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I only used the reference to water, land, and air as an environmental metaphor, and was wondering if it limits production at some point.  I assume that the premise behind the Smithfield acquisition implies a very large production increase, maybe several times the current rate of production.  I would think that the price would naturally come down when ramping up to much higher production levels.  So, if the price falls as Chinese demand is supplied by rising production, I don’t see how price is going to be what limits Chinese demand.  Thus, the only limit to what we can supply is what the natural resources can sustain.  I have no idea if we would ever get to that limit.  I thought somebody might know.  I agree that a little farm smell is not going to be a showstopper.  But, as I understand it, Shangui is 33 times larger in production than Smithfield and Shanghui can’t meet demand.  I don’t know how short Shanghui is, but if you doubled Smithfield, it would only increase Shanghui production by about 6%.  Here is an interesting article that says many theories are being advanced to explain the Smithfield deal.  After exploring some of those theories, it concludes that the real reason for the deal is that the environmental pollution in China is so hampering food production that it is cheaper to buy foreign food producers than it is to clean up the pollution in China.  If that theory is true, then it shows that China has indeed reached the limits of its water, land, and air.  <a href="http://finance.fortune.cnn.com/2013/06/04/smithfield-china/">http://finance.fortune.cnn.com/2013/06/04/smithfield-china/</a> From the article: “The real story behind this transaction is that far-sighted Chinese entrepreneurs fully understand that, because pollution has contaminated major parts of China's food chain, their future profit opportunities lie in buying the entire food-production process abroad. Bagging Smithfield, in this sense, is not about getting its hogs, pork-processing technology, or even premium brand. It is really about owning access to America's safe farmland and clean water supplies. This strategic calculation is truly brilliant. Based on official Chinese data, more than two-thirds of its waterways are polluted. A sample study of farmland conducted in the late 1990s showed 10% contaminated with heavy metal. A three-year national survey of soil conditions completed in 2010 must have yielded such alarming data that the Ministry of Environmental Protection declared the data a "state secret." Given the fact that cleaning up land and waterways despoiled by heavy metal and other carcinogens requires huge amounts of money and takes a long time, buying food producers that own their land and have access to safe water supplies is a far more attractive proposition. If this analysis is correct, the Shuanghui purchase of Smithfield is a harbinger of things to come. Pressured by the catastrophic consequences of environmental degradation, Chinese food producers will have no choice but set their sights abroad. No doubt, this will present great business opportunities for many, but a rapid increase in Chinese acquisitions of food companies overseas will almost certainly create tensions between China and the rest of the world. Sadly, there are no good policies in place to address this challenge.”   Why would a rapid increase in Chinese acquisitions of food companies overseas create tensions between China and the rest of the world, as the article says will almost certainly be the case?  It is only a matter of free trade, free market, and free will transactions.
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