| x | Quarterly report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934 |
|---|--------------------------------------------------------------------------------------|

|  ̈ | Transition report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934 |
|--------|---------------------------------------------------------------------------------------|

| Nevada                                                        |   | 20-2597168                           |
|---------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of incorporationor organization) |   | (I.R.S. Employer Identification No.) |
|                                                          |   |                                 |
| 100 Bluegrass Commons Blvd.Suite 310Hendersonville, Tennessee |   | 37075                                |
| (Address of principal executive offices)                      |   | (Zip Code)                           |

| (917) 804-3584                                             |
|------------------------------------------------------------|
| (Registrant’s telephone number, including area code) |

| Large accelerated filer  ̈ | Accelerated filer x             |
|--------------------------------|---------------------------------|
| Non-accelerated filer  ̈   | Smaller reporting company ̈ |

----

| PART I – FINANCIAL INFORMATION | 3                                                                                           |
|--------------------------------------|---------------------------------------------------------------------------------------------|
| Item 1.                              | Financial Statements                                                                        | 3 |
| Reclassifications                    | 13                                                                                          |
| Item 2.                              | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 21 |
| Item 3.                              | Quantitative and Qualitative Disclosures About Market Risk                                  | 43 |
| Item 4.                              | Controls and Procedures                                                                     | 44 |
| Part II.                             | OTHER INFORMATION                                                                           | 44 |
| Item 1.                              | Legal Proceedings                                                                           | 44 |
| Item 1A.                             | Risk Factors                                                                                | 44 |
| Item 2.                              | Unregistered Sales of Equity Securities and Use of Proceeds                                 | 45 |
| Item 3.                              | Defaults Upon Senior Securities                                                             | 45 |
| Item 4.                              | (Removed and Reserved)                                                                      | 45 |
| Item 5.                              | Other Information                                                                           | 45 |
| Item 6.                              | Exhibits                                                                                    | 45 |
| SIGNATURES                           | 46                                                                                          |

----

| Item 1.  | Financial Statements |
|---------------|----------------------|

|                                                                                                                                                                                                                         |   | 2011        |        |   | 2010   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|-------------|--------|--------|--------|
|                                                                                                                                                                                                                         |   | (unaudited) |        |   |   |   |
| ASSETS                                                                                                                                                                                                                       |   |
|                                                                                                                                                                                                                         |   |        |        |   |   |   |
| CURRENT ASSETS:                                                                                                                                                                                                              |   |        |        |   |   |   |
| Cash and cash equivalents                                                                                                                                                                                                    |   | $           | 10,758,836  |   |   | $      | 12,399,916 |   |
| Accounts receivable, net of allowance for doubtful accounts    of $7,044,767 and $707,968                                                                                                                     |   |        | 13,230,158  |   |   |   | 21,841,442 |   |
| Advances to suppliers                                                                                                                                                                                                        |   |        | 37,969      |   |   |   | 1,676,593 |   |
| Inventory                                                                                                                                                                                                                    |   |        | 87,942,225  |   |   |   | 81,379,649 |   |
| Prepaid expenses and other current assets                                                                                                                                                                                    |   |        | 3,275,227   |   |   |   | 2,242,807 |   |
| Deferred tax asset                                                                                                                                                                                                           |   |        | 83,685      |   |   |   | 83,685 |   |
| Assets of discontinued operations                                                                                                                                                                                            |   |        | -           |   |   |   | 6,293,524 |   |
|                                                                                                                                                                                                                         |   |        |        |   |   |   |   |   |
|  Total current assets                                                                                                                                                                                                   |   |        | 115,328,100 |   |   |   | 125,917,616 |   |
|                                                                                                                                                                                                                         |   |        |        |   |   |   |   |   |
|  PROPERTY AND EQUIPMENT, net                                                                                                                                                                                            |   |        | 76,748,174  |   |   |   | 63,631,224 |   |
|  INTANGIBLE ASSETS, net                                                                                                                                                                                                 |   |        | 5,439,708   |   |   |   | 5,783,102 |   |
|  GOODWILL                                                                                                                                                                                                               |   |        | 22,801,262  |   |   |   | 22,365,414 |   |
|  DEFERRED TAX ASSET                                                                                                                                                                                                     |   |        | 2,502,836   |   |   |   | 2,329,548 |   |
|  OTHER ASSETS                                                                                                                                                                                                           |   |        | 2,114,750   |   |   |   | 3,467,758 |   |
|                                                                                                                                                                                                                         |   |        |        |   |   |   |   |   |
|  TOTAL ASSETS                                                                                                                                                                                                           |   | $           | 224,934,830 |   |   | $      | 223,494,662 |   |
|                                                                                                                                                                                                                         |   |        |        |   |   |   |   |   |
| LIABILITIES AND EQUITY                                                                                                                                                                                                       |   |
|                                                                                                                                                                                                                         |   |        |        |   |   |   |   |   |
|  CURRENT LIABILITIES:                                                                                                                                                                                                   |   |        |        |   |   |   |   |   |
|  Short-term loan                                                                                                                                                                                                        |   | $           | -           |   |   | $      | 4,551,000 |   |
|  Line of credit                                                                                                                                                                                                         |   |        | 48,535,609  |   |   |   | - |   |
|  Accounts payable                                                                                                                                                                                                       |   |        | 7,429,565   |   |   |   | 8,783,569 |   |
|  Other payables                                                                                                                                                                                                         |   |        | 3,146,624   |   |   |   | 3,736,931 |   |
|  Unearned revenue                                                                                                                                                                                                       |   |        | 15,602      |   |   |   | 489,241 |   |
|  Accrued expenses                                                                                                                                                                                                       |   |        | 11,311,639  |   |   |   | 6,142,747 |   |
|  Accrued payroll                                                                                                                                                                                                        |   |        | 1,154,654   |   |   |   | 1,163,504 |   |
|  Tax and welfare payable                                                                                                                                                                                                |   |        | 1,078,320   |   |   |   | 1,893,727 |   |
|  Interest payable                                                                                                                                                                                                       |   |        | 18,408      |   |   |   | 121,392 |   |
|  Current portion of long-term debt                                                                                                                                                                                      |   |        | 1,718,108   |   |   |   | 1,703,658 |   |
|  Convertible notes, net of discount of $10,864                                                                                                                                                                          |   |        | -           |   |   |   | 989,136 |   |
|  Liabilities of discontinued operations                                                                                                                                                                                 |   |        | 97,446      |   |   |   | 1,595,805 |   |
|                                                                                                                                                                                                                         |   |        |        |   |   |   |   |   |
|  Total current liabilities                                                                                                                                                                                              |   |        | 74,505,975  |   |   |   | 31,170,710 |   |
|                                                                                                                                                                                                                         |   |        |        |   |   |   |   |   |
|  ACQUISITION NOTE PAYABLE                                                                                                                                                                                               |   |        | 9,621,434   |   |   |   | 9,621,434 |   |
|  LINE OF CREDIT                                                                                                                                                                                                         |   |        | -           |   |   |   | 42,231,176 |   |
|  LONG-TERM DEBT                                                                                                                                                                                                         |   |        | 13,852,537  |   |   |   | 15,024,666 |   |
|                                                                                                                                                                                                                         |   |        |        |   |   |   |   |   |
|  TOTAL LIABILITIES                                                                                                                                                                                                      |   |        | 97,979,946  |   |   |   | 98,047,986 |   |
|                                                                                                                                                                                                                         |   |        |        |   |   |   |   |   |
|  COMMITMENTS AND CONTINGENCIES (Note 11)                                                                                                                                                                                |   |        | -           |   |   |   | - |   |
|                                                                                                                                                                                                                         |   |        |        |   |   |   |   |   |
|  EQUITY:                                                                                                                                                                                                                |   |        |        |   |   |   |   |   |
|     AgFeed stockholders' equity:                                                                                                                                                                         |   |        |        |   |   |   |   |   |
| Common stock, $0.001 per share; 75,000,000 shares authorized;    63,818,757 issued and 63,432,062 outstanding at June 30, 2011    51,756,907 issued and 51,370,212 outstanding at December 31, 2010 |   |        | 63,819      |   |   |   | 51,758 |   |
|  Additional paid-in capital                                                                                                                                                                                             |   |        | 142,581,263 |   |   |   | 125,788,151 |   |
|  Accumulated other comprehensive income                                                                                                                                                                                 |   |        | 10,356,717  |   |   |   | 8,120,628 |   |
|  Statutory reserve                                                                                                                                                                                                      |   |        | 5,644,967   |   |   |   | 5,621,937 |   |
|  Treasury stock (386,695 shares)                                                                                                                                                                                        |   |        | (1,858,942  | )      |   |   | (1,858,942 | ) |
|  Accumulated deficit                                                                                                                                                                                                    |   |        | (29,879,113 | )      |   |   | (12,430,229 | ) |
|  Total AgFeed stockholders' equity                                                                                                                                                                                      |   |        | 126,908,711 |   |   |   | 125,293,303 |   |
|     Noncontrolling interest                                                                                                                                                                              |   |        | 46,173      |   |   |   | 153,373 |   |
|  Total equity                                                                                                                                                                                                           |   |        | 126,954,884 |   |   |   | 125,446,676 |   |
|                                                                                                                                                                                                                         |   |        |        |   |   |   |   |   |
|  TOTAL LIABILITIES AND EQUITY                                                                                                                                                                                           |   | $           | 224,934,830 |   |   | $      | 223,494,662 |   |

