Agfeed Inc

The following are questions posed to AgFeed by Reuters on 17 March 2011 as a follow up to our year-end 2010 earnings release.

1.   In the release, you mention taking write-downs and reserves related to the restructuring of a business unit. Which business unit is it and could you detail the restructuring actions?

The business unit is the older Chinese farms that were acquired in 2007 and 2008.  This is the same unit that where a write down of goodwill of $16.8 million was taken in the third quarter of 2010.  The company replaced management and initiated a study to review each farm.  The findings lead to a decision to close all the commercial farms in Jiangxi.  This accounts for the goodwill write down in the 4th quarter of $4.8 million.  The asset impairment includes these same farms and an additional asset impairment of two partial farm closings and one small farm in Shanghai division.

2.  You also mention cutting your workforce from 1,843 to 1,673. When did this workforce reduction occur?

The majority of this has happened in the fourth quarter and will continue into the first half of 2011, as we close the farms in the Jiangxi division.

3.  You mention that you commenced the closing of 8 legacy Chinese hog farms. When did you commence this Q4, or during 2010? Also, what impact will this have on 2011 revenues?

The closing started in the 4th quarter and will continue during the first half of the year.  A lower of cost or market provision was taken to GAAP standards at year-end. Revenue from the closed farms was $16.7 million.

4.  And lastly, what impact do you see on your business from the Japan earthquake and Tsunami?

We see no impact at this moment.  We have studied the situation in China and our experts conclude that the 1-313 concentrations appear at the low end of the range and are estimated to be drifting southeast.  Other models we are watching (National Oceanographic and  Atmospheric  Administration) and (The Atomic Energy Agency) feel that the levels are falling and they will move out to the east over the sea and dissipate.  AgFeed's business is primarily located southwest from the impact zone in the central east of China that is over 2000-3000 miles away.