UPDATE 1-China has resumed buying U.S. pork - Smithfield

Wed May 19, 2010 3:16pm EDT

Related Topics

* China buying pork other than "muscle" cuts

* Purchase orders received this week.

* Smithfield says will not expand hog herd. (Recasts, adds company comments)

By Bob Burgdorfer

NEW YORK, May 19 (Reuters) - China has begun buying U.S. pork again -- not the hams and pork chops popular in the West, but internal organs and other parts that appeal to the Eastern palate, Smithfield Foods Inc SFD.N officials said on Wednesday.

And the company will not be expanding its hog herd now that hog prices are profitable again, Smithfield Chief Executive Larry Pope said at the BMO Capital Markets Agriculture Conference.

Smithfield Foods is the largest U.S. hog and pork producer and a major exporter of pork.

China last week lifted a year-long ban on U.S. pork, but at that time the U.S. Agriculture Department said there had been no new sales to China. Smithfield said the latest purchases did not involve large quantities.

China had banned U.S. pork amid concerns about H1N1 flu, commonly called swine flu. While the flu was not found in U.S. hogs and is not transmitted by pork, human cases of the flu prompted the ban.

"We have now the first POs (purchase orders) in hand for new Chinese business. Those shipments are being prepared," Robert Manly, chief financial officer, said during a presentation at the BMO Capital Markets Agricultural Conference.

HOG HERD WILL NOT INCREASE

Hog prices are up sharply this year due in part to a much smaller hog herd, the result of producers shrinking herds after two years of losses.

Pope said Smithfield will not increase its herd and said there may be additional reductions because of productivity gains on some of its farms.

"We have absolutely no plans to expand any of our sow herd," he said. (Reporting by Bob Burgdorfer; editing by Jim Marshall)

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