I'd rather they bought the pork and left the company as U.S. owned (keep the profits HERE!).
Semper Vaporo
Pkgs.
Semper VaporoI'd rather they bought the pork and left the company as U.S. owned (keep the profits HERE!).
"For the deal to move forward, Shuanghui International needs a regulatory go-ahead from Washington officials. A host of scandals has hit China’s poorly regulated food suppliers in recent years, and concerns have been raised about some of Shuanghui’s past practices. Chinese state media reported that pork from a Shuanghui subsidiary had been tainted by the chemical clenbuterol, which can make meat leaner but sickens humans. Shuanghui promised to destroy thousands of tons of its product to allay customer concerns."
--The Washington Post, May 30, 2013.
I just hope the government does what it has to do to keep our pork supply safe.
Grains and thing like peas are mixed into hog feed; but how much is grown locally and can be easily 'trucked' to to the 'farm'? I suspect that the hog operations are close to the processing plant.
Once the hogs are processed, this is an opportunity to ship them via rail. Refrigerated international containers make sense. Larger refrigerated domestic containers(53') might make more sense if the ship is a large 'freezer' and the hogs will need to be unloaded/loaded.
Most livestock growing and processing is quite regional, and there are lots of hog operations in the Midwest - I would not worry about lack of pork chops for Midwesterner's!
Smithfield's daily production capacity in 2010 was about 113,200 hogs/day. Tyson's capacity was 67,600 hogs/day, and Hormel's capacity was 37,000 hogs/day. The Hormel pants in Austin, MN and Fremont, NE.are in the Midwest. The top 5 producers(including Smithfield) produce 38% of the processed pork in the US. There are lots of other small operations that produce the other 62% of the processed pork.
Jim
Modeling BNSF and Milwaukee Road in SW Wisconsin
Semper Vaporo I'd rather they bought the pork and left the company as U.S. owned (keep the profits HERE!).
The only way I could see the profits staying here is if only citizens of the US were allowed to hold stock...
"I Often Dream of Trains"-From the Album of the Same Name by Robyn Hitchcock
greyhounds1) The Chinese put the pork on a ship at a west coast port. This would provide a westbound refrigerated load for rail movement and create an empty reefer container in California. That's an opportunity, not a problem. California produces almost half of the fresh fruits and vegetables in the US. This produce moves great distances to eastern population centers such as the New York area, Chicago, and in to eastern Canada. The railroads will have an opportunity to move reefer equipment both ways under revenue load.
Pardon me, but you cannot do that. It is simply NOT KOSHER to transport produce in the same car as Pork.
IIRC, ditto poultry and other meats. cross contamination, you know. Yes, steam clean them, we do that anyway, but still? FDA can be just as bad as the FRA.
ROAR
The Route of the Broadway Lion The Largest Subway Layout in North Dakota.
Here there be cats. LIONS with CAMERAS
So Kosher Products cant use the same trailers railroad cars as non kosher food? I post the question on ASK the RABBI and get back to you on this.
I don’t see why this should be a problem if the container is cleaned. Is there some reason why the container can’t be cleaned? The entire food processing industry requires cleanliness of equipment, and is successful at providing that cleanliness.
BroadwayLion It is simply NOT KOSHER to transport produce in the same car as Pork.
have a cheeseburger!!
Bonas So Kosher Products cant use the same trailers railroad cars as non kosher food? I post the question on ASK the RABBI and get back to you on this.
I doubt the Kosher hot dogs get separate trucks than the non-kosher ones. They share the same display case in a store - aren't the Kosher rules more about production?
It's been fun. But it isn't much fun anymore. Signing off for now.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.t fun any
BonasSo Kosher Products cant use the same trailers railroad cars as non kosher food? I post the question on ASK the RABBI and get back to you on this.
I, for one, will be waiting for the answer.
zugmannaren't the Kosher rules more about production?
Here is a listing of dietary law that explains things in more detail. Strict observers have two refrigerators in their house, one for meat, the other for dairy.
There is Kosher, and then there is Kosher (or Glatt Kosher if you prefer).
(stirring the pot.)
(And none of it has to do with rail cars, but at least I tried to start something.)
Uh, if the Chinese are buying the pork to ship home I don't think Kosher enters into the equation.
Uh, it's not the Chinese who would have concern for possible compromise to dietary law.
I'm not Jewish and all I really know is what I just read in your link.
However, the information on cleaning is not at all clear. Food preparation items becomes meat or milk accordingly as they are used to prepare these foods. For example, in the instructions, a towel that is used to dry dishes milk products are served in can simply be washed. It can then be used to dry meat dishes. Washing the towel between uses is the key here.
But pork or pork products would never ever enter an observant Jewish household. To make an item kosher after it has been used with pork is inconceivable.
So what does kosher have to do with a back haul of fruits or vegetables in a container that hauled pork?
Why should this business model need to include kosher food?
For some religions, there are dietary LAWS that must be followed to be sure the food is acceptable for their consumption. It is usually associated with the Jewish term Kosher, but Muslim and other religions also have such restrictions. It would be included in the business model if the business wants to not lose a contract due to failing to follow the practice.
I am not Jewish (nor of any religion that has a strict dietary laws to obey), but "my" understanding is that although you could perform a "hygienic" cleansing of the container, it would also require a ritual religious "cleansing" by a Levitical Priest (or religious leader of whatever religion is claiming that the food item is going to be acceptable) and possibly a waiting period (such as until sundown) before the container could be used again.
If any food item is to be considered acceptable (Kosher) then ALL the ingredients must be Kosher and prepared according to the dietary law being in effect. For example, a cake might be prepared according to Kosher rules, but if the food coloring is from shellfish then the cake can no longer be considered Kosher.
There are some disagreements amongst the various sects of the various religions as to what constitutes "acceptable" and it can become a quagmire to wade through. But the business model may need to take some base level into account.
BroadwayLionIt is simply NOT KOSHER to transport produce in the same car as Pork.
I'm sure he didn't mean Kosher Kosher, he was using the old expression that something is simply against the rules. This time being government food handling rules.
Now to the point I wanted to get to before this on again off again thread business started. I am not at all sure that the Chinese are any longer capable of pulling something like this off. If you recall about a month or so ago, the stock markets took a one day hit when some agency in China reported estimates of Chinese manufacturing potential for 2013 came in 2/10's of a percent lower than analysts expectations.
Immediately the media asked another analyst for his explanation for the hit. This fellow said that the much vaunted rise in entrepreneurism in China is coming to a sudden halt. The Chinese government does not like what they can't control, and they have begun to insert government functionaries and apparatchiks into the senior management and boards of directors of private companies started by entrepreneurs in the late 1990's and early 2000's.
So, while buying a pork producing factory seems easy enough, the new improved Chinese management system is going to want to have control over the shipping of the pork from the factory to China. Now since buying a Class I railroad is off the table, I suspect that China will insist on using trucks to get the product to port, and Chinese owned interstate trucking companies are bound to raise regulatory eyebrows.
Unless there is yet another change in Chinese business management philosophy I just don't see this deal ever getting off the ground.
Bruce
So shovel the coal, let this rattler roll.
"A Train is a Place Going Somewhere" CP Rail Public Timetable
"O. S. Irricana"
. . . __ . ______
Firelock76 Uh, if the Chinese are buying the pork to ship home I don't think Kosher enters into the equation.
Except that reusing the cars to transport other food back east may violate Kosher rules. You cannot have meat and dairy in the same equipment. But a cursory Google seems to indicate that this applies in pots and in kitchens, but not in rail cars.
A salmon may eat a shrimp, and the salmon will still be kosher.
Before hiring out on the railroad, I worked at IBP (Pork plant at Perry, IA, now Tyson) for a few years. Before a trailer or container was loaded with meat it gets washed out at the plant. IBP contracted out the hostling of trailers between the drop area and load out doors. The contractor who did this also took care of making sure the trailers were clean and ready to load.
When I worked at Perry they had 2 shifts. The day shift production was all export for Japan. The night shift was IBP product for domestic markets. All the meat for export was cut into the desired pieces and shipped out boxed, most in sealed plastic wrap inside the boxes. There was some product that was wrapped in paper, but I think that was only some of the larger cuts for domestic consumption. The only thing items that weren't shipped that way were items (such as trimmings, pork bellies, hams etc) that were going to other plants for further processing. The boxed items, which is most likely how any export product is going to go, will be less subject to being contaminated by a previous load. I doubt they will be shipping sides of meat hanging from rails in the trailer/container. I wonder if anyone still does it that way. Besides, if a trailer or container isn't clean or hasn't been washed out, they simply won't load it.
When I worked there, the export product went out in K-Line containers. I don't know if they went to a railhead or direct to the west coast by highway. The Japanese company that IBP dealt with had a presence at the plant. They bought the hogs and specified how they wanted them processed. When running the Japanese product, IBP couldn't work their own product. That's why they had the second shift. When I left there, the Japanese were in the process of having the plant modified to run one shift, but keep the same daily production numbers (about 3000 head) and all of it would be for export. The plant is still open under Tyson and I assume still producing only for the export market.
Jeff
AgentKidI am not at all sure that the Chinese are any longer capable of pulling something like this off
Well, they are and they have. They have built from the ground up new grain elevators here in North Dakota. They buy grain directly from the farmers, cutting out ADM et.al. They transport it west by rail, and put it on ships bound for Japan and China.
I am certain that the government (there) does not mean to control enterprises in the USA as directly as they do in China, the really do not give a pig's tail about control of the bottom, it is the top that they want to keep under control.
Another issue is that 1) they still have to feed more people than they can grow for; 2) the populations have been shifting to the cities to cash in on the growth, and btw produce less food; and 3) China is trying to move factories and good jobs out into the hinterlands so that people will be able to remain out there.
China would make a good fit with the USA if it were not for the politics of both. But the Chinese do hold US money, and that is easier to spend in the USA than it is in China. And for all we hear about how much of USA China actually holds, it is a very small fraction of the US debt, most US debt is held by US citizens.
I don't understand why kosher has to be a showstopper here. We are only talking about the backhaul empties from the pork shipment. Can't they be filled with non-kosher food for the backhaul?
And why would China want to buy a pork plant in the U.S.? What would be the financial incentive for them to own the U.S. based plant? Why don't they just buy the pork and not own the plant?
BucyrusAnd why would China want to buy a pork plant in the U.S.? What would be the financial incentive for them to own the U.S. based plant?
Same as I mentioned about the grain elevator above. They get to buy directly from the farmer rather then from Archer Daniels Midland et. al. Cut them guys out and you save a ton of money. Besides they *have* US dollars, and these are easier to spend here than in China.
It is called "Vertical Integration"... you buy the processing plant and you don't have to pay the stock holders any profits, you keep them. Eliminate the middle man and his profits and you reap the benefits.
For me, I do not want foreign ownership of American business/employment. Whether it is stockholders or private ownership, I want the profits to stay here. Of course, I should be just as concerned about American investment in foreign countries... but ... well... ummm.... ... ...
As for back-hauling 'non-Kosher'... to the non-Jewish/non-Muslim/etc. it seems to be a non-issue, but I would ask you if you would mind buying milk from a company that used the same tank trucks to back-haul sewage... hey you can steam clean it and it may be germ free, but the "idea" is somehow objectionable to many people... we tend to want some intermediary step to move the disgusting part a couple of steps away through some "natural" process and "time". Regardless, to those of certain religions, there is a REQUIREMENT that must be met and that settles the argument.
BucyrusAnd why would China want to buy a pork plant in the U.S.? What would be the financial incentive for them to own the U.S. based plant? Why don't they just buy the pork and not own the plant?
It does strike me, Bucyrus, that the Chinese may not have a lot of interest in shipping any more pork to China than we currently export. After all, raising pigs is not unknown to the Chinese. They have been raising their own pigs since before we were a country.
Right now the Smithfield Company has a hugh market for pork and pork products in the US. To abandon that market and its profits makes no sense. It certainly is possible that this Chinese company is simply looking for a place to invest its capital and in an uncertain world diversification makes sense.
So this whole transaction, if it goes through, may not have any new implications for either rail or truck transportation. To the extent that the Smithfield Company uses railroads and trucks now that will continue. To the extent that the Smithfield Company exports pork and pork products that will continue. But there will be no real change other than the natural growth of the business.
