Processors Ramp Up Production Alongside a Growing Demand for

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|Feb 11|magazine40 min read

NEW YORK, Feb. 10, 2020 /PRNewswire/ -- Emerging trends, which have a direct impact on the dynamics of the food processing industry, include new technologies that reduce detrimental changes in foods and maintain their nutritional value. In addition, the consistently rising demand and consumption of processed foods is a key driver for the market. However, despite being a universal necessity, this demand is more prevalent in the developing world where recent economic progress and increasing market openness to foreign goods has radically changed the food processing sectors in countries such as India and China. As a result, the Asia Pacific remain the largest region in terms of market share. Furthermore, a significant consequence of this is the rise in consumption of proteins (beef, poultry, and pork). According to the USDA, in 2017, the global consumption of proteins was measured at 258 million tons. However, poultry segment has grown by approximately 16% between 2008 and 2017 making it highest growth segment. And due to the higher demand for meant, the meat processing equipment is now one of the fastest growing segments in the food processing industry, especially in developing countries. Furthermore, the food processing market is expected to reach an estimated USD 4.1 Trillion by 2024 with a CAGR of 4.3% from 2019 to 2024, according to data published by Research and Markets. China Xiangtai Food Co., Ltd. (NASDAQ: PLIN), JBS S.A. (OTC: JBSAY), Sanderson Farms, Inc. (NASDAQ: SAFM), Conagra Brands, Inc. (NYSE: CAG), Tyson Foods, Inc. (NYSE: TSN)

A major advantage the food processing market has is its use of various methods and technologies to detect infectious diseases. On January 9th, virologists had identified the new strain of the novel coronavirus, which was tied to a specific "wet market" in the city of Wuhan where fish and other live animals were sold. According to Emily Langdon, an infectious-disease specialist at the University of Chicago, "These markets have been known to transmit viruses before. For cultural reasons in the region, people want to see the specific animals they're buying be slaughtered in front of them, so they know they're receiving the products they paid for. That means there's a lot of skinning of dead animals in front of shoppers and, as a result, aerosolizing of all sorts of things, which is why these crowded markets are common places for viruses to jump from animals to people. It's actually how SARS, another coronavirus, started in 2003." As a result, modern food processing companies are often the answer to poorly regulated live-animal markets, which could provide viruses with opportunities to infect the human population.

China Xiangtai Food Co., Ltd. (NASDAQ: PLIN) announced today that, "the Company has donated 1,500 cartons of canned luncheon meat it produced, or 42,000 cans, to Huanggang Central Hospital and Wuhan No. 9 Hospital in central China's Hubei Province on February 8, 2020 and February 9, 2020 respectively.

With the second highest number of confirmed and suspected diagnoses in China, Huanggang city in Hubei Province has been hit hard by the outbreak of the 2019 Novel Coronavirus[1]. Residents of cities such as Huanggang and Wuhan have been instructed to stay home and suspected patients have been quarantined at designated medical facilities. This drastic yet necessary move by the Chinese government has undoubtedly led to a surging demand for non-perishable foods. In response to this mass-scale need for basic necessities, and also in an effort to aid the relief efforts in Hubei Province, the Company immediately decided to donate 750 cartons of luncheon meat cans each to Huanggang Central Hospital and Wuhan No. 9 Hospital.

Ms. Zeshu Dai, Chairwoman and Chief Executive Officer of the Company, commented, 'We would like to express our deepest respect for all aid workers and medical personnel fighting at the frontline against the coronavirus in Hubei Province. As the whole country continues to fight against this epidemic, the shortage of food supplies has become a serious problem that cannot be ignored. We are closely monitoring the needs of the residents in the affected areas. To support those patients and healthcare personnel battling at the frontline, we immediately made our inventories available to help increase food supply and delivered canned products to them. We look forward to working with everyone in overcoming the challenges ahead and aiding those who are currently fighting against the ongoing epidemic.'

[1]2019 Novel Coronavirus (2019-nCoV) is a virus (more specifically, a coronavirus) identified as the cause of an outbreak of respiratory illness first detected in Wuhan, China. Early on, many of the patients in the outbreak in Wuhan, China reportedly had some link to a large seafood and animal market, suggesting animal-to-person spread. However, a growing number of patients reportedly have not had exposure to animal markets, indicating person-to-person spread is occurring. At this time, it's unclear how easily or sustainably this virus is spreading between people. The latest situation summary updates are available on The Centers for Disease Control and Prevention's web page 2019 Novel Coronavirus, Wuhan, China.

