Today
AgFeed has 31 farms with 25,000 sows and capacity for 30,000. These
current farms have the capacity to produce 600,000 – 700,000 market
hogs. These farms were acquired, with one exception, in 2008. In 2009
we made the strategic decision to invest in science based genetics and
breeding procedures in order to improve the productivity of the acquired
farms.
Through the implementation of these technologies and procedures our objective is to reduce costs of production by improving feed conversion, increasing birth rates, increasing pigs marketed per sow per year and economically maximizing market weights. To date these efforts have resulted in a costs savings of $8/pig marketed.
A major strategic initiative in driving to achieve these goals was the joint venture we established with Hypor (Hypor-AgFeed Breeding Company) in 2009. This venture will deliver genetically superior breeding stock to the current 31 farms.
Genetic improvement is a continuous and ongoing process. To this end we are building two farms that will house boars that will service our internal multiplication and commercial sows. These farms are being built with modern state of the art design and will significantly improve production and the bio-security of our commercial farms.
While significant efficiencies have been realized within our initial group of farms, we recognized that these farms would not reach the production efficiencies typical of western hog production facilities that integrate state of the art facility design, management techniques and genetics. Thus as the driver of our future growth we made the strategic decision to invest in the development of a series of western-style (technologically advanced) farms. To support our efforts to develop these new facilities we have entered into a joint venture with M2P2, a leading hog production company in the United States. M2P2 merges expertise in all phases of hog production from breeding to finishing & marketing. The joint venture named “AgFeed International Protein Technologies” (AFIPT) is managing the construction and provides the start up management of the modern western designed production pods.
Through AgFeed’s philosophy of “AgFeed, Government & Farmer” our modern western production pods will work with local governments to secure the land and build relationships with the local farmers in a business model from which all parties benefit. We believe that this represents the future of hog production in China.
Our initial investment in these western-style farms will house 35,000 breeding sows with annual production capacity of 850,000 market hogs.