John
There are cars stenciled Kosher approved, I just saw a food service tank car last day or so stenciled as such, and here is a link to a company that washes and makes a tank car kosher approved…
http://www.tankcarcleaning.com/services/tankcarcleaning.html
More specifically see
http://oukosher.org/kosher/displaycertified
I have also seen a tank car for tallow use stenciled “Not for Kosher Use” although I can’t remember which of the big shippers it was leased to, it did specify beef tallow only.
Where there is a market….!
23 17 46 11
Semper VaporoAs for back-hauling 'non-Kosher'... to the non-Jewish/non-Muslim/etc. it seems to be a non-issue, but I would ask you if you would mind buying milk from a company that used the same tank trucks to back-haul sewage... hey you can steam clean it and it may be germ free, but the "idea" is somehow objectionable to many people... we tend to want some intermediary step to move the disgusting part a couple of steps away through some "natural" process and "time". Regardless, to those of certain religions, there is a REQUIREMENT that must be met and that settles the argument.
I understand what you are saying. If I believed a product was not clean I would not buy it or eat it. Likewise if I had a religeous requirement to not eat a certain food, I would not eat it. But if I had food to ship and my shipping did not meet the requirements of certain people, I would find other people to ship for.
In addition to being the largest pork processor, Smithfield is also one of the largest hog producers. An article in the paper a couple days ago when the story broke asked some agricultural experts if this was good news for Iowa hog producers. While mostly noncommittal, kind of a wait and see attitude, one did mention about Smithfield's hog operations. It was mentioned that China restricts pork imports because of a feed additive that's commonly used in the US. Smithfield has been moving away from using the additive. This expert thought because of Smithfield being able to supply most of the hogs they process, it wouldn't mean as much to the independent producer.
It kind of lets the Chinese say they are importing more American pork while still being in control from farm to market.
This whole Kosher thing is a non issue.
It's not as if a trailer that hauls a load of pork is forever banned from hauling a load of cheese. When I started with the railroad we still hauled TOFC meat. We had Rabbis on call to keep the meat Kosher. If needed, we'd call the Rabbi and he would come out and perform the needed actions.
I'm sure the same thing could be done with a rail container that hauled a load of pork to the west coast. Clean it out and call a Rabbi.
I do not think too many produce receivers would be concerned about previous loads in the container. As long as it was hygienically clean when loaded with their product. But if a receiver was so concerned, I'm sure a solution could be found.
Careful with the discussion of rabbis and don't swing into any religious discussion. It's easy to do.
Dr. Frankendiesel aka Scott Running BearSpace Mouse for president!15 year veteran fire fighterCollector of Apple //e'sRunning Bear EnterprisesHistory Channel Club life member.beatus homo qui invenit sapientiam
Semper Vaporo As for back-hauling 'non-Kosher'... to the non-Jewish/non-Muslim/etc. it seems to be a non-issue, but I would ask you if you would mind buying milk from a company that used the same tank trucks to back-haul sewage... hey you can steam clean it and it may be germ free, but the "idea" is somehow objectionable to many people... we tend to want some intermediary step to move the disgusting part a couple of steps away through some "natural" process and "time". Regardless, to those of certain religions, there is a REQUIREMENT that must be met and that settles the argument.
That is certainly a valid point. I used to work with a person who was a devout Muslim. There were no Muslim stores around so he bought his meat from a kosher butcher.
Bucyrus I don't understand why kosher has to be a showstopper here. We are only talking about the backhaul empties from the pork shipment. Can't they be filled with non-kosher food for the backhaul? And why would China want to buy a pork plant in the U.S.? What would be the financial incentive for them to own the U.S. based plant? Why don't they just buy the pork and not own the plant?
Smithville has been exporting to a Chinese distributor for many many years, as has Tyson Foods with it chicken.
Smithville offered itself for sale in a several billion dollar deal, the Chinese took it.
edblysard Smithville has been exporting to a Chinese distributor for many many years, as has Tyson Foods with it chicken. Smithville offered itself for sale in a several billion dollar deal, the Chinese took it.
Ed,
You sum it up well. And, at this time, I see no reason to believe that if the sale goes through these things will change. Of course over time all things change. However, my skills do not include clairvoyance and I would not be inclined to predict what or when the changes may be.
I understand that the Chinese market for pork is undersupplied, so the acquisition of Smithfield would help offset the supply shortfall in China. I don’t know how the Chinese pork undersupply compares with the Smithfield production capability.
If the deal is finalized, would Smithfield’s entire production go to China, or would Smithfield simply expand to serve both the U.S. and Chinese markets?
China and Chinese companies have a lot of cash looking to be invested. seems to me someone there thought Smithfield was a good investment. Whether the production is exported or stays here is irrelevant. If Warren Buffet or D. Trump bought Smithfield, would there be so many questions raised?
C&NW, CA&E, MILW, CGW and IC fan
As a Rabbinical student in an Orthodox Yeshiva, I simply wish to point out that any food container, regardless of what it has been previously used for, can be made Kosher by thorough cleaning under the supervision of a qualified Rabbi. Not any Rabbi, but one that has been qualified by a Beit Din ("house of rules") of three already qualified Rabbis. The Hebrew term for such a Rabbi is "Mashgiyah." He is the one who supervises the kitchen, by regular inspections, of Kosher restaurants, growers, wine producers, wisky makers, etc. Any tank-car or freight car or container loading location can in the USA can probably locate such a Rabbi within a one or two-hour drive. The profession of being a Mashgiyah is as specialized as the profession of being a "Moel," a Rabbi who does circumcisions, with detailed rules. So any frieght car that can be cleaned thoroughly can be made Kosher, regardless of previous history of lading.
And yes, a plate or fork that can be cleaned thoroughly (and this excludes certain types of ceramics, and of course paper) that had contact with pork can be made Kosher by thorough cleaniing. Some ultra-Orthodox might still not accept it if they knew, however. My Yeshiva is not Ultra-Orthodox, although we have one teacher who teaches their point of view. I won't fail to ask him that question.
Ihit.just ranslated the question of Kosher food in freight cars and my answer to two of our really top students, and continued with your little green-men story. It was a 100% hit. Todah Rabbah, thanks a lot.
And I larned that Alien in Hebrew is Alien, when refering to men from space, Mars or any more distant location.
schlimm China and Chinese companies have a lot of cash looking to be invested. seems to me someone there thought Smithfield was a good investment. Whether the production is exported or stays here is irrelevant.
China and Chinese companies have a lot of cash looking to be invested. seems to me someone there thought Smithfield was a good investment. Whether the production is exported or stays here is irrelevant.
I don’t think it is an irrelevant question to ask whether production stays here or is exported. When I read about pork production in China, it sounds like they are facing a major problem in meeting their domestic demand. So having extra cash to look for foreign investment is one thing, but it sounds like this deal is as much about seeking to increase the pork supply in China as it is to find a place to invest their money.
So assuming that Smithfield’s market is suddenly doubled or tripled to meet underserved demand in China, will Smithfield expand accordingly to serve it, or will they simply redirect their existing production? If they increase their production, that increases the net transportation need. That too might affect rail in a way that differs from simply redirecting existing production to serve the Chinese market.
daveklepper As a Rabbinical student in an Orthodox Yeshiva, I simply wish to point out that any food container, regardless of what it has been previously used for, can be made Kosher by thorough cleaning under the supervision of a qualified Rabbi. Not any Rabbi, but one that has been qualified by a Beit Din ("house of rules") of three already qualified Rabbis. The Hebrew term for such a Rabbi is "Mashgiyah." He is the one who supervises the kitchen, by regular inspections, of Kosher restaurants, growers, wine producers, wisky makers, etc. Any tank-car or freight car or container loading location can in the USA can probably locate such a Rabbi within a one or two-hour drive. The profession of being a Mashgiyah is as specialized as the profession of being a "Moel," a Rabbi who does circumcisions, with detailed rules. So any frieght car that can be cleaned thoroughly can be made Kosher, regardless of previous history of lading. And yes, a plate or fork that can be cleaned thoroughly (and this excludes certain types of ceramics, and of course paper) that had contact with pork can be made Kosher by thorough cleaniing. Some ultra-Orthodox might still not accept it if they knew, however. My Yeshiva is not Ultra-Orthodox, although we have one teacher who teaches their point of view. I won't fail to ask him that question.
Thank You!
Bucyrus I understand that the Chinese market for pork is undersupplied, so the acquisition of Smithfield would help offset the supply shortfall in China. I don’t know how the Chinese pork undersupply compares with the Smithfield production capability. If the deal is finalized, would Smithfield’s entire production go to China, or would Smithfield simply expand to serve both the U.S. and Chinese markets?
Smithfield is saying the deal will open up new export opportunities.
"Smithfield said the deal isn't about importing Chinese pork into the U.S. Instead, the company says it's a chance to export into new markets with its brands, such as Smithfield, Armour and Farmland.
Larry Pope, Smithfield's CEO, said in a conference call on Wednesday that the transaction "preserves the same old Smithfield, only with more opportunities and new markets and new frontiers."
'People have this belief ... that everything in America is made in China,' he said. 'Open your refrigerator door, look inside. Nothing in there is made in China because American agriculture is the most competitive and efficient in the world.'"
http://siouxcityjournal.com/business/china-s-shuanghui-in-b-deal-for-smithfield/article_b382e669-6eac-5a8e-a7c6-fdab179a4de2.html
Well, new export opportunities for pork can translate into more opportunities for railroad business.
US domestic demand for pork won't go down because pork exports increase. What should happen is an increase in US (and Canadian) pork production to meet the increased demand. That will be good for a whole lot of people from railroaders, to John Deere assembly line workers, to hog producers, to real estate agents and so on and so on.
Some observers cited in newspaper articles do fear that domestic consumers could end up paying more for pork because more of Smithfield's production going to China. Others expect Smithfield to expand production to meet expanded demand.
The impression I get is that the some Chinese businessmen want to bring more pork to China. Instead of buying the end product, they were able to buy the means of production. This allows them a better control of the supply and costs, and make a buck doing it. It may not help (nor hurt) the average American hog producer or pork consumer, but it helps out the Chinese businessmen who bought the company and the American businessmen who sold the company. If both parties to the sale are satisfied with the outcome, isn't that what unfettered capitalism is all about?
Regarding this quote from the link:
“Smithfield said the deal isn't about importing Chinese pork into the U.S. Instead, the company says it's a chance to export into new markets with its brands, such as Smithfield, Armour and Farmland.”
I do understand that the deal isn’t about importing Chinese pork into the U.S. But why does the deal create a chance to export into new markets that is greater than the chance that currently exists? Will the purchase of Smithfield by China cause the price of Smithfield’s product to drop, thereby opening new markets due to the lowered price?
Bucyrus Regarding this quote from the link: “Smithfield said the deal isn't about importing Chinese pork into the U.S. Instead, the company says it's a chance to export into new markets with its brands, such as Smithfield, Armour and Farmland.” I do understand that the deal isn’t about importing Chinese pork into the U.S. But why does the deal create a chance to export into new markets that is greater than the chance that currently exists? Will the purchase of Smithfield by China cause the price of Smithfield’s product to drop, thereby opening new markets due to the lowered price?
It means that they will export pork AND profits.
If I had known this was a change to the financial arrangements of an existing operation I would not have posted such a negative opinion of it earlier. My comments were more directed toward the increasing unlikelihood of such events in the future. If the basics of this operation are already in place, then I think Greyhounds is onto a good plan.
AgentKidedblysard Smithville has been exporting to a Chinese distributor for many many years, as has Tyson Foods with it chicken. Smithville offered itself for sale in a several billion dollar deal, the Chinese took it. If I had known this was a change to the financial arrangements of an existing operation I would not have posted such a negative opinion of it earlier. If the basics of this operation are already in place, then I think Greyhounds is onto a good plan. [my empahsis in blue]
If I had known this was a change to the financial arrangements of an existing operation I would not have posted such a negative opinion of it earlier.
If the basics of this operation are already in place, then I think Greyhounds is onto a good plan.
[my empahsis in blue]
Changing the financial arrangement in this case, changes the existing operation. Smithfield selling product to China is a lot different than a Chinese pork producer buying Smithfield. This has the potential to have a major effect on branding. I am speaking strictly in terms of business.
Opening up new markets, especially the further you get from where you are, is not easy. You need places to position your product, get it known to wholesalers & retailers, set up supply and distribtion chains, etc.
Finding a new supply of product for your market, especially the further you get from where you are, is not easy. You need to find enough production capacity, the right product, the right price and the right availability.