----

|                                                             |   | Three Months Ended June 30, |        |   | Six Months Ended June 30, |   |
|------------------------------------------------------------------|--------|-----------------------------|-------------|--------|---------------------------|--------|
|                                                             |   | 2011                        |        |   | 2010                      |   |   | 2011 |   |   | 2010 |   |
|                                                             |   | (unaudited)                 |        |   | (unaudited)               |   |   | (unaudited) |   |   | (unaudited) |   |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |
| Revenues                                                         |   | $                           | 85,397,972  |   |                      | $      | 33,760,376 |   |   | $ | 178,385,171 |   |   | $ | 80,250,232 |   |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Cost of goods sold                                               |   |                        | 77,311,556  |   |                      |   | 30,223,994 |   |   |   | 162,418,653 |   |   |   | 70,841,813 |   |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Gross profit                                                     |   |                        | 8,086,416   |   |                      |   | 3,536,382 |   |   |   | 15,966,518 |   |   |   | 9,408,419 |   |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses                                               |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Selling expenses                                                 |   |                        | 1,086,305   |   |                      |   | 975,823 |   |   |   | 2,072,968 |   |   |   | 1,993,987 |   |
| General and administrative expenses                              |   |                        | 6,187,232   |   |                      |   | 3,642,078 |   |   |   | 11,343,437 |   |   |   | 7,085,249 |   |
| Receivable credit and collection losses                          |   |                        | 14,265,222  |   |                      |   | - |   |   |   | 15,484,448 |   |   |   | - |   |
| Total operating expenses                                         |   |                        | 21,538,759  |   |                      |   | 4,617,901 |   |   |   | 28,900,853 |   |   |   | 9,079,236 |   |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from operations                                    |   |                        | (13,452,343 | )      |                      |   | (1,081,519 | ) |   |   | (12,934,335 | ) |   |   | 329,183 |   |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Non-operating income (expense):                                  |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense)                                           |   |                        | (38,522     | )      |                      |   | 177,453 |   |   |   | (41,238 | ) |   |   | 252,611 |   |
| Interest income                                                  |   |                        | 7,671       |   |                      |   | 36,951  |   |   |   | 22,393 |   |   |   | 84,284 |   |
| Interest and financing costs                                     |   |                        | (995,837    | )      |                      |   | (139,930 | ) |   |   | (1,910,796 | ) |   |   | (264,841 | ) |
| Foreign currency transaction loss                                |   |                        | (4,467      | )      |                      |   | (34,364 | ) |   |   | (14,595 | ) |   |   | (20,561 | ) |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Total non-operating income (expense)                             |   |                        | (1,031,155  | )      |                      |   | 40,110 |   |   |   | (1,944,236 | ) |   |   | 51,493 |   |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Loss from operations before income taxes                         |   |                        | (14,483,498 | )      |                      |   | (1,041,409 | ) |   |   | (14,878,571 | ) |   |   | 380,676 |   |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expense (benefit)                                     |   |                        | (304,244    | )      |                      |   | 641,139 |   |   |   | 234,495 |   |   |   | 1,094,719 |   |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Loss from continuing operations                                  |   |                        | (14,179,254 | )      |                      |   | (1,682,548 | ) |   |   | (15,113,066 | ) |   |   | (714,043 | ) |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Discontinued operations:                                         |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) from discontinued operations (including loss       |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
|   on disposal of $830,200 in 2011)                     |   |                        | (1,744,242  | )      |                      |   | (1,382,165 | ) |   |   | (2,425,287 | ) |   |   | (1,339,446 | ) |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                         |   |                        | (15,923,496 | )      |                      |   | (3,064,713 | ) |   |   | (17,538,353 | ) |   |   | (2,053,489 | ) |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Less: Net loss attributed to noncontrolling interest             |   |                        | (48,466     | )      |                      |   | (109,961 | ) |   |   | (112,499 | ) |   |   | (166,155 | ) |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Net loss attributed to AgFeed                                    |   | $                           | (15,875,030 | )      |                      | $      | (2,954,752 | ) |   | $ | (17,425,854 | ) |   | $ | (1,887,334 | ) |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive loss                                               |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
|      Net loss                           |   | $                           | (15,923,496 | )      |                      | $      | (3,064,713 | ) |   | $ | (17,538,353 | ) |   | $ | (2,053,489 | ) |
|      Foreign currency translation gain  |   |                        | 1,462,945   |   |                      |   | 298,682 |   |   |   | 2,241,388 |   |   |   | 299,446 |   |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive loss                                               |   | $                           | (14,460,551 | )      |                      | $      | (2,766,031 | ) |   | $ | (15,296,965 | ) |   | $ | (1,754,043 | ) |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average shares outstanding :                            |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                            |   |                        | 60,500,355  |   |                      |   | 45,015,351 |   |   |   | 56,964,030 |   |   |   | 44,942,821 |   |
| Diluted                                                          |   |                        | 60,500,355  |   |                      |   | 45,015,351 |   |   |   | 56,964,030 |   |   |   | 44,942,821 |   |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Basic loss per share attributed to AgFeed common stockholders:   |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Continuing operations                                            |   | $                           | (0.23       | )      |                      | $      | (0.03 | ) |   | $ | (0.27 | ) |   | $ | (0.01 | ) |
| Discontinued operations                                          |   |                        | (0.03       | )      |                      | $      | (0.03 | ) |   |   | (0.04 | ) |   | $ | (0.03 | ) |
|                                                             |   | $                           | (0.26       | )      |                      | $      | (0.07 | ) |   | $ | (0.31 | ) |   | $ | (0.04 | ) |
|                                                             |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Diluted loss per share attributed to AgFeed common stockholders: |   |                        |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Continuing operations                                            |   | $                           | (0.23       | )      |                      | $      | (0.03 | ) |   | $ | (0.27 | ) |   | $ | (0.01 | ) |
| Discontinued operations                                          |   |                        | (0.03       | )      |                      | $      | (0.03 | ) |   |   | (0.04 | ) |   | $ | (0.03 | ) |
|                                                             |   | $                           | (0.26       | )      |                      | $      | (0.07 | ) |   | $ | (0.31 | ) |   | $ | (0.04 | ) |

----

|                                                           |   | 2011        |        |   | 2010        |   |
|----------------------------------------------------------------|--------|-------------|-------------|--------|-------------|--------|
|                                                           |   | (unaudited) |        |   | (unaudited) |   |
|                                                           |   |        |        |   |        |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                          |   |        |        |   |        |   |
| Net loss                                                       |   | $           | (17,538,353 | )      |        | $      | (2,053,489 | ) |
| Adjustments to reconcile net loss                              |   |        |        |   |        |   |   |   |
| to net cash used in operating activities:                      |   |        |        |   |        |   |   |   |
| Depreciation                                                   |   |        | 2,743,997   |   |        |   | 1,575,933 |   |
| Amortization of intangible assets                              |   |        | 365,906     |   |        |   | 43,410 |   |
| Loss on sale/disposal of assets                                |   |        | 1,460,937   |   |        |   | 1,321,838 |   |
| Receivable credit and collection losses                        |   |        | 15,484,448  |   |        |   | - |   |
| Stock based compensation                                       |   |        | 14,470      |   |        |   | 150,562 |   |
| Issuance of common stock for services                          |   |        | 770,986     |   |        |   | 751,440 |   |
| Amortization of debt issuance costs                            |   |        | 4,617       |   |        |   | 14,921 |   |
| Amortization of discount on convertible debt                   |   |        | 10,864      |   |        |   | 35,114 |   |
| Change in working capital components                           |   |        |        |   |        |   |   |   |
| Accounts receivable                                            |   |        | (5,849,266  | )      |        |   | (2,945,382 | ) |
| Other receivables                                              |   |        | -           |   |        |   | 618,255 |   |
| Inventory                                                      |   |        | (2,972,764  | )      |        |   | (3,340,955 | ) |
| Advances to suppliers                                          |   |        | 1,713,581   |   |        |   | 885,238 |   |
| Prepaid expenses                                               |   |        | (246,045    | )      |        |   | (59,691 | ) |
| Deferred taxes                                                 |   |        | (173,288    | )      |        |   | - |   |
| Other assets                                                   |   |        | 1,821,147   |   |        |   | - |   |
| Accounts payable                                               |   |        | (2,281,079  | )      |        |   | 610,581 |   |
| Other payables                                                 |   |        | (1,318,111  | )      |        |   | (137,439 | ) |
| Unearned revenue                                               |   |        | (560,326    | )      |        |   | (254,731 | ) |
| Accrued expenses                                               |   |        | 3,997,211   |   |        |   | 58,106 |   |
| Accrued payroll                                                |   |        | (77,073     | )      |        |   | (243,862 | ) |
| Tax and welfare payable                                        |   |        | (841,248    | )      |        |   | 74,277 |   |
| Interest payable                                               |   |        | (103,198    | )      |        |   | 35,195 |   |
|                                                           |   |        |        |   |        |   |   |   |
| Net cash used in operating activities                          |   |        | (3,572,587  | )      |        |   | (2,860,679 | ) |
|                                                           |   |        |        |   |        |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                          |   |        |        |   |        |   |   |   |
| Purchase of property and equipment                             |   |        | (14,729,771 | )      |        |   | (10,759,297 | ) |
| Proceeds from the sale of assets                               |   |        | 315,114     |   |        |   | - |   |
|                                                           |   |        |        |   |        |   |   |   |
| Net cash used in investing activities                          |   |        | (14,414,657 | )      |        |   | (10,759,297 | ) |
|                                                           |   |        |        |   |        |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                          |   |        |        |   |        |   |   |   |
| Proceeds from the sale of common stock                         |   |        | 16,592,625  |   |        |   | - |   |
| Borrowings under line of credit facility, net                  |   |        | 6,304,433   |   |        |   | - |   |
| Payment on convertible notes                                   |   |        | (1,000,000  | )      |        |   | - |   |
| Payment on note payable                                        |   |        | (1,157,679  | )      |        |   | - |   |
| Payment on short-term loan                                     |   |        | (4,587,000  | )      |        |   | - |   |
| Capital contributed by noncontrolling interest                 |   |        | -           |   |        |   | 401,282 |   |
| Purchase of noncontrolling interest in majority owed hog farms |   |        | -           |   |        |   | (406,103 | ) |
|                                                           |   |        |        |   |        |   |   |   |
| Net cash provided by (used in) financing activities            |   |        | 16,152,379  |   |        |   | (4,821 | ) |
|                                                           |   |        |        |   |        |   |   |   |
| Effect of exchange rate changes on cash and cash equivalents   |   |        | 193,785     |   |        |   | 72,133 |   |
|                                                           |   |        |        |   |        |   |   |   |
| NET DECREASE IN CASH & CASH EQUIVALENTS                    |   |        | (1,641,080  | )      |        |   | (13,552,664 | ) |
|                                                           |   |        |        |   |        |   |   |   |
| CASH & CASH EQUIVALENTS, BEGINNING BALANCE                 |   |        | 12,399,916  |   |        |   | 37,580,154 |   |
|                                                           |   |        |        |   |        |   |   |   |
| CASH & CASH EQUIVALENTS, ENDING BALANCE                    |   | $           | 10,758,836  |   |        | $      | 24,027,490 |   |
|                                                           |   |        |        |   |        |   |   |   |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:              |   |        |        |   |        |   |   |   |
| Interest paid, net of amounts capitalized                      |   | $           | 1,998,299   |   |        | $      | 204,969 |   |
| Income taxes paid                                              |   | $           | 1,136,283   |   |        | $      | 492,843 |   |

----

----

| Balance, December 31, 2010           |   | $      | 707,968    |   |
|--------------------------------------|--------|--------|------------|--------|
|                                 |   |   |       |   |
| Additions                            |   |   | 15,484,448 |   |
|                                 |   |   |       |   |
| Write-offs of uncollectible accounts |   |   | (9,147,649 | )      |
| Balance, June 30, 2011          |   | $      | 7,044,767  |   |

