Tag - FEED

"As the standard of living in China rises and the middle class swells, one of the things that comes along is an increase in meat consumption," says small-cap growth stock specialist Tom Bishop, editor of the BI Research newsletter.

As a play on this long-term trend, the advisor has chosen AgFeed Industries, Inc. (Nasdaq:FEED) as the latest featured stock in his publication. AgFeed, he says, is a market leader in China's fast-growing premix animal feed and hog-raising industries.

The latter is particularly important, he says, as 65% of meat consumed in China is pork.

"Pork sales are four times greater than either beef or chicken, with annual per capita consumption at around 53 kg and rising," he says.

China produces about 600 million hogs annually, he says, accounting for 50% of worldwide pork production. This compares to about 100 million in the United States.

Pork is such an important part of the diet in China, that Bishop says "China actually has a strategic pork reserve as well as a strategic grain reserve." Further, he says that as an incentive to produce pork, China does not tax profits from this sector.

This small-cap company (with a market cap of $381 million) operates in the "premix" market. This market, he says, is an approximately $1.6 billion segment of China's total $40 billion dollar animal feed market.

Within this market the higher-tech, higher-margined premixes are growing at 14% to 15% per annum, Bishop says. According to the advisor, these markets have . . .