In this scenario, a company looking to find more supply for its existing & future market found a company looking for markets for its existing and future supply. The "created chance" is putting these two together. The theory of any integrated production/distribution/sales system is that you can control the variables better for your costs and service. (The word for that is "logistics" and the most obvious example of it is "Wal-Mart".) There are other ways for each to obtain what they wanted (sales/marketing agreements, lots & lots of salesmanship, etc.) but this particular deal was what worked for these particular parties involved in this particular situation.
According to Bloomberg Business Weekly, existing branding will remain, as will production facilities and methods, management will also remain in place.
The reason for the purchase was to lock in a supplier for the Chinese distributor, and it raised capitol for Smithville.
Bloomberg lists it as a win all the way around.
Kevin C. Smith Opening up new markets, especially the further you get from where you are, is not easy. You need places to position your product, get it known to wholesalers & retailers, set up supply and distribtion chains, etc. Finding a new supply of product for your market, especially the further you get from where you are, is not easy. You need to find enough production capacity, the right product, the right price and the right availability. In this scenario, a company looking to find more supply for its existing & future market found a company looking for markets for its existing and future supply. The "created chance" is putting these two together. The theory of any integrated production/distribution/sales system is that you can control the variables better for your costs and service. (The word for that is "logistics" and the most obvious example of it is "Wal-Mart".) There are other ways for each to obtain what they wanted (sales/marketing agreements, lots & lots of salesmanship, etc.) but this particular deal was what worked for these particular parties involved in this particular situation.
Another big THANK YOU! I could not have said it this well myself.
jeffhergertSome observers cited in newspaper articles do fear that domestic consumers could end up paying more for pork because more of Smithfield's production going to China. Others expect Smithfield to expand production to meet expanded demand.
If a greater proportion of US pork went to China and the supply to the US were reduced I would expect that someone would began raising more pork for US consumption. There could be a short term price rise but over time I think it would even out. In a day when the US has a balance of trade problem I would think that selling more of anything to China would tend to benefit our economy.
I suppose the more we produce the more we must transport and that has implications for railroads. But it seems to me the railroad issue is relatively small here.
daveklepper Ihit.just ranslated the question of Kosher food in freight cars and my answer to two of our really top students, and continued with your little green-men story. It was a 100% hit. Todah Rabbah, thanks a lot. And I larned that Alien in Hebrew is Alien, when refering to men from space, Mars or any more distant location.
You're welcome Dave, I'm glad you and your friends enjoyed the joke but someone must have taken exception to it because it's GONE! Can't imagine why, it was a Jewish comedian, Soupy Sales as a matter of fact, who came up with it.
I'm amazed the word for "alien" in Hebrew is "alien." I'm assuming it's a borrowed word.
Wayne
I see no problem with the shipping model explained by Greyhounds. I think that would work to the benefit of U.S. shippers as long as the net export of pork to China is increased by this deal.
When I speak of branding, I am referring to the effects on the brands of Smithfield and Shuanghui induced by each other, on each other. I am not referring to the brand name per se, but rather the intangible brand capital. I believe that is what is so new and different about this acquisition.
The two brands may remain separate in actual practice, but in terns of brand capital, they will be linked by the ownership of Smithfield by Shuanghui, so they will probably merge and affect each other. I would speculate that there will be a big difference between the two brands independently when viewed by the U.S. market. So putting the two together will result in a brand far different than the Smithfield brand.
It is just my opinion, but if this deal is approved, I expect Smithfield to cease selling to the U.S. market, and export all of its pork production to China and perhaps other foreign countries.
The price here most likely will either remain as is or drop, as Smithville hinted in the article that US domestic pork production will likely have to increase.
For all of its industrial progress, agriculture in China, as in Japan too, remains almost completely a manual labor business, what we view as modern techniques, such as grain harvesters and combines simply aren’t there, even with the state sponsored co-ops, most domestic production of food stuff in China is from family farms and mom and pop operations.
I will try and find the magazine, (it’s at work on the break table, so it may be long gone) but the article mentioned that China imports something like 40% of its food…the Chinese domestic agriculture industry has suffered as many people from rural areas that were producing food stuff have moved to cities looking for better paying industrial and manufacturing jobs.
Sounds familiar, huh!
Trust me, while I am not involved in the production end, I am involved in the first stage delivery part, you would be astounded by how much food in the form of grain America sells, and often gives away overseas.
We have a dedicated train of solid boxcars full of bagged rice, corn, wheat, and lentil that runs twice a day, averages 50 plus boxcars, to an exporter for shipment overseas.
Never kid yourself; if the American farmer/rancher were allowed to control the domestic and export market instead of the government using our produce as a trading tool, we could feed the world cheaper than they could feed themselves, with enough left over to half your grocery bill!
Lee Iacocca pointed out in one of his books that the average rice farmer in Texas could grow, harvest, and package then deliver more nutritious rice to Japan at less than half the retail cost to the Japanese populace compared to Japan’s domestically produced rice simply because Japan’s domestic rice production is protected by a trade restriction on imported rice, which benefits the domestic growers, who are also small mom and pop farmers that rely on manual labor, hand planting and harvesting, to grow their rice.
Sounds funny, but we here in America pay less for rice than the Japanese, even though per person we consume less of it.
From what I read, someone in China had a basic capitalist light bulb moment…buy in volume at a wholesale price and sell in volume at a retail price without having to produce the basic product themselves.
Wal-Mart’s concept flipped, go figure.
Firelock76 daveklepper Ihit.just ranslated the question of Kosher food in freight cars and my answer to two of our really top students, and continued with your little green-men story. It was a 100% hit. Todah Rabbah, thanks a lot. And I larned that Alien in Hebrew is Alien, when refering to men from space, Mars or any more distant location. You're welcome Dave, I'm glad you and your friends enjoyed the joke but someone must have taken exception to it because it's GONE! Can't imagine why, it was a Jewish comedian, Soupy Sales as a matter of fact, who came up with it. I'm amazed the word for "alien" in Hebrew is "alien." I'm assuming it's a borrowed word. Wayne
No, I did not succeed in learning much more than how to pronouce words written in the Cyrillic alphabet; when I got to the declension of nouns I gave it up.
Johnny
Hi Johnny! Oh certainly, I'm aware many languages use borrowed words when none of their own seem to work, such as in Japan "Rush Hour" for commuters is called "rushawa", "baseball" is "basuboru", and so on.
Juniatha turned me on to a German steam fan website called "Dampf-Freak", so apparantly the Germans don't have a word for "freak", as in extreme fan, that quite fits. I can't do much with the "Dampf-Freak" site except look at the pictures, my high school/ war movie German isn't quite up to the task!
The only exception I'm aware of is the French who'll twist their own language into knots to avoid using a word from anyone elses.
Wouldn't it be more cost effective to ship the grain to China, and do the hog raising and pork processing there? We have a Smithfield owned pland here in town- John Morrell. About 20-25 years ago, the union meatcutters were making about $18 an hour. After some "labor unrest", the company basically got rid of the union. Starting wage now is in the $10 an hour range. Wouldn't $10 an hour be off the chart for a packing plant worker in China? There was discussion of how the hog business in this county is so efficient because it's run like a well oiled machine in a factory. Doesn't China have a lot of factory experience?
Thanks to Chris / CopCarSS for my avatar.
Murphy,
It isn’t just the processing/packing part; it’s the raising to market weight part in the volume required. China has a really hard time of this.
And oddly, it is cheaper to raise, slaughter, process, package then ship it from here to there, we are that efficient at it.
They want more Sweet & Sour Pork and Pork fly lice!!
8 N' Sand
Murphy Siding Wouldn't it be more cost effective to ship the grain to China, and do the hog raising and pork processing there? We have a Smithfield owned pland here in town- John Morrell. About 20-25 years ago, the union meatcutters were making about $18 an hour. After some "labor unrest", the company basically got rid of the union. Starting wage now is in the $10 an hour range. Wouldn't $10 an hour be off the chart for a packing plant worker in China? There was discussion of how the hog business in this county is so efficient because it's run like a well oiled machine in a factory. Doesn't China have a lot of factory experience?
For the time being, China’s weak link in pork production does seem to be the agricultural sector, while their manufacturing sector is more cost effective than ours with many products. But I don’t see any reason why they cannot bring their ag sector up to the same level of competitiveness as ours, given some time. Their only limitation is that they can’t keep up with their tremendous economic growth.
Moderator: What possible objectionn was there to the little green men story?
Would you ban Gulliver's Travels as something related to Englishmen?
Or Robinson Cruso. How about the Gilbert and Sullivan "Duke of Plaza Toro" anti-Spanish?
or "The Mikado"
Please restore it, its worth its chuckles.
thanks!
If this whole thing comes to fruitition as Greyhounds has broken it down, it may not only open up several opportunities on the intermodal front but I also can't help but wonder if it just may open up an opportunity for the railroads to move these hogs to slaughter to the North Carolina facility.
If China stops raising pigs, that should end the flu as we know it.
Speaking only in terms of business and marketing:
*
So, if China has the competitive advantage in almost everything, why do they want to buy a U.S. pork producer? Why not just buy the pork? They have the money for the pork. Why do they need a U.S. pork producer? Well one reason could be that they have the competitive advantage in pork production, and they plan to become the world’s biggest pork exporter just like they export everything else. The only problem is that their food production has a black eye. Their poor quality is legendary, and food is personal. Would you eat pork imported from Shuanghui in China? That is the only obstacle to China being the biggest pork producer/exporter.
So, what they are buying is not a new source of pork. What they are buying is the Smithfield brand. I am referring to the brand reputation, and not just the name and logo. Once, they buy Smithfield, the company will be a Chinese pork supplier, except it just won’t be based in China. But even though the company will be the same U.S. pork producer as it was under Smithfield, I suspect it will be stigmatized to a large extent in the eyes of the U.S. market.
It will be very similar to the stigma of shipping kosher food in a container that once shipped pork, as was previously brought up here. Nevertheless, some portion of the U.S. pork market will be retained. And the rest of that market will probably return once it gets used to the idea of a Chinese pork producer that is in the U.S., and seems to not be causing any health problems.
But pretty soon, there will be pork going in both directions as the stigma against Chinese pork dissipates. That then opens the door to China becoming the world’s largest pork exporter with most of the pork being produced in China with their competitive advantage.
As it stands now, China cannot open that door to being the world’s largest animal protein provider because their food production reputation stands in the way. Acquiring a company with a good reputation helps China repair their reputation. This may indeed by a win, win— for a while.
Bucyrus,
I think you are close but suggest that what the purchaser is buying in addition to a more secure supply is expertise that they can use to modernize their own production processes.
I doubt that "the public" will stay away from Smithfield products because they are Chinese owned. Six months after the deal is over and out of the news I suspect less than 5% of the population will remember Chinese ownership, and that less than 5% of that 5% would tell you two Smithfield brands other than Smithfield.
To the extent that more pork goes to China as a result of this deal than would otherwise have been the case, pork prices should edge up a bit. That should coax more production out of the industry which will tend to depress prices. On balance I expect no price impact as most likely result, with very modest price increase the other reasonably likely result. Either will probably be swamped by routine volatility and our idiot ethanol policy.
Mac
daveklepperAs a Rabbinical student in an Orthodox Yeshiva, I simply wish to point out that any food container, regardless of what it has been previously used for, can be made Kosher by thorough cleaning under the supervision of a qualified Rabbi.
Dave,
Like Greyhounds, I too appreciate your explanation of how items used in food handling may be made Kosher. But I am a little confused and I hope you will take a follow up question.
In a previous post the point was make that a Kosher household must have two separate dishpans, one for meat dishes and one for milk dishes as well as two separate sets of cookware for cooking meat and milk dishes. Yet when it comes to commercial situations, it seems one set of implements and containers will do and this is true even when switching from pork to kosher products. As I understand it, a refrigerator car may be used to ship pig carcasses, throughly cleaned under the supervision of a qualified Rabbi, and then used to ship Kosher beef.
So why can't a housewife simply wash her meat dishes, throughly clean her dishpan and then use it for her milk dishes? Or am I missing something?
China, like the former Soviet Union has a basic infrastructure problem in agriculture. The farmers do not own the land. They do not own the means of production. Where is the profit for the farmer.
In the USA, Ag is big business with small people (for the most part). The farmer owns his land, he owns his machines, he must borrow the money to grow the crops, and he gets paid once a year.