----

|                        |   | June 30,2011 |       |   | December 31,2010 |   |
|-----------------------------|--------|--------------|------------|--------|------------------|--------|
|                        |   |         |       |   |             |   |
| Raw material                |   | $            | 11,125,948 |   |             | $      | 11,691,635 |   |
| Work in process             |   |         | 149,341    |   |             |   | 160,007 |   |
| Finished goods – feed |   |         | 53,048     |   |             |   | 810,786 |   |
| Hogs                        |   |         | 76,613,888 |   |             |   | 68,717,221 |   |
| Total                       |   | $            | 87,942,225 |   |             | $      | 81,379,649 |   |

| Office equipment       | 1 to 5 years            |
|------------------------|-------------------------|
| Operating equipment    |  1 to10 years |
| Vehicles               | 5 years                 |
| Swine for reproduction | 2 to 3.5 years     |
| Buildings              | 20 to 40 years          |

|                          |   | June 30, |       |   | December 31, |   |
|-------------------------------|--------|----------|------------|--------|--------------|--------|
|                          |   | 2011     |       |   | 2010         |   |
|                          |   |     |       |   |         |   |
| Office equipment              |   | $        | 1,020,845  |   |         | $      | 983,992 |   |
| Operating equipment           |   |     | 17,300,906 |   |         |   | 13,945,244 |   |
| Vehicles                      |   |     | 1,279,784  |   |         |   | 994,686 |   |
| Swine for reproduction        |   |     | 19,857,311 |   |         |   | 10,830,812 |   |
| Land                          |   |     | 915,956    |   |         |   | 752,500 |   |
| Buildings                     |   |     | 40,497,522 |   |         |   | 29,165,246 |   |
| Construction-in-process       |   |     | 4,373,390  |   |         |   | 11,888,319 |   |
| Total                         |   |     | 85,245,714 |   |         |   | 68,560,799 |   |
|                          |   |     |       |   |         |   |   |   |
| Less accumulated depreciation |   |     | (8,497,540 | )      |         |   | (4,929,575 | ) |
|                          |   |     |       |   |         |   |   |   |
|                          |   | $        | 76,748,174 |   |         | $      | 63,631,224 |   |

----

|                          |   | June 30, |      |   | December 31, |   |
|-------------------------------|--------|----------|-----------|--------|--------------|--------|
|                          |   | 2011     |      |   | 2010         |   |
|                          |   |     |      |   |         |   |
| Right to use land             |   | $        | 796,729   |   |         | $      | 781,278 |   |
| Customer relationships        |   |     | 4,679,158 |   |         |   | 4,835,195 |   |
| Computer software             |   |     | 509,772   |   |         |   | 478,988 |   |
| Total                         |   |     | 5,985,659 |   |         |   | 6,095,461 |   |
|                          |   |     |      |   |         |   |   |   |
| Less Accumulated amortization |   |     | (545,951  | )      |         |   | (312,359 | ) |
|                          |   |     |      |   |         |   |   |   |
| Intangibles, net              |   | $        | 5,439,708 |   |         | $      | 5,783,102 |   |

----

|                        |   | Animal    |      |   | Hog Production |   |       |        |   |
|-----------------------------|--------|-----------|-----------|--------|----------------|--------|------------|-------------|--------|
|                        |   | Nutrition |      |   | China          |   |       | U.S. (M2P2) |   |   | Total |   |
|                        |   |      |      |   |           |   |       |        |   |   |   |   |
| Balance, December 31, 2010  |   | $         | 2,437,135 |   |           | $      | 19,602,279 |        |   | $ | 326,000 |   |   | $ | 22,365,414 |   |
| Foreign currency adjustment |   |      | 48,197    |   |           |   | 387,651    |        |   |   | - |   |   |   | 435,848 |   |
| Balance, June 30, 2011      |   | $         | 2,485,332 |   |           | $      | 19,989,930 |        |   | $ | 326,000 |   |   | $ | 22,801,262 |   |

----

----

|                                          |   | 2011   |       |   | 2010      |   |
|-----------------------------------------------|--------|--------|------------|--------|-----------|--------|
|                                          |   |   |       |   | Per Share |   |   |   |   |   | Per Share |   |
|                                          |   | Shares |       |   | Amount    |   |   | Shares |   |   | Amount |   |
| Basic  earnings per share           |   |   | 60,500,355 |   |      | $      | (0.26 | ) |   |   | 45,015,351 |   |   | $ | (0.07 | ) |
| Effect of dilutive stock options and warrants |   |   | -          |   |      |   | - |   |   |   | - |   |   |   | - |   |
|                                          |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Diluted earnings per share                    |   |   | 60,500,355 |   |      | $      | (0.26 | ) |   |   | 45,015,351 |   |   | $ | (0.07 | ) |

|                                          |   | 2011   |       |   | 2010      |   |
|-----------------------------------------------|--------|--------|------------|--------|-----------|--------|
|                                          |   |   |       |   | Per Share |   |   |   |   |   | Per Share |   |
|                                          |   | Shares |       |   | Amount    |   |   | Shares |   |   | Amount |   |
| Basic  earnings per share           |   |   | 56,964,030 |   |      | $      | (0.31 | ) |   |   | 44,942,821 |   |   | $ | (0.04 | ) |
| Effect of dilutive stock options and warrants |   |   | -          |   |      |   | - |   |   |   | - |   |   |   | - |   |
|                                          |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Diluted earnings per share                    |   |   | 56,964,030 |   |      | $      | (0.31 | ) |   |   | 44,942,821 |   |   | $ | (0.04 | ) |

----

|   | · | Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|

|   | · | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

|   | · | derivative liability of $896,000 and $980,000 at June 30, 2011 and December 31, 2010, respectively, consisting of exchange traded commodity futures contracts valued using Level 1 inputs. The fair value measurements are determined by quoted market prices from the Chicago Board of Trade (CBOT). |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | derivative asset of $0 and $1,094,000 at June 30, 2011 and December 31, 2010, respectively, consisting of fixed price forward purchase contracts valued using Level 2 inputs. The fair value measurements are based on observable data for similar assets as well as quoted market prices from the CBOT. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                     |   | June 30, |   |   | December 31, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|--------|--------------|--------|
|                                                                                                                                                                                                                                                                                                     |   | 2011     |   |   | 2010         |   |
|                                                                                                                                                                                                                                                                                                     |   |     |   |   |         |   |
| Short-term bank loan payable to Shanghai Pudong Development Bank.  The loan accrues interest at 5.84%.  The note was renewed in May 2010 and is due May 4, 2011 (The loan was paid off in full in May 2011).  The loan is collateralized by buildings and land use rights. |   | $        | -      |   |         | $      | 4,551,000 |   |

----

|                                                                                                                                                                                                                                                                                                                |   | 2011   |       |   | 2010   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                                                                                                                                                                                                                                                                                                |   |   |       |   |   |   |   |   |
| Note payable, bearing interest at the prime rate plus 2% (5.25% at June 30, 2011) and payable on November 25, 2018. The note is secured by the M2P2’s 100% interest in Heritage Farms LLC and is subordinated to certain senior debt.                                                                         |   | $      | 3,500,000  |   |   | $      | 3,500,000 |   |
|                                                                                                                                                                                                                                                                                                                |   |   |       |   |   |   |   |   |
| Senior term loan - $6 million; bears interest at 5.0%; quarterly installments of $250,000 plus interest with remaining balance is due April 1, 2013. (A)                                                                                                                                                            |   |   | 5,000,000  |   |   |   | 5,750,000 |   |
|                                                                                                                                                                                                                                                                                                                |   |   |       |   |   |   |   |   |
| Senior term loan - $7.6 million; $5.8 million of the loan bears interest at 5.0% and the $1.4 million remaining balance bears interest at the 3-month LIBOR plus 1.75% (2.05% at June 30, 2011); payments are due in monthly installments of approximately $85,000. The remaining balance is due March 1, 2020. (A) |   |   | 7,070,645  |   |   |   | 7,478,324 |   |
|                                                                                                                                                                                                                                                                                                                |   |   | 15,570,645 |   |   |   | 16,728,324 |   |
|                                                                                                                                                                                                                                                                                                                |   |   |       |   |   |   |   |   |
| Less current portion                                                                                                                                                                                                                                                                                                |   |   | (1,718,108 | )      |   |   | (1,703,658 | ) |
|                                                                                                                                                                                                                                                                                                                |   |   |       |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                |   | $      | 13,852,537 |   |   | $      | 15,024,666 |   |

----

|   | (A) | These borrowings are collateralized by substantially all of the assets of M2P2 and have various restrictive covenants, including, but not limited to, certain restrictions on distributions, maintenance of a minimum net worth and other financial covenant requirements. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | i. | Making up cumulative prior years’ losses, if any; |
|--------|----|---------------------------------------------------------|

|   | ii. | Allocations to the “Statutory surplus reserve” of at least 10% of income after tax, as determined under PRC accounting rules and regulations, until the fund amounts to 50% of the Company’s registered capital; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | iii. | Allocations of 5-10% of income after tax, as determined under PRC accounting rules and regulations, to the Company’s “Statutory common welfare fund”, which is established for the purpose of providing employee facilities and other collective benefits to the Company’s employees; and |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | iv. | Allocations to the discretionary surplus reserve, if approved in the stockholders’ general meeting. |
|--------|-----|-----------------------------------------------------------------------------------------------------------|

----

|                           |   | Optionsoutstanding |    |   | WeightedAverageExercisePrice |   |   | Weightedaverageremainingcontractual life |   |   | AggregateIntrinsic Value |   |
|--------------------------------|--------|--------------------|---------|--------|------------------------------|--------|--------|------------------------------------------|--------|--------|--------------------------|--------|
|                           |   |               |    |   |                         |   |   |                                     |   |   |                     |   |
| Outstanding, December 31, 2010 |   |               | 185,000 |   |                         | $      | 8.96   |                                     |   |   | 2.71                     |   |   | $ | - |   |
| Granted                        |   |               | -       |   |                         |   | -      |                                     |   |   |                     |   |   |   |   |   |
| Forfeited                      |   |               | -       |   |                         |   | -      |                                     |   |   |                     |   |   |   |   |   |
| Exercised                      |   |               | -       |   |                         |   | -      |                                     |   |   |                     |   |   |   |   |   |
| Outstanding, June 30, 2011     |   |               | 185,000 |   |                         | $      | 8.96   |                                     |   |   | 2.20                     |   |   | $ | - |   |
|                           |   |               |    |   |                         |   |   |                                     |   |   |                     |   |   |   |   |   |
| Exercisable, June 30, 2011     |   |               | 175,000 |   |                         | $      | 8.94   |                                     |   |   | 2.20                     |   |   | $ | - |   |

| Number ofOptions   |   |   | ExercisePrice |   |
|--------------------|--------|--------|---------------|--------|
| 10,000             |   |   | $             | 3.30   |   |
|   15,000 |   |   | $             | 8.85   |   |
| 160,000            |   |   | $             | 9.32   |   |
| 185,000            |   |   |          |   |   |

|                           |   | Warrantsoutstanding |      |   | WeightedAverageExercisePrice |   |   | Weightedaverageremainingcontractual life |   |   | AggregateIntrinsic Value |   |
|--------------------------------|--------|---------------------|-----------|--------|------------------------------|--------|--------|-----------------------------------------------|--------|--------|--------------------------|--------|
|                           |   |                |      |   |                         |   |   |                                          |   |   |                     |   |
| Outstanding, December 31, 2010 |   |                | 2,204,435 |   |                         | $      | 4.03   |                                          |   |   | 2.42                     |   |   | $ | 253,000 |   |
| Granted                        |   |                | -         |   |                         |   | -      |                                          |   |   |                     |   |   |   |   |   |
| Forfeited/canceled             |   |                | (220,000  | )      |                         | $      | 5.00   |                                          |   |   |                     |   |   |   |   |   |
| Exercised                      |   |                | -         |   |                         |   | -      |                                          |   |   |                     |   |   |   |   |   |
| Outstanding, June 30, 2011     |   |                | 1,984,435 |   |                         | $      | 3.92   |                                          |   |   | 2.18                     |   |   | $ | - |   |
|                           |   |                |      |   |                         |   |   |                                          |   |   |                     |   |   |   |   |   |
| Exercisable, June 30, 2011     |   |                | 1,984,435 |   |                         | $      | 3.92   |                                          |   |   | 2.18                     |   |   | $ | - |   |