About China Xiangtai Food Co., Ltd.: Headquartered in Chongqing, China, China Xiangtai Food Co., Ltd, is a food company primarily engaged in pork processing. The Company's operations span key sections of the pork processing value chain, including slaughtering, packing, distribution, and wholesale of a variety of fresh pork meat and parts. Primarily focused on pork products, the Company also offers other fresh and processed products, including beef, lamb and poultries. Through its core values, the Company is committed to maintaining the highest standards of food safety, product quality, and sustainability to provide high-quality, nutritious, and tasty food in a responsible manner through its portfolio of trusted brands. For more information, please visit http://ir.plinfood.com/."

For our latest "Buzz on the Street" Show featuring China Xiangtai Food Co., Ltd. recent corporate news, please head over to: https://www.youtube.com/watch?v=3YWe8POp51A

JBS S.A. (OTCQX: JBSAY) is one of the world's largest beef and pork processing companies. Back in February 2019, through its indirect subsidiary Andrews Meat Industries Pty. Limited ("Andrews Meat"), the Company acquired 60% of White Stripe Foods Pty. Ltd ("White Stripe") by the amount paid in cash of R$21,010 (US$5,625), subject to customary working capital adjustments. White Stripe expands the distribution network for international hospitality, foodservice and retail markets. The goodwill generated in this business combination is R$21,025 (US$4,925) is not eligible to be deducted for tax purposes in the United States of America. The, in March 2019, through its indirect subsidiary Swift Beef Company, the Company acquired 100% of Imperial Beef, LLC by the amount paid in cash of R$21,362 (US$5,483), subject to customary working capital adjustments. Imperial Beef provides branded meat program through acquisition of branded breeding stock. No goodwill was generated in this business combination.

Sanderson Farms, Inc. (NASDAQ: SAFM) is an integrated poultry processing company, produces, processes, markets, and distributes fresh, frozen, and prepared chicken products in the United States. Back in December, reported results for the fourth quarter and fiscal year ended October 31, 2019. "The fourth quarter marked the end of the second fiscal year in a row during which market prices for boneless breast meat produced at our plants that process a larger bird for food service customers fell to historically low levels after Labor Day," said Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, Inc. "Similar to fiscal 2018, market conditions weakened significantly during our fourth fiscal quarter of 2019. Despite weakness during our fourth fiscal quarter, overall market prices for poultry moved counter-cyclically higher during November and December, and several factors are expected to support higher market prices for poultry meat as we move into the new calendar year. The protein deficit caused by African swine fever in China and other countries, recently well-publicized chicken sandwich features at quick serve restaurants, and expected higher retail pork and beef prices should all support stronger poultry markets as we move into 2020."

Conagra Brands, Inc. (NYSE: CAG) announced last year dozens of new product launches across the four domains in which its iconic and emerging brands compete: Frozen & Refrigerated Meals, Snacks & Sweet Treats, Condiments & Enhancers, and Shelf Stable Meals & Sides. Following is a selection of some of the company's product highlights include the Slim Jim Giant Multipack comes from the No. 1 brand in meat snacks, with each box containing six giant size sticks. Available in Original and Mild flavors with over six feet of meat in one box. And the Pub Pies: An elevated take on the traditional pot pie with tender cuts of braised and roasted meat wrapped in a buttery shortbread crust. Flavors include Herb Roasted Chicken and Steak & Ale.

Tyson Foods, Inc. (NYSE: TSN) reported earlier in October that in an effort to meet growing global demand for U.S. pork, it plans to prohibit the use of ractopamine in the market hogs it buys from farmers beginning in February 2020. Ractopamine is a feed ingredient that helps increase the amount of lean meat in hogs. While it is FDA-approved and considered safe for use, some countries such as China prohibit the import of pork from hogs that have been given the product. Tyson Fresh Meats has been offering a limited amount of ractopamine-free pork to export customers by working with farmers who raise hogs without it, and by segregating the animals and products at processing plants. However, these programs no longer adequately meet growing global demand. "We believe the move to prohibit ractopamine use will allow Tyson Fresh Meats and the farmers who supply us to compete more effectively for export opportunities in even more countries," stated Steve Stouffer, President, Tyson Fresh Meats.

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