In China the State owns the land, the machines, and to some extent the farmers them selves. There is little incentive to produce, and things are awkward to say the least. People leave the rural areas for the cities where they can find jobs, not at all unlike the USA in the '30s. But in the USA, those who as remained on the farms owned the land and the equipment. We do have farm subsidies and that is a mixed blessing/curse, but if the farmers make money, and the people in the cities can afford to eat, then I suppose that it is working. Is it working in China? That is yet to be seen.
In the meanwhile, China holds many US Dollars, and there is no better place to use them than in the US. The Japanese got stung big time playing that game. Maybe China can do it better, maybe they cannot, but China is in many ways a perfect fit with the US economy.
So put that on your train and run it out to the west coast.
Murphy Siding Wouldn't it be more cost effective to ship the grain to China, and do the hog raising and pork processing there?
Wouldn't it be more cost effective to ship the grain to China, and do the hog raising and pork processing there?
To take that course of action may drive up your total costs. The reason is something called the feed conversion ratio of animals raised for food. It is an expression of how many pounds of feed are required to obtain a pound of gain in animal weight. Obviously, the ratio varies with the quality of the feed, but as a generalization it is around 3 to 1 for corn fed pork. Moreover, that is measuring the total weight gain of the animal, not the chops, roasts or belly portions that are most in demand.
Some offset of that disadvantage occurs in the corn shipment requiring much less stringent shipping methods, but the history of the packing industry in the past half century has been one of moving the plants closer to the producer. That logic applies to raising the animal close to the source of the feed.
That all started changing over 30 years ago. The first beneficiaries of moving to a mixed economy under Deng Xiao Ping were the farmers, who have long-term land use rights (30 year) and decide what to grow. They also can sub-lease land out to developers or large-scale farming groups for profit One look at the new houses they built and you'd understand.
Dakguy201 Murphy Siding Wouldn't it be more cost effective to ship the grain to China, and do the hog raising and pork processing there? To take that course of action may drive up your total costs. The reason is something called the feed conversion ratio of animals raised for food. It is an expression of how many pounds of feed are required to obtain a pound of gain in animal weight. Obviously, the ratio varies with the quality of the feed, but as a generalization it is around 3 to 1 for corn fed pork. Moreover, that is measuring the total weight gain of the animal, not the chops, roasts or belly portions that are most in demand. Some offset of that disadvantage occurs in the corn shipment requiring much less stringent shipping methods, but the history of the packing industry in the past half century has been one of moving the plants closer to the producer. That logic applies to raising the animal close to the source of the feed.
The only economic advantage that I can see for China to buy U.S. pork is short term in that they simply don’t have the current supply to keep up with their economic growth. But they will get the ability to create their own supply soon enough.
And when they do, there is no way that pork produced in U.S. plants will be able to compete with that produced in Chinese plants, no matter how efficient we think we are. There is an obvious pattern to China’s competitive advantage taking manufacturing out of the advanced countries. And there is no way that buying pork from the U.S. fits that pattern.
News items I have read in the recent past have shown pictures of dead hogs floating in the river through Shanghai. Tells me something may be amiss in their agricultural system.
Norm
From an article in this month’s Forbes, KCF and other chicken sellers in China have devalued by 30% and up due to the bird flu scare, most chickens in China are raised on small local rural farms, and KCF was purchasing locally.
As for the floating pigs, the article surmised they were dumped by the local farmers after they died from diseases and such, again most pork products are locally produced in small numbers.
That river is the tap water source for many cities to boot!
The reasons vary, but one of the main ones is that by buying pre-processed products, most of the food chains and markets are in essence buying America’s efficiencies and cleanliness standards which apparently the average Chinese consumer is willing to pay for that.
Also, as was pointed out, the infrastructure to support a large scale agri- business isn’t there, keep in mind until less than 10 years ago, China had almost no “highways or freeways” anywhere close to those in other developed countries.
I just finished watching a Modern Marvels program about infrastructure here and abroad, and part of it concerned itself with freeway design, the story noted that the average Chinese citizen up until the last 10 years or less, have never driven a car, most drivers licenses issued there are less than 5 years old…in some cities, you have to bid money on a lottery system in order to purchase license plates and register an automobile, upwards of twice the cost of some of the new cars being registered!
An American company is working with the Chinese government in designing the highways being built now, and most existing highways, as we comprehend them, are also less than 10 years old.
Remember, these folks used steam up until recently as their major main line railroad motive power
Thanks for your support Dave! If yourself or anyone else wants me to post the "little green men" joke again I'll gladly do so!
La Chaim! (Did I spell that right?)
Los Angeles Rams Guy If this whole thing comes to fruitition as Greyhounds has broken it down, it may not only open up several opportunities on the intermodal front but I also can't help but wonder if it just may open up an opportunity for the railroads to move these hogs to slaughter to the North Carolina facility.
I doubt it. If I ever had a "mentor" it was Al Watkins. Al had been there since near the beginning of intermodal. He started by working as a North Shore trainman on their intermodal runs between Chicago and Milwaukee. He then moved to the Erie where he helped write their first intermodal tariff. Then the C&EI where he helped get intermodal going. (The C&EI was the route to/from Chicago for the L&N and the MP.) He was in charge of intermodal pricing at the ICG when I showed up.
He once told me: "The two most difficult things in the world to transport are ice cream and live animals." Al knew what he was talking about.
It's best to move livestock as little as possible. They get stressed and/or hurt. You can't slaughter a "downer" (animal off its feet) for human consumption. The stress can cause weight loss and even change the flavor of the meat. That's why the hog packing plants are centered in and around Iowa. Iowa has the grain for feed and the room for the hogs. The live hogs don't have to be moved very far - and that's a big plus. The large Smithfield plant in North Carolina also draws on locally produced hogs and I don't see that changing. We kill these animals for meat. But we do have an obligation to treat them humanely and do the killing as humanely as possible.
As for this deal leading to the importation of Chinese produced pork with Smithfield brands, I don't see that either. The imported meat would have to be clearly labeled "Smithfield - Product of China". That would greatly devalue the brand in the US. The Chinese company didn't pay $4.7 billion for a brand name only to destroy the brand's reputation.
As Ed mentioned, China has a real infrastructure problem. It's huge population is concentrating along its eastern (Pacific) coast. Their freight rail and roads are inadequate to handle the load. It will be far more efficient to use the "Best in the World" US rail freight system to move pork to a port, then put it on a ship that will dock at one of China's huge port cities.
Nobody can see 50-60 years into the future. But I don't see the probability of significant Chinese meat shipments to the US. Their population wants a better life. That better life includes a better diet. They need all the pork they can get and the more they source pork from here the better off we all are. The US railroads can well benefit from this, if they do wake up and smell the bacon.
All this pork cant be healthy...most livestock is finished by corn and with GMO tainted corn who knows what can go wrong. We already have diebites problems caused by corn and corn syrup and starches
BonasAll this pork cant be healthy.
True enough, Bonas. But this website is still about trains. Any kind of food produced in large quantities has to be moved. One this railroads are particularly good at is moving heavy bulky loads of stuff. For example, corn, wheat and soybeans. These are basic commodities used all over the world and America raises a lot of them. Moving them by rail in the US began in the mid 1840's when Britain repealed its corn laws and we began to ship wheat there. It has been going on ever since and I don't expect it to end. With China the demand can only increase.
If a housewife wishes to use a glass or stainless steel or silver or copper or highly glazed ceramic dish food implement that has been used for milk to be used for meat or visa versa, she can insure it is clean and then submerge it in boiling water for one hour or take it to a ritiual bath ("Mikvah") and submerge it there.
The same procedure applies for using such food implements during Passover if they have been previously used for meals and other food with bread.
With a restaurant or cafe, inspection by a Mashgiya is required because it is no longer a private matter but a public one.
I am a vegetarian (as well as "Kosher") and there is no meat or meat implements in my apartment. And I do regularly use the procedure before Passover.
The exact procedure for a freightcar or truck or airplane interior may be somewhat different. But wagons hauling food existed in Moses's time, and I am sure the Mashgiyyim (plural) have parallel time-honored procedures. It is a specialty.
And if someone wishes to operate a Kosher dinner train with a vintage dining car, it should be perfectly practical to do so. I think one running to Albany from Penn Station and back or from GCT to Poughkeesie could be a winner. On the return the Rabbi would give a lecture.
This will require more refrigerated containers to be put on a ship to China.
What can be hauled back to the USA in the containers that will be sanitary?
Andrew
Watch my videos on-line at https://www.youtube.com/user/AndrewNeilFalconer
Andrew FalconerWhat can be hauled back to the USA in the containers that will be sanitary?
Flowers.
China and several other countries ship flowers to the USA because we pay more for these than other people pay for wheat or rice. Farmers USA or China go where the money is, although I presume they ship flowers by air.
Just to be clear, I don’t expect China to acquire Smithfield and immediately begin importing Chinese pork to the U.S. I agree that would be a disaster for their acquisition of Smithfield. But in the long run, some degradation of the Smithfield brand might be an acceptable price to pay for boosting the Shuanghui brand in China.
It depends on what China is seeking with the acquisition. On the face of it, this is China outsourcing pork supply. At a deeper level, this is China acquiring the technology to improve their own pork production. At still another level, this is China improving the brand of Shuanghui. I doubt that outsourcing is in the long range plan of China.
Short of actually importing Chinese pork, I don’t know how much impact China’s mere acquisition of Smithfield will have on the Smithfield brand. But it won’t take long to find out. Just Googling around, I see that the issue of food safety related to the Chinese reputation is an obvious concern voiced about the Smithfield acquisition.
There are people who say it won’t make any difference because Smithfield will still be operated under the terms of U.S. regulation. In that sense, it may be a totally unwarranted fear. But regulation is not the only thing that shapes a company. Ownership counts too, and people instinctively know that. Brand is a matter of perception and trust, and reputation is about all a consumer has to go by.
Thank you again, Dave.
I can see that two dishpans is a lot simpler than boiling everything for an hour. If you ever give a lecture on a dinner train or anywhere else in New Jersey let me know and I'll come.
Not sure if it was made clear in my postings, but China didn’t buy Smithville…
Shuanghui did, and they are a food distributor in China.
Nothing in any of the articles I have read mentions them importing anything into the US.
The sole purpose of their purchase was to secure a steady constant supply of quality pork to distribute to restaurants, food markets and fast food franchises, their three major customers.
Wall Street market analysts, The US Department of Agriculture, Bloomberg Businessweek Magazine, Forbes and oddly, the Chinese Ministry of Agriculture all predict a severe shortage of domestic pork and pork based products within the next year, as well as the current consumer shortage of chicken.
Shuanghui is simply positioning itself to be able to maximize its profits and dominate the supply chain when this shortage occurs.
Certain segments of the Chinese bureaucracy have taken to capitalism quite well, and the importation of American food product there is nothing new.
China has been struggling to feed itself for the last half century.
There are a few of us “older” forum members who remember one of Richard Nixon’s major accomplishments being the opening then “normalization” of trade with China…and most will remember one of the first major items we exported to them was wheat…food if you will.
edblysard Not sure if it was made clear in my postings, but China didn’t buy Smithville… Shuanghui did, and they are a food distributor in China. Nothing in any of the articles I have read mentions them importing anything into the US.
I only say that China bought Smithfield as a kind of figure of speech because China is the larger entity that makes the deal unique. And I realize that nobody involved with the deal has said that Chinese companies intend to export pork to the U.S. I certainly don’t expect them to do that for a long time, if ever. If they did it immediately, I don’t think it would work. What I see as significant is the potential effect on the Smithfield brand simply due to the purchase by a Chinese company. That will be interesting to watch.
I remember that there was a recent plan to export U.S. chickens to China, so they could process them, and then export them back to the U.S. What ever happened with that?
http://money.cnn.com/2006/05/19/news/international/china_chickendeal/
edblysardThere are a few of us “older” forum members who remember one of Richard Nixon’s major accomplishments being the opening then “normalization” of trade with China…and most will remember one of the first major items we exported to them was wheat…food if you will.
I am not sure when the sift to spending US money overseas occurred, but there was a time when money was not supposed to leave the country at all. If you wanted a boat load of beanie babies from China you went to a US firm called a "factor" and gave them your money. They used it to buy, say pigs, and send the pigs to China in return for your beanie babies.
Somewhere along the line we just started doing the same thing with money, and Japan and China began to get all of our cash.
Correct me if I am wrong, but I do believe that is was how things used to be done long, long ago.