----

| Number ofWarrants |   |   | Exercise Price |   |
|-------------------|--------|--------|---------------------|--------|
| 575,000           |   |   | $                   | 2.50   |   |
| 1,409,435         |   |   | $                   | 4.50   |   |
| 1,984,435         |   |   |                |   |   |

|                             |   | Three Months Ended June 30, |       |   | Six Months Ended June 30, |   |
|----------------------------------|--------|-------------------------------------------------|------------|--------|-----------------------------------------------|--------|
|                             |   | 2011                                            |       |   | 2010                                          |   |   | 2011 |   |   | 2010 |   |
|                             |   |                                            |       |   |                                          |   |   |   |   |   |   |   |
| Revenues from unrelated entities |   |                                            |       |   |                                          |   |   |   |   |   |   |   |
| Animal feed nutrition            |   | $                                               | 16,741,242 |   |                                          | $      | 26,369,201 |   |   | $ | 40,949,913 |   |   | $ | 50,658,950 |   |
| Hog production - United States   |   |                                            | 54,842,557 |   |                                          |   | - |   |   |   | 112,726,981 |   |   |   | - |   |
| Hog production - China           |   |                                            | 13,814,173 |   |                                          |   | 7,391,175 |   |   |   | 24,708,277 |   |   |   | 29,591,282 |   |
| Western style hog farms          |   |                                            | -          |   |                                          |   | - |   |   |   | - |   |   |   | - |   |
| Holding Company                  |   |                                            | -          |   |                                          |   | - |   |   |   | - |   |   |   | - |   |
|                             |   | $                                               | 85,397,972 |   |                                          | $      | 33,760,376 |   |   | $ | 178,385,171 |   |   | $ | 80,250,232 |   |
|                             |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Intersegment revenues            |   |                                            |       |   |                                          |   |   |   |   |   |   |   |   |   |   |   |
| Animal feed nutrition            |   | $                                               | 3,527,492  |   |                                          | $      | 1,721,014 |   |   | $ | 7,550,791 |   |   | $ | 5,490,936 |   |
| Hog production - United States   |   |                                            | -          |   |                                          |   | - |   |   |   | - |   |   |   | - |   |
| Hog production - China           |   |                                            | 665,116    |   |                                          |   | 1,267,008 |   |   |   | 1,222,267 |   |   |   | 1,784,139 |   |
| Western style hog farms          |   |                                            | -          |   |                                          |   | - |   |   |   | - |   |   |   | - |   |
| Holding Company                  |   |                                            | -          |   |                                          |   | - |   |   |   | - |   |   |   | - |   |
|                             |   | $                                               | 4,192,608  |   |                                          | $      | 2,988,022 |   |   | $ | 8,773,058 |   |   | $ | 7,275,075 |   |

----

| Total revenues                 |   |   |        |   |   |   |       |   |   |   |        |   |   |   |       |   |
|--------------------------------|--------|--------|-------------|--------|--------|--------|------------|--------|--------|--------|-------------|--------|--------|--------|------------|--------|
| Animal feed nutrition          |   | $      | 20,268,734  |   |   | $      | 28,090,215 |   |   | $      | 48,500,704  |   |   | $      | 56,149,886 |   |
| Hog production - United States |   |   | 54,842,557  |   |   |   | -          |   |   |   | 112,726,981 |   |   |   | -          |   |
| Hog production - China         |   |   | 14,479,289  |   |   |   | 8,658,183  |   |   |   | 25,930,544  |   |   |   | 31,375,421 |   |
| Western style hog farms        |   |   | -           |   |   |   | -          |   |   |   | -           |   |   |   | -          |   |
| Holding Company                |   |   | -           |   |   |   | -          |   |   |   | -           |   |   |   | -          |   |
| Less Intersegment revenues     |   |   | (4,192,608  | )      |   |   | (2,988,022 | )      |   |   | (8,773,058  | )      |   |   | (7,275,075 | )      |
|                           |   | $      | 85,397,972  |   |   | $      | 33,760,376 |   |   | $      | 178,385,171 |   |   | $      | 80,250,232 |   |
|                           |   |   |        |   |   |   |       |   |   |   |        |   |   |   |       |   |
| Gross profit                   |   |   |        |   |   |   |       |   |   |   |        |   |   |   |       |   |
| Animal feed nutrition          |   | $      | 2,126,593   |   |   | $      | 4,768,663  |   |   | $      | 4,552,636   |   |   | $      | 9,232,737  |   |
| Hog production - United States |   |   | 3,417,038   |   |   |   | -          |   |   |   | 7,801,606   |   |   |   | -          |   |
| Hog production - China         |   |   | 2,542,785   |   |   |   | (1,232,281 | )      |   |   | 3,612,276   |   |   |   | 175,682    |   |
| Western style hog farms        |   |   | -           |   |   |   | -          |   |   |   | -           |   |   |   | -          |   |
| Holding Company                |   |   | -           |   |   |   | -          |   |   |   | -           |   |   |   | -          |   |
|                           |   | $      | 8,086,416   |   |   | $      | 3,536,382  |   |   | $      | 15,966,518  |   |   | $      | 9,408,419  |   |
|                           |   |   |        |   |   |   |       |   |   |   |        |   |   |   |       |   |
| Income (loss) from operations  |   |   |        |   |   |   |       |   |   |   |        |   |   |   |       |   |
| Animal feed nutrition          |   | $      | (14,227,226 | )      |   | $      | 2,962,810  |   |   | $      | (15,062,722 | )      |   | $      | 5,630,163  |   |
| Hog production - United States |   |   | 2,530,419   |   |   |   | -          |   |   |   | 6,175,862   |   |   |   | -          |   |
| Hog production - China         |   |   | 1,309,764   |   |   |   | (2,755,218 | )      |   |   | 1,170,518   |   |   |   | (2,525,857 | )      |
| Western style hog farms        |   |   | (770,045    | )      |   |   | (314,699   | )      |   |   | (1,068,439  | )      |   |   | (531,822   | )      |
| Holding Company                |   |   | (2,295,255  | )      |   |   | (974,412   | )      |   |   | (4,149,554  | )      |   |   | (2,243,301 | )      |
|                           |   | $      | (13,452,343 | )      |   | $      | (1,081,519 | )      |   | $      | (12,934,335 | )      |   | $      | 329,183    |   |
|                           |   |   |        |   |   |   |       |   |   |   |        |   |   |   |       |   |
| Interest income                |   |   |        |   |   |   |       |   |   |   |        |   |   |   |       |   |
| Animal feed nutrition          |   | $      | 1,602       |   |   | $      | 22,738     |   |   | $      | 4,601       |   |   | $      | 56,181     |   |
| Hog production - United States |   |   | -           |   |   |   | -          |   |   |   | -           |   |   |   | -          |   |
| Hog production - China         |   |   | 5,439       |   |   |   | 8,187      |   |   |   | 16,442      |   |   |   | 14,099     |   |
| Western style hog farms        |   |   | -           |   |   |   | 1,382      |   |   |   | -           |   |   |   | 1,382      |   |
| Holding Company                |   |   | 630         |   |   |   | 4,644      |   |   |   | 1,350       |   |   |   | 12,622     |   |
|                           |   | $      | 7,671       |   |   | $      | 36,951     |   |   | $      | 22,393      |   |   | $      | 84,284     |   |
|                           |   |   |        |   |   |   |       |   |   |   |        |   |   |   |       |   |
| Interest and financing costs   |   |   |        |   |   |   |       |   |   |   |        |   |   |   |       |   |
| Animal feed nutrition          |   | $      | 25,536      |   |   | $      | 97,079     |   |   | $      | 96,240      |   |   | $      | 179,611    |   |
| Hog production - United States |   |   | 760,292     |   |   |   | -          |   |   |   | 1,384,970   |   |   |   | -          |   |
| Hog production - China         |   |   | 17,580      |   |   |   | -          |   |   |   | 17,580      |   |   |   | -          |   |
| Western style hog farms        |   |   | -           |   |   |   | -          |   |   |   | -           |   |   |   | -          |   |
| Holding Company                |   |   | 192,429     |   |   |   | 42,851     |   |   |   | 412,006     |   |   |   | 85,230     |   |
|                           |   | $      | 995,837     |   |   | $      | 139,930    |   |   | $      | 1,910,796   |   |   | $      | 264,841    |   |

