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Agfeed Industries, Inc. (FEED) Reports Record 2nd Q Results, Raises Earnings, Growth Outlook for Rest of Year

With a 619 percent net income increase from this time last year, Agfeed Industries, Inc. (Nasdaq: FEED) shareholders also saw their earnings per share rise 27 cents or 350 percent over the same time period. The second quarter of 2008, which ended June 30, saw a net income of $8.6 million, and total revenues of $35.64 million from the 2nd Quarter in 2007, a 417-percent increase.

Agfeed is a commercial hog producer and the largest premix feed company in China. Stable corn prices, import restrictions, and increased efficiency helped company earnings as well as record sales.

“AgFeed has direct access to the wealthiest pork consumer markets in China and captures some of the highest hog selling prices,” said Agfeed Chairman Songyan Li, Ph.D. “We anticipate continued rapid expansion in these key consumer regions and expect to deliver strong financial results in our 3rd and 4th quarters,”

Feed sales accounted for $12.22 million of revenue. The increase was due to a hike in price for two premix feed products as well as continued expansion of retail stores (now more than 800 stores). With 90,000 hogs sold in the just-ended second quarter, the company continues to acquire hog farms. Its 2009 target for sales is 1 million hogs.

All earnings were above expectations, the company says. China continues to be an expanding market for pork products, with hog production exempt for all taxes. 65 percent of all meet consumed in China is pork.

Regarding Agfeed’s position in the market, Dr. Li said: “AgFeed management has a realistic understanding of our business through the last 13 years of our successful corporate history. We have highly skilled founders/managers who are industry experts in feed and hog production. We believe the pork consuming Chinese population of approximately 1.2 billion people will continue to demand fresh pork on a daily basis.”

He continued, “Additionally, it is our belief that China’s rapid urbanization, the potentially new boost to the Chinese economy from the Beijing Olympics, and the drastic reduction in backyard hog production output have created hog shortages throughout China and are presenting AgFeed with historical ‘land grabbing’ growth opportunities for AgFeed going forward. We expect to have an expanding business for years to come. We are focused on execution and delivering superb financial results for our shareholders.”

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