I got it that you got it but not sure others got it…get it?
The melamine scandal and the new “bird flu” have just about killed all plans to import foodstuffs from there.
I am with Ken on the car loading growth effect…
Cryogenic containers or refrigerated containers from the initial packing plant to LA, boat to China.
Arrives China, emptied, washed, and repacked with pretty much any bagged or packaged product you choose, send the container right back.
With the cyro boxes, no issue at all, with the refrigerated box, you can flip the switch…either way; a box is just a box for the return trip.
While not creating a tremendous uptick in loadings, I can see where both BNSF and UP could build solid “reefer” trains again, and run them at a slightly more premium price.
edblysard Not sure if it was made clear in my postings, but China didn’t buy Smithville… Shuanghui did, and they are a food distributor in China. Nothing in any of the articles I have read mentions them importing anything into the US. The sole purpose of their purchase was to secure a steady constant supply of quality pork to distribute to restaurants, food markets and fast food franchises, their three major customers. Wall Street market analysts, The US Department of Agriculture, Bloomberg Businessweek Magazine, Forbes and oddly, the Chinese Ministry of Agriculture all predict a severe shortage of domestic pork and pork based products within the next year, as well as the current consumer shortage of chicken. Shuanghui is simply positioning itself to be able to maximize its profits and dominate the supply chain when this shortage occurs. Certain segments of the Chinese bureaucracy have taken to capitalism quite well, and the importation of American food product there is nothing new. China has been struggling to feed itself for the last half century. There are a few of us “older” forum members who remember one of Richard Nixon’s major accomplishments being the opening then “normalization” of trade with China…and most will remember one of the first major items we exported to them was wheat…food if you will.
One article in the Des Moines Register mentioned one reason Smithfield was purchased was because of it's brand, but for the Chinese market place. It seems that some of the domestic Chinese companies have a less than stellar record on quality and an American brand is thought to sell better over there. So I doubt the Smithfield brands will go away, here or there. Or that it's a scheme to open the door for importing meat from China.
Another article on "Perfect Foods," those that are supposed to be better for us, says Pork tenderloin is as lean as a skinless chicken ***.
jeffhergertOne article in the Des Moines Register mentioned one reason Smithfield was purchased was because of it's brand, but for the Chinese market place. It seems that some of the domestic Chinese companies have a less than stellar record on quality and an American brand is thought to sell better over there.
That is exactly the point I have been making. Except, I also believe that there will be a counter effect of using the purchase of Smithfield to boost Shuanghui. I think it amounts to a balancing of brand capital. One goes up and the other goes down. The Chinese market will welcome the Smithfield reputation, and the U.S. market will worry about the Shuanghui reputation.
It would be entirely different if China simply bought the pork from Smithfield.
Andrew Falconer This will require more refrigerated containers to be put on a ship to China. What can be hauled back to the USA in the containers that will be sanitary? Andrew
The reefers can (and will) come eastward across the Pacific with "dry" loads. A dry load is freight that does not need refrigeration.
It's common to put dry loads in refrigerated equipment so the equipment can be returned under revenue load.
Example: UPS has a sort facility in Sioux Falls (or they did). They would use their Martrac reefers in TOFC service to move packages to Sioux Falls from Chicago. The refrigeration systems would be turned off westbound.
Once the trailers were made empty out there in meat packer land they'd turn the refrigeration units on and get a load of meat bound for the east coast. Then the trailers would move in TOFC service with a refrigerated load. You cannot get to 0 empty, non revenue miles. But it's best to minimize those miles.
The containers that carry US pork to China will return with bicycles, clocks, lamps, whatever. Not a problem.
Bucyrus jeffhergertOne article in the Des Moines Register mentioned one reason Smithfield was purchased was because of it's brand, but for the Chinese market place. It seems that some of the domestic Chinese companies have a less than stellar record on quality and an American brand is thought to sell better over there. That is exactly the point I have been making. Except, I also believe that there will be a counter effect of using the purchase of Smithfield to boost Shuanghui. I think it amounts to a balancing of brand capital. One goes up and the other goes down. The Chinese market will welcome the Smithfield reputation, and the U.S. market will worry about the Shuanghui reputation. It would be entirely different if China simply bought the pork from Smithfield.
I bet the average consumer won't realize that Smithfield family of brands will be owned by a foreign company. How many of us would have noticed this if Greyhounds hadn't started this thread? (Or given it much thought if we had?) My local media, mostly print, has had a few items on this, but I live in Iowa, hog country. National media may have had an item when it was first announced, but have they gave much coverage since?
Any back lash that they may get will probably be because of a special interest group using social media (sensationalizing innuendo and half truths) to influence the general population. This happens from time to time. It will also be less because they are Chinese owned, but more because they raise hogs in confinements and then slaughter them for food.
John WR: Anywhere? Will you come to Jerusalem or Tel Aviv or Haifa for my next lecture? Probably on sound-isolaton problems between school classrooms?
I thought I said anywhere near New Jersey, Dave.
I can see how this deal would certainly boost rail traffic. Even if the acquisition sullies the Smithfield brand in the U.S., that brand damage won’t affect the Chinese market. They will see the Smithfield brand as a big improvement over their Shuanghui brand even if the Smithfield brand is compromised in the deal.
I don’t have the exact numbers, but I gather that the shortfall in the Chinese market is much larger than the whole U.S. market. I also understand that the Smithfield production is only 3% of the Shuanghui production. Therefore, I wonder if the Smithfield production could be ramped up sufficiently to serve the existing U.S. market and also make up the entire shortfall in the Chinese market. I would guess that it cannot by a longshot.
If the Shuanghui production is 33 times larger than the Smithfield production; and Shuanghui has a “sizeable” shortfall, it might be that it would require increasing Smithfield production by much more than double or triple in order to make up the shortfall. It would be interesting to know the limit to Smithfield’s potential expansion.
Since it is said that the point of the acquisition was to lock in more supply, then it might be that Shuanghui would sacrifice the higher price of pork in the U.S. market in order to increase supply in the Chinese market. So, considering these factors, it seems likely that all the current Smithfield pork production could go to China and still not solve the Chinese shortfall. And if the deal results in any Smithfield brand damage in the U.S. market, then that would leave still more U.S. pork available for Shuanghui to send to China.
Therefore, it might be that the entire Smithfield production will go to China, and that that production will be several times greater than today’s production. And all of that production will go by rail to one U.S. port.
Well, getting back to my original point.
Except for that one rather large Smithfield hog plant in North Carolina, (one of eight Smithfield facilities) US pork production is concentrated in and around Iowa. It's concentrated there because that's where the hog food is. It takes 7.7 pounds of grain to produce one pound of pork. It makes more economic sense to ship one pound of pork than 7.7 pounds of grain.
Iowa is a long way from any port. When (not If) this deal increases pork exports to China the railroads will have an opportunity to increase their business. They should do so. They should be talking to Smithfield about this now. That's what I was trying to say.
In addition to export opportunities, the US west coast has minimal pork production. If the railroads can haul pork for export they can haul pork for domestic consumption. Both export and domestic pork going west will create an empty reefer container in California. This is an opportunity, not a problem. Load it back east with California produce. It's a golden opportunity for the railroads. I hope they see it.
Bucyrus Since it is said that the point of the acquisition was to lock in more supply, then it might be that Shuanghui would sacrifice the higher price of pork in the U.S. market in order to increase supply in the Chinese market.
Since it is said that the point of the acquisition was to lock in more supply, then it might be that Shuanghui would sacrifice the higher price of pork in the U.S. market in order to increase supply in the Chinese market.
Greyhounds- If pork is going to move from Iowa to west coast port in big quantities, it's either going to go by truck or by train. How many trucks would it take to equal a train of pork chops? My city has a Smithfield packing plant- John Morrel's. I'd estimate that each day, 100 trucks haul boxed pork out of town. There is still a rail spur into the plant, one I've never seen used in the 29 years I've lived here. It seems like it wouldn't take too much imagination to envision load of 10-12 refrigerator cars going out by rail every day.
Murphy Siding Bucyrus Since it is said that the point of the acquisition was to lock in more supply, then it might be that Shuanghui would sacrifice the higher price of pork in the U.S. market in order to increase supply in the Chinese market. Did you hear the one about the Chinese company that bought an American pork processor, in order to sell American pork at lower prices in China? Me neither.
I don’t think you are looking at it deeply enough. Every pork chop Shuanghui sells in the U.S. is one less pork chop they sell in China. It is true that the U.S. chop sells at a higher price. But they bought Smithfield to close the production shortfall in China, and to improve the Shuanghui brand in China, so they might prioritize serving the Chinese market.
And considering that they are currently producing 33 times more pork for China than Smithfield produces for the U.S., Shuanghui might decide that it makes better business sense to sell the Smithfield pork in China (although at a lower price) in order to help improve the supply and brand in China where the bulk of their business will be. In the big picture, they might actually make more money doing that despite sacrificing the higher prices of the smaller U.S. market.
And furthermore, the U.S. pork market is shrinking while the Chinese market is growing, so they might want to favor the Chinese market with brand and supply improvement rather than go after the higher price of the shrinking U.S. market.
And still furthermore, I believe the U.S. Smithfield market will be damaged by the reputation of Shuanghui ownership. If that proves to be the case, then the U.S. Smithfield market will shrink further. If they are trying to improve their brand image in China and in the world, they might be well served by not getting the publicity of butting heads with brand resistance in the U.S. even though they will get a higher price here.
Considering all of those things together, I expect nearly all of the Smithfield pork production to go to China. And I also expect Shuanghui to expand the Smithfield production in the U.S. as much as regulations and environmental capacity can support. I don’t know what the limit of the Smithfield production would be, but I would guess that it will be met before the Chinese pork shortfall is ended.
So that would be all of pork that even a greatly expanded Smithfield can produce going to China by rail and sea, while other U.S. producers take up the slack and fill in the missing U.S. production from Smithfield.
Bucyrus Murphy Siding Bucyrus Since it is said that the point of the acquisition was to lock in more supply, then it might be that Shuanghui would sacrifice the higher price of pork in the U.S. market in order to increase supply in the Chinese market. Did you hear the one about the Chinese company that bought an American pork processor, in order to sell American pork at lower prices in China? Me neither. I don’t think you are looking at it deeply enough. Every pork chop Shuanghui sells in the U.S. is one less pork chop they sell in China. It is true that the U.S. chop sells at a higher price. But they bought Smithfield to close the production shortfall in China, and to improve the Shuanghui brand in China, so they might prioritize serving the Chinese market. And considering that they are currently producing 33 times more pork for China than Smithfield produces for the U.S., Shuanghui might decide that it makes better business sense to sell the Smithfield pork in China (although at a lower price) in order to help improve the supply and brand in China where the bulk of their business will be. In the big picture, they might actually make more money doing that despite sacrificing the higher prices of the smaller U.S. market. And furthermore, the U.S. pork market is shrinking while the Chinese market is growing, so they might want to favor the Chinese market with brand and supply improvement rather than go after the higher price of the shrinking U.S. market. And still furthermore, I believe the U.S. Smithfield market will be damaged by the reputation of Shuanghui ownership. If that proves to be the case, then the U.S. Smithfield market will shrink further. If they are trying to improve their brand image in China and in the world, they might be well served by not getting the publicity of butting heads with brand resistance in the U.S. even though they will get a higher price here. Considering all of those things together, I expect nearly all of the Smithfield pork production to go to China. And I also expect Shuanghui to expand the Smithfield production in the U.S. as much as regulations and environmental capacity can support. I don’t know what the limit of the Smithfield production would be, but I would guess that it will be met before the Chinese pork shortfall is ended. So that would be all of pork that even a greatly expanded Smithfield can produce going to China by rail and sea, while other U.S. producers take up the slack and fill in the missing U.S. production from Smithfield.
That is pure speculation and seems to be largely a rationalization for your distaste for a US corporation being bought by a Chinese one.
schlimm That is pure speculation and seems to be largely a rationalization for your distaste for a US corporation being bought by a Chinese one.
One of the lines from the Bloomberg article indicated that one of the compelling reasons Smithville was purchased was to satisfy consumer demand for better quality products.
American products are seen by the Chinese consumer as “better” than domestic products when it comes to items like prepared foods, fast foods and such.
Keep in mind we are talking about a country that just now has to learn about such things as “consumer demand”…in fact, the entire concept of “retail consumers” and “consumer choice” is almost brand new to them.