----

| Income tax expense (benefit)   |   |   |     |   |   |   |    |   |   |   |    |   |   |   |      |   |
|--------------------------------|--------|--------|----------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|-----------|--------|
| Animal feed nutrition          |   | $      | 82,523   |   |   | $      | 641,139 |   |   | $      | 217,377 |   |   | $      | 1,094,719 |   |
| Hog production - United States |   |   | -        |   |   |   | -       |   |   |   | -       |   |   |   | -         |   |
| Hog production - China         |   |   | -        |   |   |   | -       |   |   |   | -       |   |   |   | -         |   |
| Western style hog farms        |   |   | -        |   |   |   | -       |   |   |   | -       |   |   |   | -         |   |
| Holding Company                |   |   | (386,767 | )      |   |   | -       |   |   |   | 17,118  |   |   |   | -         |   |
|                           |   | $      | (304,244 | )      |   | $      | 641,139 |   |   | $      | 234,495 |   |   | $      | 1,094,719 |   |
|                           |   |   |     |   |   |   |    |   |   |   |    |   |   |   |      |   |

| Net income (loss)                    |   |          |        |   |              |   |        |   |   |   |        |   |   |   |       |   |
|--------------------------------------|--------|---------------|-------------|--------|-------------------|--------|-------------|--------|--------|--------|-------------|--------|--------|--------|------------|--------|
| Animal feed nutrition                |   | $             | (14,375,746 | )      |              | $      | 2,264,097   |   |   | $      | (15,404,509 | )      |   | $      | 4,437,740  |   |
| Hog production - United States       |   |          | 1,770,127   |   |              |   | -           |   |   |   | 4,790,892   |   |   |   | -          |   |
| Hog production - China               |   |          | 1,350,080   |   |              |   | (2,592,928  | )      |   |   | 1,261,605   |   |   |   | (2,275,618 | )      |
| Western style hog farms              |   |          | (770,045    | )      |              |   | (231,137    | )      |   |   | (1,061,239  | )      |   |   | (394,101   | )      |
| Holding Company                      |   |          | (2,105,204  | )      |              |   | (1,012,619  | )      |   |   | (4,587,316  | )      |   |   | (2,315,909 | )      |
| Discontinued operations              |   |          | (1,744,242  | )      |              |   | (1,382,165  | )      |   |   | (2,425,287  | )      |   |   | (1,339,446 | )      |
|                                 |   | $             | (15,875,030 | )      |              | $      | (2,954,752  | )      |   | $      | (17,425,854 | )      |   | $      | (1,887,334 | )      |
|                                 |   |          |        |   |              |   |        |   |   |   |        |   |   |   |       |   |
| Provision for depreciation           |   |          |        |   |              |   |        |   |   |   |        |   |   |   |       |   |
| Animal feed nutrition                |   | $             | 215,394     |   |              | $      | 112,394     |   |   | $      | 457,125     |   |   | $      | 219,436    |   |
| Hog production - United States       |   |          | 435,968     |   |              |   | -           |   |   |   | 927,317     |   |   |   | -          |   |
| Hog production - China               |   |          | 594,073     |   |              |   | 651,640     |   |   |   | 1,359,555   |   |   |   | 1,356,497  |   |
|                                 |   | $             | 1,245,435   |   |              | $      | 764,034     |   |   | $      | 2,743,997   |   |   | $      | 1,575,933  |   |
|                                 |   |          |        |   |              |   |        |   |   |   |        |   |   |   |       |   |
|                                 |   | As of    |        |   | As of        |   |        |   |   |   |        |   |   |   |
|                                 |   | June 30, |        |   | December 31, |   |        |   |   |   |        |   |   |   |
|                                 |   | 2011          |        |   | 2010              |   |        |   |   |   |        |   |   |   |
| Total assets                         |   |          |        |   |              |   |        |   |   |   |        |   |   |   |       |   |
| Animal feed nutrition                |   | $             | 26,315,368  |   |              | $      | 42,783,939  |   |   |   |        |   |   |   |       |   |
| Hog production - United States       |   |          | 108,565,414 |   |              |   | 94,369,142  |   |   |   |        |   |   |   |       |   |
| Hog production - China               |   |          | 63,295,409  |   |              |   | 58,918,591  |   |   |   |        |   |   |   |       |   |
| Western style hog farms              |   |          | 22,676,520  |   |              |   | 15,162,473  |   |   |   |        |   |   |   |       |   |
| Holding Company                      |   |          | 4,082,119   |   |              |   | 5,966,993   |   |   |   |        |   |   |   |       |   |
| Discontinued operations              |   |          | -           |   |              |   | 6,293,524   |   |   |   |        |   |   |   |       |   |
|                                 |   | $             | 224,934,830 |   |              | $      | 223,494,662 |   |   |   |        |   |   |   |       |   |
|                                 |   |          |        |   |              |   |        |   |   |   |        |   |   |   |       |   |
| Goodwill                             |   |          |        |   |              |   |        |   |   |   |        |   |   |   |       |   |
| Animal feed nutrition                |   | $             | 2,485,332   |   |              | $      | 2,437,135   |   |   |   |        |   |   |   |       |   |
| Hog production - United States       |   |          | 326,000     |   |              |   | 326,000     |   |   |   |        |   |   |   |       |   |
| Hog production - China               |   |          | 19,989,930  |   |              |   | 19,602,279  |   |   |   |        |   |   |   |       |   |
| Western style hog farms              |   |          | -           |   |              |   | -           |   |   |   |        |   |   |   |       |   |
| Holding Company                      |   |          | -           |   |              |   | -           |   |   |   |        |   |   |   |       |   |
|                                 |   | $             | 22,801,262  |   |              | $      | 22,365,414  |   |   |   |        |   |   |   |       |   |
|                                 |   |          |        |   |              |   |        |   |   |   |        |   |   |   |       |   |
| Long-term asset by geographic region |   |          |        |   |              |   |        |   |   |   |        |   |   |   |       |   |
| United States                        |   | $             | 33,163,638  |   |              | $      | 29,581,577  |   |   |   |        |   |   |   |       |   |
| China                                |   |          | 76,443,092  |   |              |   | 67,995,469  |   |   |   |        |   |   |   |       |   |
|                                 |   | $             | 109,606,730 |   |              | $      | 97,577,046  |   |   |   |        |   |   |   |       |   |

----

|                           |   | Three Months Ended June 30, |       |   | Six Months Ended June 30, |   |
|--------------------------------|--------|-------------------------------------------------|------------|--------|-----------------------------------------------|--------|
|                           |   | 2011                                            |       |   | 2010                                          |   |   | 2011 |   |   | 2010 |   |
|                           |   |                                            |       |   |                                          |   |   |   |   |   |   |   |
| Revenues                       |   | $                                               | 660,619    |   |                                          | $      | 3,901,579 |   |   | $ | 2,791,028 |   |   | $ | 10,270,790 |   |
| Cost of goods sold             |   |                                            | 2,621,784  |   |                                          |   | 4,878,683 |   |   |   | 4,576,498 |   |   |   | 10,800,649 |   |
| Gross profit                   |   |                                            | (1,961,165 | )      |                                          |   | (977,104 | ) |   |   | (1,785,470 | ) |   |   | (529,859 | ) |
| Operating expenses             |   |                                            | 257,884    |   |                                          |   | 307,966 |   |   |   | 887,003 |   |   |   | 640,756 |   |
| Loss from operations           |   |                                            | (2,219,049 | )      |                                          |   | (1,285,070 | ) |   |   | (2,672,473 | ) |   |   | (1,170,615 | ) |
| Non-operating income (expense) |   |                                            | 474,807    |   |                                          |   | (97,095 | ) |   |   | 247,186 |   |   |   | (168,831 | ) |
| Loss before taxes              |   |                                            | (1,744,242 | )      |                                          |   | (1,382,165 | ) |   |   | (2,425,287 | ) |   |   | (1,339,446 | ) |
| Income tax expense             |   |                                            | -          |   |                                          |   | - |   |   |   | - |   |   |   | - |   |
| Net loss                       |   | $                                               | (1,744,242 | )      |                                          | $      | (1,382,165 | ) |   | $ | (2,425,287 | ) |   | $ | (1,339,446 | ) |

|                |   | June 30, |   |   | December 31, |   |
|---------------------|--------|----------|--------|--------|--------------|--------|
|                |   | 2011     |   |   | 2010         |   |
|                |   |     |   |   |         |   |
| Current assets      |   | $        | -      |   |         | $      | 3,271,226 |   |
| Long-term assets    |   |     | -      |   |         |   | 3,022,298 |   |
|                |   | $        | -      |   |         | $      | 6,293,524 |   |
|                |   |     |   |   |         |   |   |   |
| Current liabilities |   | $        | 97,446 |   |         | $      | 1,595,805 |   |

----

| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|---------|---------------------------------------------------------------------------------------------|

|   | · | We believe there is a growing demand by commercial hog producers for concentrates and complete feeds as they modernize their production technology, react to increasing commodity cost and focus on the requirements of the food safety laws. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The primary ingredient in concentrates is soybean meal.  By adding corn to a concentrate mix, we produce complete feeds.  For the most part, soybean meal is an imported product in China, while corn is primarily domestically produced in China but with increasing reliance on external sources to meet increasing demands.  Accordingly, our operations are impacted by market-driven events such as costs for soybean meal and corn as well as our ability to pass along increased costs to our customers. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | The feed market in China is competitive, and product pricing is a principal determining factor in the purchase of feed by hog producers. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Continued operating pressures, such as contending with high ingredient and increasing labor costs, has placed significant financial pressure on hog producers leading to deteriorating credit quality.  As a result, we incurred a non-cash charge of $14.3 million to our earnings in the quarter ended June 30, 2011.  This non-cash charge equates to a $9.2 million expense related to the collection of outstanding accounts receivable and an increase of $5.1 million to our bad debt provision. These charges correspondingly reduced our accounts receivable balance $14.3 million. Our accounts receivable is $13.2 million at June 30, 2011. This balance is $15.4 million less than the balance at March 31, 2011 and $8.6 million less than the balance at December 31, 2010. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Further, with these actions and the general market conditions, our customer base has declined 12% in 2011 in response to our collection actions, exited hog production operations or sought out lower priced feed from other sources.  In response: |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | In July 2011, management approved the creation of a feed ingredient-trading department in Nanning, Guangxi Province within the China-Asian Trade Area offering us tariff exemption.  The initial investment will be approximately $300,000, and allow this new department to secure an initial line of credit of $150,000 to purchase feed ingredients, expand AgFeed’s purchasing channels and purchase volume to lower raw material costs for our manufacturing operations in Guangxi and Hainan provinces. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Develop and introduce formulations using alternative ingredients such as dried distillers grains. |
|--------|---|---------------------------------------------------------------------------------------------------|

|   | o | Enhance technical service support to our customers. |
|--------|---|-----------------------------------------------------|

