January, it snapped up a 70% interest in both Wannian Xiandai Animal Husbandry Limited Liability Co. and Jiangxi Huyun Livestock Co., Ltd. It also acquired a 60% stake in Ganzhou Green Animal Husbandry Develop. Co., Ltd., a 55% interest in Yichun Tianpeng Domestic Livestock Farm, Ltd., and captured the entire herd and stock of Gang Feng Animal Husbandry Co., Ltd. It announced the acquisition of two commercial hog farms in China's Fujian province in May, and last month, the company also acquired a commercial hog farm that serves the lucrative Shanghai area, and gobbled up full ownership of Hainan Hopejia Feed Co., a move that the top brass say will immediately add to 2008 earnings.

Earlier this month, AgFeed executives, citing lower production costs and a strong balance sheet fueled by recent acquisitions, said they expect to report favorable financial results ahead of the Aug.14 reporting deadline. The company pointed to management's success in executing growth strategies and the smooth integration of recent hog farm purchases.

Wall Street also has a rosy outlook. Maxim Group late last month reiterated its "buy" rating and $26 target price on AgFeed shares, while boosting its fiscal 2008 revenue and EPS estimates to $132.8 million from $130.5 million and $1.02 from $1, respectively. The firm also upped its fiscal 2009 revenue forecast to $175.2 million from $169.2 million, with an EPS estimate of $1.40, bumped up from $1.35. Analyst Ping Luo with Global Hunter Securities, which kicked off coverage of AgFeed in March, maintains a "buy" rating.

Smart planning and a series of acquisitions have positioned AgFeed to hogtie an increasing share of China's pork market, which the U.S. Department of Agriculture estimates to be worth $32 billion per year. The pre-mix market in which Agfeed operates accounts for about $1.6 billion of China's $40 billion annual animal feed market, according to the China Feed Industry Association. And its recent acquisition of Hainan Hopejia Feed Co. makes the company the largest pre-mix feed manufacturer in Hainan, an island province that imports about 40% of meat hogs from the mainland.

The synergies created between its hog production and feed business should help AgFeed tap into an increased amount of market share through its expansion efforts in China's highly fragmented pork market. When all is said and done, this small cap could leave investors riding high on the hog.

FEED shares closed at $12.04 on Wednesday. Its 52-week trading range is $5.91 to $21.31. The Street's consensus one-year target is $22.