Even in their cities, you would find a pig sty or a chicken coop right beside some of their high rise downtown buildings.
Forbes did a article about an Etiquette School started by one of their ministries to teach their corporate executives how to behave in public…no kidding, they had to learn how speak indoors, (in China speaking loudly is the norm) how to sit properly, western table manners, all kind of stuff, because when the executives went overseas, because of their lack of western social graces, they were perceived as oafs and un-cultured, rude beyond what would be tolerated.
Their wives were taught how, when wearing a skirt, to sit in a chair without “flashing” the rest of the room, how to hold a tea cup, how to serve food, the etiquette of small talk, (most meals are eaten in silence there) almost the Ann Landers version of a upper middle class American housewife from the 50’s…it was quite an interesting article because it highlighted the vast cultural differences between western “manners” and social behavior and the eastern version.
I doubt Smithville will simply exclude the American market to focus its entire supply chain to China.
And Smithville will have company there; several American iconic companies have been doing business there for decades…KCF, McDonalds, heck, even Ford and GM have had production plants there for years, the Ford Focus is considered a “luxury” car there, the waiting list to buy the Chinese branded and built version is over two years.
China is finding itself developing a middle class, where there had been none for thousands of years, and the people who really run the country are discovering that, just like in capitalist countries, the middle class will spend every penny it has in order to keep up with the Jones.
Murphy SidingschlimmThat is pure speculation and seems to be largely a rationalization for your distaste for a US corporation being bought by a Chinese one. I think you're being too charitable. That is pure hallucination, brought on by a need to never be wrong. If Chinese companies want to buy American companies, just so they can sell the goods at a lower profit margin overseas, then they certainly have a lot to learn about capitalism. I think they're smarter than that.
schlimmThat is pure speculation and seems to be largely a rationalization for your distaste for a US corporation being bought by a Chinese one.
The Chinese may be applying capitalist models to some of their commerce, but they are a communist system. So I think it is risky (and naive) to conclude that they will approach the Smithfield acquisition purely as an investment in U.S. style capitalistic industry.
They have bigger fish to fry in China just maintaining social stability their astounding population and economic growth. With their wealth and growth, they could run Smithfield as a hobby if they wanted to. If you read the many articles on this acquisition, you will see that the number one objective is to increase the pork supply to China. The number two objective is to apply the Smithfield production system in China. They have gotten to where they are today by winning the competition with U.S. industry, not by investing in it.
But, in any case, if this deal follows the direction I am predicting, everybody still comes out a winner. The Chinese people get the pork they want. Shanghui gets an improved image along with better domestic production technology. Smithfield gets to stay in business and probably expand exponentially. The railroads get a lot of new business. The pork production supply chain prospers with the increased production. And new jobs will be created as other U.S. pork producers increase production to meet increased U.S. demand to make up for the shift of Smithfield supply to China.
BucyrusAnd furthermore, the U.S. pork market is shrinking while the Chinese market is growing, so they might want to favor the Chinese market with brand and supply improvement rather than go after the higher price of the shrinking U.S. market.
I don't know that the US market for pork is shrinking. The Pork Production Board describes it as "remarkably stable" since about 1980 although in 2010 is was down somewhat to 47.9 pounds consumed per person in the US. However the US Department of Agriculture says in 2010 per capita consumption of pork in the US is 57 pounds. Perhaps the statistics a gathered a little differently but that doesn't reflect a shrinking market.
I have no figures on Chinese pork consumption. A little web surfing will show that pork is has traditionally been a popular meat in China. But is there a pent up demand so that the Chinese would suddenly consume a lot more than they now consume? I'm skeptical.
Finally, China has a lot of rural people. One advantage of pork is that on a farm of any kind you can raise a single pig for its meat with much of the feed coming from garbage you would normally throw away. Then you can slaughter it in the fall. It is almost like free food. I suspect a lot of Chinese people do this. I know of people in the US who have done it. Such people are unlikely to buy pork imported form the US.
John WRFinally, China has a lot of rural people. One advantage of pork is that on a farm of any kind you can raise a single pig for its meat with much of the feed coming from garbage you would normally throw away. Then you can slaughter it in the fall. It is almost like free food. I suspect a lot of Chinese people do this. I know of people in the US who have done it. Such people are unlikely to buy pork imported form the US.
BF (before refrigeration), people in cities used to keep pigs and sheep for same purpose. Economical to feed, and fresh meat when you wanted it. With advent of 'frigeration, city dwellers stopped doing this, and the horse also departed the scene as the primary power for transportation. Ordinances were passed and now, keeping a pig on your roof is rather frowned upon.
John WRBucyrusAnd furthermore, the U.S. pork market is shrinking while the Chinese market is growing, so they might want to favor the Chinese market with brand and supply improvement rather than go after the higher price of the shrinking U.S. market. Bucyrus, I have no figures on Chinese pork consumption. A little web surfing will show that pork is has traditionally been a popular meat in China. But is there a pent up demand so that the Chinese would suddenly consume a lot more than they now consume? I'm skeptical.
John,
There is a pent up demand for pork in China because scarcity has kept the price too high for much of the market to afford. But now, with China’s new prosperity from manufacturing, more people have the money needed to buy pork. That is the reason for the sudden surge in pork consumption in China. The pent up demand is suddenly unconstrained, and able to be fulfilled if the supply is made available.
BucyrusThe pent up demand is suddenly unconstrained, and able to be fulfilled if the supply is made available.
I'm sure you are correct about this. And of course a steady US demand along with an increasing demand in China is good for US pork producers. This is certainly not bad news for American railroads. However, I am more than a little skeptical that it will be a bonanza for U. S. railroads. I would be very happy to be mistaken on this point but I prefer a wait and see approach.
Bucyrus There is a pent up demand for pork in China because scarcity has kept the price too high for much of the market to afford. But now, with China’s new prosperity from manufacturing, more people have the money needed to buy pork. That is the reason for the sudden surge in pork consumption in China. The pent up demand is suddenly unconstrained, and able to be fulfilled if the supply is made available.
Murphy Siding Bucyrus There is a pent up demand for pork in China because scarcity has kept the price too high for much of the market to afford. But now, with China’s new prosperity from manufacturing, more people have the money needed to buy pork. That is the reason for the sudden surge in pork consumption in China. The pent up demand is suddenly unconstrained, and able to be fulfilled if the supply is made available. [Red is emphasis added by Murphy Siding] Only if the Chineese are willing to pay what others around the world (The USA for example) are willing to pay for the goods.Even if you are a communist country, the laws of supply and demand are still applicable.
Bucyrus There is a pent up demand for pork in China because scarcity has kept the price too high for much of the market to afford. But now, with China’s new prosperity from manufacturing, more people have the money needed to buy pork. That is the reason for the sudden surge in pork consumption in China. The pent up demand is suddenly unconstrained, and able to be fulfilled if the supply is made available. [Red is emphasis added by Murphy Siding]
[Red is emphasis added by Murphy Siding]
That is fundamentally true, but while capitalism calls for selling at the highest possible price, it is often possible to make more money by selling at a lower price, because it attracts a larger market and more sales. So price is one factor but market size is also a factor. The Chinese pork market is vastly larger than the U.S. market, so it might pay to cultivate the larger market by temporarily subsidizing that market with prices lower than the U.S. price.
Look at it this way: Smithfield pork will be Shanghui pork and Shaghui will be selling pork to both the U.S. and Chinese markets. Do you think the price to each market will be the same? China has a communist government. They take care of people cradle to grave. They are not going to let their people starve just because the people can’t pay the world market price for food. The Chinese government will subsidize the world market price to their people without hesitation if they have to. And they will be entirely able to do so because of their vast wealth from their manufacturing success. They are in no way committed and bound to the dictates of pure capitalism.
It is true that the laws of supply and demand are inviolable, as you say, but they don’t have to be followed. And command and control economies such as the one in China are almost defined by choosing not to follow the laws of supply and demand if there is a greater societal reason not to.
Bucyruswhile other U.S. producers take up the slack and fill in the missing U.S. production from Smithfield.
Doubtlessly this will be the true end result.
I've read this thread for some time now, and I cannot see how those who claim this development will result in cheaper pork for american tables, can take themselves seriously.
How does the disappearance of excess supply customarily affect the marketplace? What effect has the rise in Chinese demand for petroleum products had on the price we pay at the pump? What reasonable expectation can someone have that the end result for pork will be any different than it has been for gasoline?
Smithfield's competitors will surely fill the void left in the American market by Smitfield's exports to China, but will do so at a higher price, thanks to less domestic competition.
Firelock76 I'm glad you and your friends enjoyed the joke but someone must have taken exception to it because it's GONE!
Okay, a priest, a rabbi, and a politician walk into a blood stained boxcar, and find a forum moderator shackled to the wall....the politician asks "Are you going to bless this car, Rabbi? And the Rabbi shrugs with a nod towards the moderator and says:
This joke needs a punch line. use your imagination!!
Convicted One Bucyruswhile other U.S. producers take up the slack and fill in the missing U.S. production from Smithfield. Doubtlessly this will be the true end result. I've read this thread for some time now, and I cannot see how those who claim this development will result in cheaper pork for american tables, can take themselves seriously. How does the disappearance of excess supply customarily affect the marketplace? What effect has the rise in Chinese demand for petroleum products had on the price we pay at the pump? What reasonable expectation can someone have that the end result for pork will be any different than it has been for gasoline? Smithfield's competitors will surely fill the void left in the American market by Smitfield's exports to China, but will do so at a higher price, thanks to less domestic competition.
Well there is the general assumption that Chinese production is more cost competitive, and so it results in the lowest price. However, that assumes Chinese labor and Chinese regulations in China. I don’t see how that advantage can apply to the Chinese owned Smithfield operation in the U.S.
And you are right that diversion of U.S. pork production to China will reduce the U.S. supply and raise the price.
But what would you say to those who believe that Shanghui will sell to the highest priced market first, with only the excess production going to the lower priced Chinese market? Under that model, production and price for the U.S. pork market should remain the same.
Convicted One Firelock76 I'm glad you and your friends enjoyed the joke but someone must have taken exception to it because it's GONE! Okay, a priest, a rabbi, and a politician walk into a blood stained boxcar, and find a forum moderator shackled to the wall....the politician asks "Are you going to bless this car, Rabbi? And the Rabbi shrugs with a nod towards the moderator and says: This joke needs a punch line. use your imagination!!
BucyrusAnd you are right that diversion of U.S. pork production to China will reduce the U.S. supply and raise the price.
It will NOT reduce supplies or raise the price. The factor that gets lost is that we are nowhere near full farm capacity, and we can grow and/or raise enough food to feed the world IF SOMEONE WANTS TO *BUY* THE PRODUCT.
BroadwayLion BucyrusAnd you are right that diversion of U.S. pork production to China will reduce the U.S. supply and raise the price. It will NOT reduce supplies or raise the price. The factor that gets lost is that we are nowhere near full farm capacity, and we can grow and/or raise enough food to feed the world IF SOMEONE WANTS TO *BUY* THE PRODUCT. ROAR
I was referring to a diversion of U.S. pork supply to China, which is the stated goal. That most certainly would reduce the U.S. supply and raise the U.S. price. But you are right that U.S. production can be ramped up to make up for the diverted supply, and that will bring the price back down.
Althought it could be that the growing Chinese demand could raise pork prices world wide, including the U.S.
Here is an article that tells us not to worry about a U.S. consumer backlash against Smithfield due to the acquisition by Shanghui. The article dances around the issue of China’s food reputation affecting Smithfield, and is able to nervously dismiss it after a struggle.
Well first of all, if they are sure that Americans won’t change their buying habits, why even bring it up?
But the real jewel of this article is the conclusion that Americans won’t change their buying habits over the issue because they won’t know where the product comes from. Yet that is precisely why Americans will question the quality of the Smithfield product.
http://www.cnbc.com/id/100777347
Quote from the article:
"From a consumer stand-point, it's a huge non-event," Karp said of the Smithfield deal. "It [the question of food safety associated with Shanghui] will likely not have much of an effect."
When consumers go into a market, they're likely going to focus on what's on sale, which cuts of meat look good and then maybe narrow it down to a few of their favorite brands, Karp said. "But you may or may not even know which are Smithfield brands, since they're also Farmland, they are Armour, and Eckrich, and Carando and they own Gwaltney," Karp said, listing off just some of Smithfield's subsidiaries.