|   | · | Presently, approximately 15% - 20% of our feed production is dedicated to our affiliated hog production-operating segment and the Western style farms, designed to support our Western style farms. we are operating and constructing in China.  We believe that we can more efficiently serve these facilities through a dedicated operation.  As a result, and in conjunction with present market conditions, we have withdrawn our Registration Statement on Form F-1 filed with the SEC related to the carve-out of this business unit as a separate public entity.  Finally, we no longer consider our animal feed nutrition operating segment a core asset: and we will consider a range of strategic alternatives. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We are subject to market related risks of supply and demand events that impact both our revenues and our costs of production.  Presently, market prices for hogs are at historical highs, while the cost of feed is similarly at historically high levels.  Given each are generally moving in concert, we focus on our margins from period to period as compared to focusing on either revenues or costs. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | With closure of the poorest performing farms and our focus on the remaining farms, we are progressing in our efforts to transition our operations to becoming a low-cost producer with consistent production flows of market hogs.  Our operations are now receiving direct benefit from U.S. management oversight and implementation of processes and metrics under which our US hog production has operated. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Primarily benefitting from strong hog prices, which have expanded our gross margin, our current quarter operating income exceeded $1.3 million compared to an operating loss of $139,000 in the quarter ended March 31, 2011. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | With respect to the farms designated for closure within our remaining operating segments, reaching settlements regarding our remaining lease obligations have concluded, except for one farm, which is at a point of impasse as both parties review their respective position with respect to the outstanding lease obligations. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Due to unsuccessful lease renewal negotiations at a farm in Guangxi Province, we took a charge to earnings of $793,000 during the quarter to write-off long-term assets at that facility.  We moved our breeding herd to one of the Guangxi farms we previously impaired and designated for closure, which resulted in a charge to earnings of $757,000 in 2010.  In making this "swap," we re-established use of comparable assets previously written off and secured more favorable lease terms.  However, since U.S. GAAP does not allow reinstatement of previously impaired assets, we are not able to offset the current charge to earnings by reversing the prior charge.  |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Longer-term, our focus on production costs will not eliminate fluctuations in operating income or loss from quarter to quarter but are intended to reduce some of the risks and volatility associated with commodity-based inputs and outputs. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Pork is a key component of China’s Consumer Price Index (“CPI”) causing the Central Government to focus directly on pork prices.  To this end, certain actions are taken periodically including the release of frozen pork from their reserves (though immaterial from a consumption point of view) and various incentives and programs from time-to-time to influence the size of the sow-breeding base in China. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The results of operations reflect costs of closing down these operations. |
|--------|--------|---------------------------------------------------------------------------|

|   | · | To date, for the farms identified for closure, we have either depopulated the farms or transferred operations through negotiated settlements.  Of the depopulated farms, we have one remaining where final closure negotiations have reached an impasse.  At this time, we are assessing the merits of claims and counterclaims that have been asserted in the course of our negotiations. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | One major customer accounts for substantially all of the revenues. |
|--------|--------|--------------------------------------------------------------------|

|   | · | Our operations are conducted under what can be generally characterized as a cost plus agreement, which allows us to focus on what we do best—manage production risk with the customer assuming what we term market risk (fluctuations in the price for a market hog).  By removing the market risk, this agreement substantially removes the market-price risks and rewards from our earnings.  For us, this means maximizing production output and managing costs are the primary drivers of our profitability, which additionally has a leveling effect during the course of a calendar year causing us generally to experience higher earnings in the first half of a calendar period than the latter. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | M2P2 is a recognized U.S. leader in hog production metrics.  Not only do we benefit from these disciplines in our U.S. production, but also their personnel have managed and overseen the development of our Western style farms in China.  Additionally, from the first quarter of 2011, we have initiated a process to leverage their management and production skills in our Hog Production—China operations. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Debt financing is a key component in conducting operations.  Working capital is funded by a line of credit, which fluctuates based on operational needs and is subject to loan covenants.  As a result, interest expense from period-to-period will also fluctuate. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Secure financing necessary to complete the acquisitions of PRF and KCS and to continue to fund the construction and working capital needs of our Western style hog farms in China. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Attract, develop and maintain customers seeking comparatively large and steady flows of processed pork and pork products for export or sale into the China and Southeast Asian markets. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Transfer our proven operating skills as a U.S.-based low cost hog producer to our Western style hog production operations in China with responsible environmental sensitivities. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The acquisition and retention of talented management teams to integrate processes, procedures and systems as we acquire or establish new operations. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Animal feed nutrition segment experienced an operating loss of $14.2 million versus a profit of $3.0 million in the comparative period of 2010.  The primary drivers were credit and collection losses, reduced sales due to lower sow and hog inventories held by our customers and higher costs of raw materials. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Hog Production—China segment showed an operating profit of $1.3 million versus a loss of $2.8 million in the quarter ended June 30, 2010 due to substantially higher live hog prices, which offset higher raw material costs and the write-off of the long-term assets at an abandoned farm.  The 2010 results also reflected unusual costs due to severe flooding. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Hog Production—United States segment showed an operating profit of $2.5 million.  These results are $1.1 million lower than the first quarter of 2011 due to slower growth rates, as a result of warm weather, reducing the number of our marketed hogs as well as leveling measures in our marketing agreement, which favored our first quarter of the calendar year. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Western style hog farms (China) segment incurred an operating loss of $770,000 primarily reflecting administrative costs associated with our Nanning office and non-capitalizable costs of bringing our Dahua farm online and overseeing construction activities at Xinyu. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Animal Feed Nutrition—We anticipate rising feed prices going forward primarily in light of China’s ongoing challenges in grain production.  Limited arable land, antiquated agricultural infrastructure and recent drought all place significant upward pressure on the price of corn.  As a result, corn imports will likely increase significantly over 2010 volume in light of the steady growth of pork consumption by Chinese rural consumers as a result of rising incomes.  Due to pork’s status as a staple protein source in urban areas, the urban demand for pork is relatively inelastic.  Corn will likely become more important to animal feed as more large hog farms enter the industry.  We expect that these farms will be less likely to rely upon non-conventional rice and wheat byproducts as carbohydrate substitutes when compared to smaller farmers. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Hog Production—China—Despite a record high in pork prices represented by a 57% year-on-year increase in June 2011, we anticipate a market correction following these rising prices.  Recent increases in pork prices are primarily attributable to a domestic shortage of hogs and rising feed costs.  Price declines will likely be driven by overproduction to service the current strong demand for pork, primarily from small Chinese hog farms (50 hogs or less)—which comprise approximately 60% of Chinese pork production.  With pork prices exceeding the prior record set in 2008, rising profits will likely attract additional supply, curbing prices. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|          |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|--------------------|--------|-------------------------------------------------|--------|--------|-----------------------------------------------|--------|
|               |   | 2011                                            |   |   | 2010                                          |   |   | Increase (Decrease) Due To |   |   | 2011 |   |   | 2010 |   |   | Increase (Decrease) Due To |   |
|               |   | (unaudited)                                     |   |   | (unaudited)                                   |   |   | M2P2Acquisition |   |   | Year overYear |   |   | (unaudited) |   |   | (unaudited) |   |   | M2P2Acquisition |   |   | Year overYear |   |
|               |   | (in thousands)                                  |   |   | (in thousands)                                |   |
|               |   |                                            |   |   |                                          |   |
| Revenues           |   | $                                               | 85,398 |   |                                          | $      | 33,760 |   |   | $ | 54,843 |   |   | $ | (3,205 | ) |   | $ | 178,385 |   |   | $ | 80,250 |   |   | $ | 112,727 |   |   | $ | (14,592 | ) |
|               |   |                                            |   |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of goods sold |   |                                            | 77,312 |   |                                          |   | 30,224 |   |   |   | 51,426 |   |   |   | (4,338 | ) |   |   | 162,419 |   |   |   | 70,842 |   |   |   | 104,925 |   |   |   | (13,349 | ) |
|               |   |                                            |   |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross profit       |   |                                            | 8,086  |   |                                          |   | 3,536 |   |   |   | 3,417 |   |   |   | 1,133 |   |   |   | 15,967 |   |   |   | 9,408 |   |   |   | 7,802 |   |   |   | (1,244 | ) |

|   | · | Revenue declined $3.2 million reflecting a decline in animal feed volumes due to reduced customer sow breeding herds and hog inventories impacted by continuing health issues offset by an increase in our Legacy hog revenues due to higher market prices for live hogs in combination with the prior year impacts that flooding had on our operations during the 2010 period. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Cost of sales reflects lower total costs due to reduced volumes of feed sold offset by higher raw material costs in our animal nutrition segment, while our Legacy hog operations incurred higher costs of raw materials on a comparative basis offset by our prior period results including unusual costs related to market hogs lost as a result of the 2010 flooding. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Gross profit for the current period benefited from higher live hog prices, volume induced cost savings related to lower feed shipments and the prior period’s inclusion of unusual costs related to the loss of market pigs due to flooding. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Gross profit by our operating segments follows: |
|--------|--------|-------------------------------------------------|

|                           |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|--------------------------------|--------|-------------------------------------------------|--------|--------|-----------------------------------------------|--------|
|                           |   | 2011                                            |   |   | 2010                                          |   |   |   |   |   | 2011 |   |   | 2010 |   |   |   |   |
|                           |   | (unaudited)                                     |   |   | (unaudited)                                   |   |   | Increase(Decrease) |   |   | (unaudited) |   |   | (unaudited) |   |   | Increase(Decrease) |   |
|                           |   | (in thousands)                             |   |   | (in thousands)                           |   |
|                           |   |                                            |   |   |                                          |   |
| Animal feed nutrition          |   | $                                               | 2,126  |   |                                          | $      | 4,768 |   |   |   | (2,642 | ) |   | $ | 4,553 |   |   | $ | 9,233 |   |   |   | (4,680 | ) |
| Hog production - United States |   |                                            | 3,417  |   |                                          |   | - |   |   |   | 3,417 |   |   |   | 7,802 |   |   |   | - |   |   |   | 7,802 |   |
| Hog production - China         |   |                                            | 2,543  |   |                                          |   | (1,232 | ) |   |   | 3,775 |   |   |   | 3,612 |   |   |   | 175 |   |   |   | 3,437 |   |
| Total                          |   |                                            | 8,086  |   |                                          |   | 3,536 |   |   |   | 4,550 |   |   |   | 15,967 |   |   |   | 9,408 |   |   |   | 6,559 |   |

|   | · | Revenues are $14.6 million less than the comparable 2010 period reflecting declines in animal feed volumes due to reduced customer sow breeding herds and hog inventories as well as our prior year results reflecting benefit of a prior year program of purchasing hogs outside of our internal production for growing to market weights.  The decline was lessened by higher market hog prices in 2011 compared to 2010. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Cost of goods sold reflects overall lower costs of $13.3 million resulting from reduced volumes of animal feed sold, lesser costs in our Legacy Farm system related to ceasing our program of purchasing pigs outside our internal production for finishing to market weights, and higher costs in 2010 related to the flooding impacts to our Legacy farms offset by higher raw material costs. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Gross profit declined $1.2 million primarily due to our animal nutrition segment decline in gross profit of $4.7 million reflecting reduced sales of feed offset by an increase in gross profit in our Hog Production—China segment of $3.5 million primarily reflecting overall higher market prices for live hogs. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | For Hog Production—United States (“M2P2 Acquisition”), our three-month gross profit declined from the first quarter of 2011 due to reduced marketing of hogs as a result of slower growth rates, because of warm weather, and leveling provisions in our marketing agreement, which favored our first quarter of 2011. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                   |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|---------------------------------------------|--------|-------------------------------------------------|--------|--------|-----------------------------------------------|--------|
|                                        |   | 2011                                            |   |   | 2010                                          |   |   | Increase (Decrease) Due To |   |   | 2011 |   |   | 2010 |   |   | Increase (Decrease) Due To |   |
|                                        |   | (unaudited)                                     |   |   | (unaudited)                                   |   |   | M2P2Acquisition |   |   | Year overYear |   |   | (unaudited) |   |   | (unaudited) |   |   | M2P2Acquisition |   |   | Year overYear |   |
|                                        |   | (in thousands)                             |   |   | (in thousands)                           |   |
| Selling, general and administrative expense |   | $                                               | 21,539 |   |                                          | $      | 4,618 |   |   | $ | 887 |   |   | $ | 16,034 |   |   | $ | 28,901 |   |   | $ | 9,079 |   |   | $ | 1,626 |   |   | $ | 18,196 |   |

