JIAMUSI CITY, China – Sen Yu International Holdings Inc. expects rising hog prices to help increase breeders' profits and expects solid long-term demand for its commercial breeding hogs based on rising consumption by Chinese consumers.

Dow Jones Newswires recently reported that high hog prices are underpinning rising US pork exports to China and a swift expansion of domestic hog herds this year, with Chinese piglet prices rising 50 percent so far to three-year highs, according to information released by the US Department of Agriculture on May 19. China's retail pork prices are at their highest levels since summer 2008, the USDA's Beijing-based Foreign Agriculture Service (FAS) said. Weak domestic prices in the first half of 2010 and diseases reduced Chinese herds sharply, prompting a pork shortage in the country that is likely more severe than officially acknowledged, according to the FAS.

The increases in nationwide pork prices accelerated last month when some farms in one of the country's major pig breeding areas were reported to have fed pigs with an illegal drug to promote production of lean meat. China's largest meat processor found some of its pigs in Henan and other farms had been affected by the lean-meat producing drugs and subsequently shut down the processing facility. This helped to worsen the supply shortage and pushed prices higher.

Rising feed and labor costs, along with supplies that fall short of market demands, are likely to keep pig and pork prices at higher levels during the second quarter of this year, and even reach a new high later in 2011, according to a recent report in Want China Times.

"Though higher prices for pork will likely encourage more hog farmers to enter the industry, Sen Yu has a well-established brand and is the leading commercial hog breeder and supplier in Heilongjiang Province," said Zhenyu (Jack) Shang, founder, chairman and CEO of Sen Yu International Holdings Inc. "While prices may fluctuate over time, we believe that strong demand from Chinese consumers for high-quality pork coupled with rising domestic incomes and economic expansion will stimulate even greater demand for our superior breeding and commercial hogs."

Sen Yu International Holdings Inc., through its subsidiaries, is the largest commercial hog breeder and supplier in Heilongjiang Province, the People's Republic of China (PRC). Founded in 2004 and based in Jiamusi City, the company owns and operates two farms in Heilongjiang Province.