[My emphasis added]
Murphy SidingAnd still furthermore..
Originally I was going to say 'only to find a forum moderator and a lumber salesman shackled to the wall",. but I suspected you might find difficulty embracing the notoriety.
BucyrusBut what would you say to those who believe that Shanghui will sell to the highest priced market first, with only the excess production going to the lower priced Chinese market?
I would say that the Chinese are not buying Smithfield to use as a conduit to sell far eastern pork to the American Dinner table. They are buying it to place more pork on the Chinese dinner table.
BroadwayLion. The factor that gets lost is that we are nowhere near full farm capacity, and we can grow and/or raise enough food to feed the world
And when that "ramped up" production starts depleting feedstock supplies, what will happen to the cost of feedstocks?
As I recall, even a small rise in the cost of shelled corn caused all meat prices to spike a few years back. With the producers using the rise of ethanol production as an excuse to raise their prices. I don't recall 'excess supply capacity' coming into play and driving prices back down then, and I don't expect any different result today.
BroadwayLion we are nowhere near full farm capacity,
And as that surplus capacity is diminished, a corresponding price increase will follow.
Convicted OneAs I recall, even a small rise in the cost of shelled corn caused all meat prices to spike a few years back. With the producers using the rise of ethanol production as an excuse to raise their prices. I don't recall 'excess supply capacity' coming into play and driving prices back down then, and I don't expect any different result today.
The devil is in the details. Table corn and Ethanol corn are not the same at all and are not interchangeable. The farmer must decide what he is going to grow at the beginning of the growing season. And if the ethanol plants were using saw grass, then that is what the farmers will grow and so the use of corn for ethanol is quite moot. Another point is, that in selling corn to the ethanol plant the farmer by-passes ADM (Archer Daniels Midland), and can command a better price for his crop.
From corn used to make ethanol, brewer's yeast is a by-product used for cattle feed.
The biggest stumbling block is, as you might imagine, is the Federal Government. A bunch of green-painted do-gooders thought it would be a good thing to take farm land out of production and put it into conservation. (CRP). Once signed up for CRP the land is out of production for five to 10 years, maybe more. Ethanol came to town, and farmers were scrambling to renig on their contracts and to put land back into production. Some could buy out and others could not. (Think rails to trails).
Still farm inputs are expensive, the farmer must take out a farm loan in the hundreds of thousands of dollars, and then pay it back when the crop comes in. You have to be a good manager to be a farmer since you only get paid once a year.
In Dairyland, cows were take out of production, (butchered) to reduce milk supply and support the milk price. The government paid milk producers to go out of business. Once out it is hard to start up, and since they sold not just the cows, but the right to run milk cows on the land, the bridges have been burnt.
Still, we can Grow, baby Grow!, and we can produce.
More on Kosher, to answer questions. Talked with my more ultra-Orthodox teacher and other teachers:
1. Kosher is Kosher as far as transportation. No one gives a hoot if the truck, airplane, container, trank car, regular freight car, or whatever, was used to carry pork or even fetilizer once the car is clean enough to carry Kosher products.
2. A tank car is like a food implement or pot or pan, used in a restaurant. Cleaning with supervision by a Mashgiiya is required. But if the movement is regular, the Mashgiiya can give just spot checks, not required every day or each load, once he has confidence that the workmen will follow the procedures.
4. Packaged food in regular freight cars require no special treatment of the freight car. Refrigerator cars can carry exposed food along with non-Kosher food, meat and milk, as long as the car is kept cold at all times, and the non-compatible food doesn't make any contact.
5. Ultra-Orthodox look at the lable and trust it. They don't inqurire as to what the shipping practices are.
6. One hour boiling of a non-Kosher food iimplement may not be required. A minute or two may be enough. But none source says conversion from meat ot millk or visa versa is never ever done. Unnless the meat implement is accidentally used for milk, making it non-Kosher, then it can be made Kosher for either meat or milk by the boiling water. Boiling pot that is too large to be put in another pot is done by filling and then letting the boiling water overlow and cover the sides.
Convicted One BucyrusBut what would you say to those who believe that Shanghui will sell to the highest priced market first, with only the excess production going to the lower priced Chinese market? I would say that the Chinese are not buying Smithfield to use as a conduit to sell far eastern pork to the American Dinner table. They are buying it to place more pork on the Chinese dinner table.
I agree with that, but it misses the point of my question because I did not make it clear. When I referred to Shanghui selling to the highest priced market first, I meant selling the Smithfield or U.S. produced component of their production. I did not mean to include the component produced in China.
Will China only sell U.S. pork to the Chinese market once it has sold all to the U.S. market that the U.S. market demands?
Or-- will Shanghui forego sales of U.S. produced pork to the U.S. market, leaving U.S. demand unfulfilled, and divert U.S. pork production to the Chinese market?
I expect it to be the latter, but some might say that is hallucinatory unless the Chinese market prices the same as the U.S. market, which it probably cannot do.
Bucyrus Or-- will Shanghui forego sales of U.S. produced pork to the U.S. market, leaving U.S. demand unfulfilled, and divert U.S. pork production to the Chinese market? I expect it to be the latter, but some might say that is hallucinatory unless the Chinese market prices the same as the U.S. market, which it probably cannot do.
I read the abusive delusional ad homs in that other post, and would say I was shocked, except considering the source, what else is there to expect? (LOL)
I tend to agree with you, that something OTHER than profit (shock and awe) is the prime motive. probably a good time to buy stock in Smithfield's competitors.
schlimm Bucyrus Murphy Siding Bucyrus Since it is said that the point of the acquisition was to lock in more supply, then it might be that Shuanghui would sacrifice the higher price of pork in the U.S. market in order to increase supply in the Chinese market. Did you hear the one about the Chinese company that bought an American pork processor, in order to sell American pork at lower prices in China? Me neither. I don’t think you are looking at it deeply enough. Every pork chop Shuanghui sells in the U.S. is one less pork chop they sell in China. It is true that the U.S. chop sells at a higher price. But they bought Smithfield to close the production shortfall in China, and to improve the Shuanghui brand in China, so they might prioritize serving the Chinese market. And considering that they are currently producing 33 times more pork for China than Smithfield produces for the U.S., Shuanghui might decide that it makes better business sense to sell the Smithfield pork in China (although at a lower price) in order to help improve the supply and brand in China where the bulk of their business will be. In the big picture, they might actually make more money doing that despite sacrificing the higher prices of the smaller U.S. market. And furthermore, the U.S. pork market is shrinking while the Chinese market is growing, so they might want to favor the Chinese market with brand and supply improvement rather than go after the higher price of the shrinking U.S. market. And still furthermore, I believe the U.S. Smithfield market will be damaged by the reputation of Shuanghui ownership. If that proves to be the case, then the U.S. Smithfield market will shrink further. If they are trying to improve their brand image in China and in the world, they might be well served by not getting the publicity of butting heads with brand resistance in the U.S. even though they will get a higher price here. Considering all of those things together, I expect nearly all of the Smithfield pork production to go to China. And I also expect Shuanghui to expand the Smithfield production in the U.S. as much as regulations and environmental capacity can support. I don’t know what the limit of the Smithfield production would be, but I would guess that it will be met before the Chinese pork shortfall is ended. So that would be all of pork that even a greatly expanded Smithfield can produce going to China by rail and sea, while other U.S. producers take up the slack and fill in the missing U.S. production from Smithfield. That is pure speculation and seems to be largely a rationalization for your distaste for a US corporation being bought by a Chinese one.
No it is not pure speculation, but I am connecting some dots, and in those areas it is indeed my opinion or speculation. I have read a lot of articles on this acquisition, and most of what I said is presented in those various articles either as a documented fact or as their opinion. They connect dots too. And what is wrong with speculation? Everybody does it. I find the acquisition interesting for its many tentacles of business and marketing principles. I believe it is unprecedented, and I am not sure if anybody completely comprehends all of the implications of the deal.
If you think that it seems that what I said is largely a rationalization for my distaste for an American company being bought by a Chinese company, then that is your perception, but it is not accurate. And I also have to wonder what you are implying by that comment. Why would I have distaste for an American company being bought by a Chinese company?
I would prefer not to have jobs go to China, but I don’t blame the Chinese. It is a national policy issue for the U.S. But in any case, the Chinese buying companies in the U.S. is entirely different than U.S. jobs being outsourced to China. The results are entirely different. I could not care less if China bought every business in the U.S. They would still have to use U.S. labor, and follow U.S. regulations. If the Chinese were to invest their wealth in U.S. industry, it would spur expansion and job creation in the U.S. But why would they do that when they can invest for a better return in their own economy? That question is what makes this acquisition so interesting.
This thread has been a real learning experience for me.
First, here's some detail on 2012 US pork exports. Last year, 23% of US pork production was exported. China was the 3rd largest importer of US pork in terms of tonnage. They received 431,145 metric tons of US pork. I equate that to 22,631 containers loaded at 42,000 pounds per container.
http://www.usmef.org/downloads/Pork-2003-to-2012.pdf
So shipping US pork to China, Japan, S. Korea, Mexico, etc. is nothing new.
On the surface this appears to be nothing more than a free trade, free market, free will transaction. A company headquartered in Hong Kong has concluded that it can make some more money by importing more US pork for Chinese consumption. They could do this in various ways, but they decided it was best to just buy the largest US pork producer. The US producer wasn't doing all that well financially and agreed to the deal.
If this remains a free market situation everybody will benefit. The Chinese who buy US pork will experience a net gain in welfare otherwise they won't make the purchase. The Americans who raise and sell the pork will also experience a net gain in welfare otherwise they won't make the sale. That's on the surface. Below the surface, well I've seen absolutely nothing to indicate that there is anything below the surface.
And that was the learning experience for me. I was totally surprised by many of the responses on this thread. Some posters just refused to accept the concept that this is a straight up free market deal. The US has pork, the Chinese people want more pork. Let's make a deal. But some folks just cannot accept that. I'm not sure why they can't accept that, but I'm glad I learned that they can't.
Getting back to the railroad opportunity, which was my original point; US pork production is centered in and around Iowa. That's a long way from any port. As pork exports to China increase, which is the whole point of this transaction, the railroads will have a great opportunity to haul the containers from the point of production to the ports. If they play the right cards. Hopefully, they will.
greyhounds This thread has been a real learning experience for me. First, here's some detail on 2012 US pork exports. Last year, 23% of US pork production was exported. China was the 3rd largest importer of US pork in terms of tonnage. They received 431,145 metric tons of US pork. I equate that to 22,631 containers loaded at 42,000 pounds per container. http://www.usmef.org/downloads/Pork-2003-to-2012.pdf So shipping US pork to China, Japan, S. Korea, Mexico, etc. is nothing new. On the surface this appears to be nothing more than a free trade, free market, free will transaction. A company headquartered in Hong Kong has concluded that it can make some more money by importing more US pork for Chinese consumption. They could do this in various ways, but they decided it was best to just buy the largest US pork producer. The US producer wasn't doing all that well financially and agreed to the deal. If this remains a free market situation everybody will benefit. The Chinese who buy US pork will experience a net gain in welfare otherwise they won't make the purchase. The Americans who raise and sell the pork will also experience a net gain in welfare otherwise they won't make the sale. That's on the surface. Below the surface, well I've seen absolutely nothing to indicate that there is anything below the surface. And that was the learning experience for me. I was totally surprised by many of the responses on this thread. Some posters just refused to accept the concept that this is a straight up free market deal. The US has pork, the Chinese people want more pork. Let's make a deal. But some folks just cannot accept that. I'm not sure why they can't accept that, but I'm glad I learned that they can't. Getting back to the railroad opportunity, which was my original point; US pork production is centered in and around Iowa. That's a long way from any port. As pork exports to China increase, which is the whole point of this transaction, the railroads will have a great opportunity to haul the containers from the point of production to the ports. If they play the right cards. Hopefully, they will.
Nobody is looking for hidden motives. That makes it sound so sinister and conspiratorial. What may appear to be a search for hidden motives may instead be simply highlighting facts that are not apparent to everyone. This may very well be a free trade, free market, free will transaction. But I am not sure where the boundaries of that definition lie.