----

|   | · | SG&A costs are higher than 2010 primarily due to credit and collection losses associated with our animal feed nutrition segment in the amount of $14.3 million, with the remaining increase attributable to corporate staffing and amortization charges related to incentive shares awarded to executive management, directors and advisors, expensing of current and capitalized registration costs related to the Registration Statement on Form F-1 due to withdrawal of this filing, and increased accounting, audit, legal and professional fees related to various compliance matters and filings. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The higher costs in 2011 compared to 2010 are primarily due to credit and collection losses associated with our animal feed nutrition segment in the amount of $15.5 million, with the remaining increases attributable to corporate staffing and amortization of newly awarded incentive shares to executive management, directors and advisors, expensing of current and capitalized registration costs relating to the Registration Statement on Form F-1 due to withdrawal of this filing, and increased accounting, legal and professional fees related to various compliance matters and filings. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                    |   | Three Months Ended June 30, |      |   | Six Months Ended June 30, |   |
|------------------------------|--------|-------------------------------------------------|-----------|--------|-----------------------------------------------|--------|
|                         |   | 2011                                            |      |   | 2010                                          |   |   | Increase (Decrease) Due To |   |   | 2011 |   |   | 2010 |   |   | Increase (Decrease) Due To |   |
|                         |   | (unaudited)                                     |      |   | (unaudited)                                   |   |   | M2P2Acquisition |   | Year overYear |   |   | (unaudited) |   |   | (unaudited) |   |   | M2P2Acquisition |   |   | Year overYear |   |
|                         |   | (in thousands)                             |      |   | (in thousands)                           |   |
| Interest and financing costs |   | $                                               |  996 |   |                                          | $      |  140 |   |   | $ |  760 |   |   | $ | 96 |   |   | $ | 1,911 |   |   | $ | 265 |   |   | $ | 1,385 |   |   | $ | 261 |   |

|   | · | The increase of $96,000 is due to the incurrence of interest related to the acquisition (M2P2) note payable offset by the interest savings related to repayment of our China operating short-term loan and repayment of a convertible note. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The increase of $261,000 is due to the incurrence of interest related to the acquisition (M2P2) note payable offset by the interest savings related to repayment of our China operating short-term loan and repayment of a convertible note. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | The line of credit we utilize for working capital to fund our Hog Production—United States segment grew from $44.8 million at March 31, 2011 to $48.5 million at June 30, 2011 giving rise to the increase in quarterly interest and financing costs for the quarter ended June 30, 2011 ($760,000) compared to the quarter ended March 31, 2011 ($625,000), which for the six months equates to $1.4 million. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                    |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|------------------------------|--------|-------------------------------------------------|--------|--------|-----------------------------------------------|--------|
|                         |   | 2011                                            |   |   | 2010                                          |   |   | Increase (Decrease) Due To |   |   | 2011 |   |   | 2010 |   |   | Increase (Decrease) Due To |   |
|                         |   | (unaudited)                                     |   |   | (unaudited)                                   |   |   | M2P2Acquisition |   |   | Year overYear |   |   | (unaudited) |   |   | (unaudited) |   |   | M2P2Acquisition |   |   | Year overYear |   |
|                         |   | (in thousands)                             |   |   | (in thousands)                           |   |
|                         |   |                                            |   |   |                                          |   |
| Income tax expense (benefit) |   | $                                               | (304   | )      |                                          | $      | 641 |   |   | $ | - |   |   | $ | (945 | ) |   | $ | 234 |   |   | $ | 1,095 |   |   | $ | - |   |   | $ | (861 | ) |

|   | · | The tax benefit is derived primarily through the increase of our deferred tax asset given our ability to offset corporate (Holding Company) losses with the earnings of our Hog Production—United States segment.  The prior year amount relates to taxable earnings of our animal feed nutrition segment.  For the current period our animal feed nutrition segment experienced a significant net loss, which has no associated tax benefit but may provide benefit in the future subject to a range of strategic alternatives we may consider regarding this non-core asset. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Tax expense declined primarily due to an increase in our U.S. deferred tax benefit, while the prior year tax expense relates solely to the operating income of our animal nutrition segment. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (Dollars in thousands except per metric ton data) |   | Three Months ended June 30, |   |   | Six Months ended June 30, |   |
|---------------------------------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|
|                                              |   | 2011                        |   |   | 2010                      |   |   | % Inc (Dec) |   |   | 2011 |   |   | 2010 |   |   | % Inc (Dec) |   |
| Volume—Metric Tons (MT)                     |   |                        | 25,760 |   |                      |   | 33,708 |   |   |   | (24 | )% |   |   | 63,853 |   |   |   | 69,848 |   |   |   | (9 | )% |
| Revenue                                           |   | $                           | 16,741 |   |                      |   | 26,369 |   |   |   | (37 | )% |   | $ | 40,950 |   |   |   | 50,659 |   |   |   | (19 | )% |
| Cost of Sales                                     |   | $                           | 14,615 |   |                      |   | 21,601 |   |   |   | (32 | )% |   | $ | 36,397 |   |   |   | 41,426 |   |   |   | (12 | )% |
| Gross Profit                                      |   | $                           | 2,126  |   |                      |   | 4,768 |   |   |   | (55 | )% |   | $ | 4,553 |   |   |   | 9,233 |   |   |   | (51 | )% |
| Change in gross profit from 2010 period           |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Due to Price                                      |   | $                           | (1,518 | )      |                      |   |   |   |   |   |   |   |   | $ | (3,887 | ) |   |   |   |   |   |   |   |   |
| Due to Volume                                     |   | $                           | (1,124 | )      |                      |   |   |   |   |   |   |   |   | $ | (793 | ) |   |   |   |   |   |   |   |   |
|                                              |   | $                           | (2,642 | )      |                      |   |   |   |   |   |   |   |   | $ | (4,680 | ) |   |   |   |   |   |   |   |   |
| Changes from 2010 period                          |   |                        |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenue per MT increase (decrease)                |   | $                           | (132   | )      |                      |   |   |   |   |   |   |   |   | $ | (84 | ) |   |   |   |   |   |   |   |   |
| Cost per MT increase (decrease)                   |   | $                           | (73    | )      |                      |   |   |   |   |   |   |   |   | $ | (23 | ) |   |   |   |   |   |   |   |   |
| Gross Profit per MT increase (decrease)           |   | $                           | (59    | )      |                      |   |   |   |   |   |   |   |   | $ | (61 | ) |   |   |   |   |   |   |   |   |

|   | · | Revenues declined 37% driven by reduced levels of customer sows and hogs reflecting the impact of disease as well as delays to expand or replace production stock due to the high cost of feed raw materials and replacement animals. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In aggregate, revenues per metric ton declined $132 in the 2011 period compared to 2010. |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | Cost of sales declined 32% reflecting reduced sales volumes and a product-mix shift toward emphasizing pre-mix and concentrates while corn is at high prices.  Our cost per metric ton decreased $73. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Gross profit declined $2.6 million.  Of this, $1.5 million primarily relates to price and cost drivers reflecting the competitive market challenges we experienced to pass along increasing raw material and transport costs in our product pricing in order to retain market share.  The remaining $1.1 million is due to overall reduced volume sales. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | During the quarter we began shifting our product mix to emphasize concentrates and pre-mix products, while we develop less cost alternative complete feeds and expand our purchasing channels given the high price of corn. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Revenues declined 19% reflecting a progression of adverse market conditions, which commenced in the second quarter of 2010 and continue to perpetuate causing our customers to carry reduced levels of sows and market hogs on feed as the result of disease-driven impacts to production and delays in recovery through breeding hog and market hog expansion and replacement due to the high cost of replacement animals and the high costs of raising hogs to market weights. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In aggregate, revenues per metric ton declined $84 in the 2011 period compared to 2010. |
|--------|--------|-----------------------------------------------------------------------------------------|

----

|   | · | Cost of sales declined 12% reflecting reduced sales volumes and an overall re-emphasis on pre-mix and concentrates products, while corn is at high prices. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Gross profit declined $4.7 million of which $3.9 million is attributable to price and cost drivers reflecting the market challenges we experienced to pass along increasing raw material and transport costs in our product pricing to remain competitive and retain market share, while $0.8 million is attributable to volume drivers. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                     |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|-----------------------------------------------|--------|-------------------------------------------------|--------|--------|-----------------------------------------------|--------|
|                                          |   | 2011                                            |   |   | 2010                                          |   |   |   |   |   | 2011 |   |   | 2010 |   |   |   |   |
|                                          |   | (unaudited)                                     |   |   | (unaudited)                                   |   |   | Increase(Decrease) |   |   | (unaudited) |   |   | (unaudited) |   |   | Increase(Decrease) |   |
|                                          |   | (in thousands)                                  |   |   | (in thousands)                                |   |
| Selling, general & administrative expense |   | $                                               | 16,354 |   |                                          | $      | 1,806 |   |   | $ | 14,548 |   |   | $ | 19,615 |   |   | $ | 3,603 |   |   | $ | 16,012 |   |

|   | · | In response to the deteriorating quality of credit issued to customers as a result of continuing operating pressures brought about by consistently rising costs of feed raw materials (corn and soybean meal), farm labor, disease recovery and high market prices for piglets needed to maintain and expand herds, we have incurred a non-cash charge of $14.3 million to our earnings in the quarter ended June 30, 2011. This non-cash charges equates to a $9.2 million expense related to collection of accounts receivable and an increase of $5.1 million to our bad debt provision. Our provision for bad debts now stands at $7.0 million. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Of the increase of $16.0 million, $15.5 million relates to charges we have taken against our receivables due to deteriorating credit quality brought about by the cumulative market and operating challenges encountered by our customers.  These challenges include recovery from disease outbreaks, persistent increasing costs of feed raw materials (corn and soybean meal), higher farm labor costs and high market prices for piglets needed to maintain and expand herds. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|        |   | Three Months Ended June 30, |    |   | Six Months Ended June 30, |   |
|------------------|--------|-------------------------------------------------|---------|--------|-----------------------------------------------|--------|
|             |   | 2011                                            |    |   | 2010                                          |   |   |   |   |   | 2011 |   |   | 2010 |   |   |   |   |
|             |   | (unaudited)                                     |    |   | (unaudited)                                   |   |   | Increase(Decrease) |   |   | (unaudited) |   |   | (unaudited) |   |   | Increase(Decrease) |   |
|             |   | (in thousands)                             |    |   | (in thousands)                           |   |
| Operating profit |   | $                                               | (14,227 | )      |                                          | $      | 2,963 |   |   | $ | (17,190 | ) |   | $ | (15,063 | ) |   | $ | 5,630 |   |   | $ | (20,693 | ) |