Let’s get down to specifics. Give me an example of what would not be a free trade, free market, free will transaction. And show me what has been said in this thread that would indicate a refusal to believe that this is a free trade, free market, free will transaction.
schlimm Ken; I agree with you [mirabile visu!!] and have also found the progression of thoughts 'interesting" to say the least in the search for hidden motives. Seems like pretty straight forward market economics. Iowa has been the center of US pork production because, in part at least, it is where the feed is from. However, if exports increase sufficiently, the market may lead to some production moving to the west coast, closer to the ports, since it is probably cheaper to transport corn than pork 2000 miles.
At the risk of ruining our mirabile visu moment, I don't see pork production moving to the west coast.
I takes 7.7 pounds of grain to create one pound of pork. So you'd have to ship 7.7 times as much tonnage. It may be cheaper to ship a pound of grain than a pound of pork, but you have to ship much more grain. And those grain cars would return to the Midwest empty. 2,000 empty miles would have to be covered by the freight rate on grain to the west coast.
Conversely, an empty refrigerated container that needs to be moved eastward from the west coast can be loaded with all kinds of good things to eat. Such as lettuce, broccoli, carrots, etc. California does produce almost half of the fresh fruits and vegetables for the US. (And export to eastern Canada.) Washington state produces 59% of the apples. Idaho and Washington produce about one half of the potatoes. Loading the equipment both ways does produce a lot of cost savings. Pork west, potatoes east. Meat and potatoes. Money on the bottom line.
If it made economic sense to process hogs on the west coast there would be some plants there. People out west do eat pork. As it is, there is only one hog processing plant of any significant size on the west coast. That would be Clougherty (Hormel owned) at Vernon, CA. I show it as having a modest capacity of 7,300 head per day - not near enough for the population. (Figure 144 pounds of useable pork product out of each head.)
They've built their "Farmer John's" brand around being locally produced. They scored big 40 years ago when they came out with "Dodger Dogs" and became the supplier of hot dogs for the Dodger games. The "locally produced" familiar brand is worth something in the southwest, but it won't play in China. The hogs for Clougherty aren't raised in California. They come in live from out of state. This used to be one of the few remaining livestock moves on US railroads. (UP from Nebraska). But now they source live hogs from Arizona and other western states. I'd guess Hormel sees more value from the local brand than the extra cost of processing the hogs in California.
Anyway, there is a significant movement of animal protein to the west coast from the Midwest and the south. (Pork, beef and chicken.) The truckers who move this come back from the west coast with produce. It is quite irritating to me that the railroads don't go after this market. It will be even more irritating if the railroads don't grab the increased pork exports to China.
As Ernie Banks used to say, "Pugnemus duo!" What you say on pork makes a lot of sense, with good illustrations of why. Thank you.
There's a couple of other reasons why hog production won't quickly move to the west coast. First, hog production does require water. Second, it produces a lot of hog manure. Mass quantities of pig poop on the west coast would raise some enviromental concerns. There is a good use for it though. It makes good fertilizer, for things like corn, that hogs eat.
Murphy Siding There's a couple of other reasons why hog production won't quickly move to the west coast. First, hog production does require water. Second, it produces a lot of hog manure. Mass quantities of pig poop on the west coast would raise some enviromental concerns. There is a good use for it though. It makes good fertilizer, for things like corn, that hogs eat.
Smell: there are several hog farms in Utah, and the people who live near them are unhappy when the wind blows from the hog farms towards their homes. Certainly, the people who live near any location of a new hog farm would be unhappy.
Deggesty Water: water is not in plentiful supply in the West. Smell: there are several hog farms in Utah, and the people who live near them are unhappy when the wind blows from the hog farms towards their homes. Certainly, the people who live near any location of a new hog farm would be unhappy.
Water: water is not in plentiful supply in the West.
What is the practical limit to pork production in the U.S.? There is only so much water, land, and air. How much added production is needed to feed the Chinese market opened up by the acquisition of Smithfield? Would tripling U.S. production be enough? Do we have the natural resources to triple production?
Bucyrus What is the practical limit to pork production in the U.S.? There is only so much water, land, and air. How much added production is needed to feed the Chinese market opened up by the acquisition of Smithfield? Would tripling U.S. production be enough? Do we have the natural resources to triple production?
Air? The extra hogs are going to use up all the air?
Hog production will increase to meet (meat?) the extra demand until the marginal revenue equals the marginal cost. It's an economic limit, not a "practical" limit. Resources in the US will be diverted and brought into production to meet the increased demand for hogs. This will include employing more people. (veterinarians, truck drivers, farm workers, hog killers, hopefully railroaders, etc.) It will also involve bringing marginal land into agricultural production.
This will continue until the marginal cost of production on the last extra hogs produced equals the revenue that can be realized from those extra hogs. That's the limit. The marginal cost will go up with increased production.
At some price a Chinese consumer will decide that US pork cost too much and take a pass. That will be the point of "Peak Pork", or, as you call it the "Practical Limit".
Just let the markets work. Things tend to work out better that way.
greyhounds Bucyrus What is the practical limit to pork production in the U.S.? There is only so much water, land, and air. How much added production is needed to feed the Chinese market opened up by the acquisition of Smithfield? Would tripling U.S. production be enough? Do we have the natural resources to triple production? Air? The extra hogs are going to use up all the air? {snip}
{snip}
hee hee hee... you ain't never lived downwind from a hog lot!
Semper Vaporo hee hee hee... you ain't never lived downwind from a hog lot!
Oh, I grew up in hog land. They called it the smell of money.
There is a great picture in the book "Chicago and Illinois Midland" of a passenger train ready to depart Peoria with a carload of hogs cut in ahead of the two car "first class" consist. I grew up in a very small town served by the C&IM thinking Peoria was the ultimate big city. So I know the smell.
DeggestySmell: there are several hog farms in Utah, and the people who live near them are unhappy when the wind blows from the hog farms towards their homes. Certainly, the people who live near any location of a new hog farm would be unhappy.
Any new hog farm requires a sanitation system that rivals that of many small cities.
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.
http://finance.fortune.cnn.com/2013/06/04/smithfield-china/
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.
I have no idea why the author thinks this will increase tensions. It makes no sense and the author doesn't explain why. Here's a good thought: "When trade goods cross borders soldiers don't."
We're way off topic here. But I do work with several people who immigrated from China. These immigrants aren't "The Wretched Refuse of Your Teeming Shore" as inscribed on the Statue of Liberty. They're highly educated competent people. They were chosen for employment by a world class company because they were identified as the best candidate after an extensive selection process. They're raising their children as US citizens and we're fortunate that they're here.
People of this caliber didn't leave their homes and families because things were better in China. We know there are all kinds of problems in China. But that doesn't mean that a Chinese company shouldn't buy a US company. If it's mutually beneficial for both the US and China to move US produced pork to China, just haul the freight.
I cannot think of a better outcome. The Chinese get high quality safe food. The US producers get needed money. And the US railroads get some more freight to haul. Why does anyone have a problem with this?
greyhounds Semper Vaporo hee hee hee... you ain't never lived downwind from a hog lot! Oh, I grew up in hog land. They called it the smell of money. We call it the same thing, too. There is a great picture in the book "Chicago and Illinois Midland" of a passenger train ready to depart Peoria with a carload of hogs cut in ahead of the two car "first class" consist. I grew up in a very small town served by the C&IM thinking Peoria was the ultimate big city. So I know the smell.
Oh, I grew up in hog land. They called it the smell of money. We call it the same thing, too.
greyhounds, you said it beautifully!
greyhounds Below the surface, well I've seen absolutely nothing to indicate that there is anything below the surface
Researchers often "steer" their results based upon what they hoped to find, perhaps that has become a factor here for you as well? My thoughts are not that anything sinister or hidden is part of the equation. I simply believe that those who cannot see higher pork prices for North American consumers as the outcome of this little "free market" end run, are either misguided or fooling themselves.
greyhoundsWe're way off topic here. But I do work with several people who immigrated from China. These immigrants aren't "The Wretched Refuse of Your Teeming Shore" as inscribed on the Statue of Liberty. They're highly educated competent people. They were chosen for employment by a world class company because they were identified as the best candidate after an extensive selection process. They're raising their children as US citizens and we're fortunate that they're here. People of this caliber didn't leave their homes and families because things were better in China. We know there are all kinds of problems in China. But that doesn't mean that a Chinese company shouldn't buy a US company. If it's mutually beneficial for both the US and China to move US produced pork to China, just haul the freight. I cannot think of a better outcome. The Chinese get high quality safe food. The US producers get needed money. And the US railroads get some more freight to haul. Why does anyone have a problem with this?
I agree with all of that, but it has absolutely nothing to do with any point I have made in this thread. Your response makes it seem that you believe that my questioning of this deal amounts to bigotry and a racial prejudice against the Chinese.
I never said nor implied that a Chinese company should not buy an American company. I have not even said anything whatsoever that would indicate that I oppose the deal or any part of it. If I believed that, I would come right out and say it. Perhaps you are interpreting my comments and questions as innuendo meaning that I oppose the deal. A lot of people use innuendo to avoid coming right out and saying what they mean. I don't do that.
All I have done here is pose questions about how the deal will play out in terms of market economics. There are dozens of articles on the Internet that ask the same type of questions and search for the same answers. Many of those articles talk about how people are missing this point or that point in their analysis. Everybody is asking what the deal “means.”
You brought up the topic of the deal and the potential it has for increasing rail traffic. My general conclusion (if anybody took the time to understand it) is that rail traffic will be increased even further than what is obvious on the surface. And I have made an effort to explain it in the clearest terms possible. It has nothing to do with hating the Chinese.
rrnut282 greyhounds Semper Vaporo hee hee hee... you ain't never lived downwind from a hog lot! Oh, I grew up in hog land. They called it the smell of money. We call it the same thing, too. There is a great picture in the book "Chicago and Illinois Midland" of a passenger train ready to depart Peoria with a carload of hogs cut in ahead of the two car "first class" consist. I grew up in a very small town served by the C&IM thinking Peoria was the ultimate big city. So I know the smell. putting hogs in front of the First Class cars? What was the conductor thinking?
BucyrusAll I have done here is pose questions about how the deal will play out in terms of market economics.
{sarcasm} Just for the good ol boy network, perhaps there IS a sinister motive? Maybe the Chinese have figured out that we will never make good on our debt, and have decided to hedge their position by cornering our food production?{/sarcasm}
$20.00 /bag for pork rinds? SAY IT AIN'T SO!!
The regular ones or the spicy hot ones?
The new ones, of course, with sweet/sour sauce baked in! [witless effort at sarcasm]
As long as they don’t mess with the spicy ones…basic good ole boy snack food.
Better get used to the fake, wheat puffs that are seasoned like pork rinds.
No, no…say it isn’t so….
What will we eat while drinking Lone Star and driving our pickup trucks?
Our local John Morrel plant still has tracks leading in through the front gate. The tracks seem to lead into the older part of the packing plant complex. Right next door, is the $10 million refrigerator plant that our city gave to Morrels the last time they threatened to leave town. How hard would it be to gear up and start shipping out by rail?
Well, a couple things come to mind.
If you study old pictures you'll see that loaded livestock cars were placed immediately behind the engine. This would minimize the effects of slack action. Slack action could knock the critters off their feet and hurt them. Humane considerations and the fact that the railroad would face a claim for damaged freight would dictate a rule that livestock be placed immediately behind the engine.
Second, the hogs were to be set out en route. Where else would you put them?
Railroads expedited livestock and made sure the cars kept moving. Why else would a passenger train get a load of hogs? That car, I reckon, got all kinds of special handling in Peoria.
I've got a friend who farms in central Illinois. Like me, he's now in his 60's. But he was a farm boy and worked the farm basically since he could walk. He remembers getting sheep from the C&IM and driving them down the road to the farm.
I always thought "Pearl" was the better Tejas beer.
rrnut282putting hogs in front of the First Class cars? What was the conductor thinking?
Swine before pearls?
Lonestar isn’t really beer, its simply drunk fuel in a can.
Pearl is like Jax…if there is nothing else, at all, left….
Well, I DO hope that a railroad is crafty enough to get the land side transportation of this export once it ramps up. it'd be nice to think about at least a chunk of the money staying on these shores. It would make a nice backhaul for those containers of frozen shrimp Kroger is bringing stateside.
Not just shrimp, is it?
I thought they were also importing crab and something else, cant remember what it was.
I would imagine, if US pork production ramps up as much as the articles hint at, about the only way this could work is if rail does the land haul part, I don’t think they could run that many trucks fast enough.
You're probably right. I just said "shrimp" because that is what I buy most often.
Our community is FREE to join. To participate you must either login or register for an account.