|   | · | Operating profit declined $17.2 million compared to the prior year period due to the aggressive position we have taken regarding collectability of our accounts receivable resulting in a charge to earnings of $14.3 million. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Without impact of the charge related to our credit and collection losses, the current quarter would have reflected a slight operating profit. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Operating profit declined $20.7 million compared to the prior year period due to cumulative charges of $15.5 million for credit and collection losses, reduced volume sales of our feed due to lower herd and hog inventories of our customers, competitive market forces preventing us from passing along increased costs of our raw materials and a shift in our product mix in response to the market challenges we are facing. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Removing the cumulative charges for our credit and collection losses, our 2011 year-to-date operating profit would be approximately $500,000. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|          |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|--------------------|--------|-------------------------------------------------|--------|--------|-----------------------------------------------|--------|
|               |   | 2011                                            |   |   | 2010                                          |   |   |   |   |   | 2011 |   |   | 2010 |   |   |   |   |
|               |   | (unaudited)                                     |   |   | (unaudited)                                   |   |   | Increase(Decrease) |   |   | (unaudited) |   |   | (unaudited) |   |   | Increase(Decrease) |   |
|               |   | (in thousands)                             |   |   | (in thousands)                           |   |
|               |   |                                            |   |   |                                          |   |
| Income tax expense |   | $                                               | 82     |   |                                          | $      | 641 |   |   | $ | (559 | ) |   | $ | 217 |   |   | $ | 1,095 |   |   | $ | (878 | ) |

|   | · | Tax expense declined due to prior year profitability versus the current period. |
|--------|--------|---------------------------------------------------------------------------------|

| (Dollars in thousands,except per hog data) |   | Three Months ended June 30, |   |   | Six Months ended June 30, |   |
|---------------------------------------------------------------------|--------|-------------------------------------------------|--------|--------|-----------------------------------------------|--------|
|                                                                |   | 2011                                            |   |   | 2010                                          |   |   | Inc (Dec) |   |   | 2011 |   |   | 2010 |   |   | Inc (Dec) |   |
| Volume—Hogs                                                   |   |                                            | 68,054 |   |                                          |   | 72,883 |   |   |   | (4,829 | ) |   |   | 137,097 |   |   |   | 219,630 |   |   |   | (82,533 | ) |
| Revenue                                                             |   | $                                               | 13,814 |   |                                          |   | 7,391 |   |   |   | 6,423 |   |   | $ | 24,708 |   |   |   | 29,591 |   |   |   | (4,883 | ) |
| Cost of Sales                                                       |   | $                                               | 11,271 |   |                                          |   | 8,623 |   |   |   | 2,648 |   |   | $ | 21,096 |   |   |   | 29,416 |   |   |   | (8,320 | ) |
| Gross Profit                                                        |   | $                                               | 2,543  |   |                                          |   | (1,232 | ) |   |   | 3,775 |   |   | $ | 3,612 |   |   |   | 175 |   |   |   | 3,437 |   |
| Change in gross profit from 2010 period                             |   |                                            |   |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Due to Price                                            |   | $                                               | 3,693  |   |                                          |   |   |   |   |   |   |   |   | $ | 3,503 |   |   |   |   |   |   |   |   |   |
|   Due to Volume                                           |   | $                                               | 82     |   |                                          |   |   |   |   |   |   |   |   | $ | (66 | ) |   |   |   |   |   |   |   |   |
|                                                                |   | $                                               | 3,775  |   |                                          |   |   |   |   |   |   |   |   | $ | 3,437 |   |   |   |   |   |   |   |   |   |
| Revenue per hog                                                     |   | $                                               | 203    |   |                                          |   | 101 |   |   |   | 102 |   |   | $ | 180 |   |   |   | 135 |   |   |   | 45 |   |
| Cost per hog                                                        |   | $                                               | 166    |   |                                          |   | 118 |   |   |   | 48 |   |   | $ | 154 |   |   |   | 134 |   |   |   | 20 |   |
| Gross profit per hog                                                |   | $                                               | 37     |   |                                          |   | (17 | ) |   |   | 54 |   |   | $ | 26 |   |   |   | 1 |   |   |   | 25 |   |

----

|   | · | Revenues for the period ended June 30, 2011 of $13.8 million exceeded prior year revenues by $6.4 million representing an 86.5% increase.  Historically high live hog prices compared to prior year prices, which were at historical lows, brought about a doubling of our revenue per hog offset by a decline in marketed hogs of 4,829 head. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Cost of sales increased $2.6 million in the current period versus the prior year period.  On a per hog basis, our cost increased $47 per hog or 40% primarily driven by higher feed costs, but offset by marketing pigs at lighter weights to re-establish market hog flows while live hog market prices are high. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Gross profit improved $3.8 million reflecting a $54 margin per pig improvement compared to the prior year. |
|--------|--------|------------------------------------------------------------------------------------------------------------|

|   | · | Revenues for the 2011 period are $4.9 million less than 2010.  This is primarily due to the decline in market hogs sold of 82,533 and offset by an increase of $45 per marketed pig.   In the 2010 period, we were active in the purchase of hogs from outside our system for the purpose of finishing these hogs to market weights at a profit.  We discontinued this program at the end of the first quarter of 2010. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Cost of sales declined $8.3 million due to discontinuance of our hog finishing program in the first quarter of 2010 offset by increased costs of raising an hog primarily attributable to higher feed costs.  Per hog costs increased $20 per hog from $134 in 2010 to $154 in 2011. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Gross profit improved $3.4 million primarily driven by increases in market prices for live hogs. |
|--------|--------|--------------------------------------------------------------------------------------------------|

|        |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|------------------|--------|-------------------------------------------------|--------|--------|-----------------------------------------------|--------|
|             |   | 2011                                            |   |   | 2010                                          |   |   |   |   |   | 2011 |   |   | 2010 |   |   |   |   |
|             |   | (unaudited)                                     |   |   | (unaudited)                                   |   |   | Increase(Decrease) |   |   | (unaudited) |   |   | (unaudited) |   |   | Increase(Decrease) |   |
|             |   | (in thousands)                             |   |   | (in thousands)                           |   |
|             |   |                                            |   |   |                                          |   |
| Operating profit |   | $                                               | 1,310  |   |                                          | $      | (2,755 | ) |   | $ | 4,065 |   |   | $ | 1,171 |   |   | $ | (2,526 | ) |   | $ | 3,697 |   |

|   | · | During the current quarter our Legacy farms, excluding discontinued operations reflected an operating profit of $1.3 million versus a prior period loss of $2.8 million.  The profit is after taking a charge of $793,000 for closing a farm in Guangxi Province and relocating the herd to another farm. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | The operating profit is primarily due to a net improvement of $54 received per marketed hog, reflecting the doubling of live hog prices between the periods. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our $3.7 million increase in operating profit is attributable to a $25 per marketed hog margin increase supported by our abilities to respond and recover from health and bio-security issues toward re-establishing consistent market flows of hogs from our farms. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (Dollars per thousand,except per hog data) |   | Three Months ended |    |   | Six Monthsended |   |
|---------------------------------------------------------------------|--------|------------------------------|---------|--------|----------------------|--------|
|                                                                |   | 30-Jun-11                    |    |   | 31-Mar-11            |   |   | Inc (Dec) |   |   | 30-Jun-11 |   |
| Volume—Hogs                                                   |   |                         | 301,369 |   |                 |   | 333,792 |   |   |   | (32,423 | ) |   |   | 635,161 |   |
| Revenue                                                             |   | $                            | 54,843  |   |                 |   | 57,884 |   |   |   | (3,041 | ) |   | $ | 112,727 |   |
| Cost of Sales                                                       |   | $                            | 51,426  |   |                 |   | 53,499 |   |   |   | (2,073 | ) |   | $ | 104,925 |   |
| Gross Profit                                                        |   | $                            | 3,417   |   |                 |   | 4,385 |   |   |   | (968 | ) |   | $ | 7,802 |   |
| Revenue per hog                                                     |   | $                            | 182     |   |                 |   | 173 |   |   |   | 9 |   |   | $ | 177 |   |
| Cost per hog                                                        |   | $                            | 171     |   |                 |   | 160 |   |   |   | 10 |   |   | $ | 165 |   |
| Gross profit per hog                                                |   | $                            | 11      |   |                 |   | 13 |   |   |   | (2 | ) |   | $ | 12 |   |

|                         |   | Three Months Ended |   |   | Six MonthsEnded |   |
|------------------------------|--------|------------------------------|--------|--------|----------------------|--------|
|                         |   | 30-Jun-11                    |   |   | 31-Mar-11            |   |   |   |   |   | 30-Jun-11 |   |
|                         |   | (unaudited)                  |   |   | (unaudited)          |   |   | Increase(Decrease) |   |   | (unaudited) |   |
|                         |   | (in thousands)          |   |   |                 |   |
| Interest and financing costs |   | $                            | 760    |   |                 | $      | 625 |   |   | $ | 135 |   |   | $ | 1,385 |   |

----

|                                          |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|-----------------------------------------------|--------|-------------------------------------------------|--------|--------|-----------------------------------------------|--------|
|                                          |   | 2011                                            |   |   | 2010                                          |   |   |   |   |   | 2011 |   |   | 2010 |   |   |   |   |
|                                          |   | (unaudited)                                     |   |   | (unaudited)                                   |   |   | Increase(Decrease) |   |   | (unaudited) |   |   | (unaudited) |   |   | Increase(Decrease) |   |
|                                          |   | (in thousands)                             |   |   | (in thousands)                           |   |
| Selling, general & administrative expense |   | $                                               | 770    |   |                                          | $      | 315 |   |   | $ | 455 |   |   | $ | 1,068 |   |   | $ | 532 |   |   | $ | 536 |   |

|                                          |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|-----------------------------------------------|--------|-------------------------------------------------|--------|--------|-----------------------------------------------|--------|
|                                          |   | 2011                                            |   |   | 2010                                          |   |   |   |   |   | 2011 |   |   | 2010 |   |   |   |   |
|                                          |   | (unaudited)                                     |   |   | (unaudited)                                   |   |   | Increase(Decrease) |   |   | (unaudited) |   |   | (unaudited) |   |   | Increase(Decrease) |   |
|                                          |   | (in thousands)                             |   |   | (in thousands)                           |   |
| Selling, general & administrative expense |   | $                                               | 2,295  |   |                                          | $      | 974 |   |   | $ | 1,321 |   |   | $ | 4,150 |   |   | $ | 2,243 |   |   | $ | 1,907 |   |

|   |   |                               |   | Three  |   |   | Six    |   |
|--------|--------|------------------------------------|--------|--------|--------|--------|--------|--------|
|   |   |                               |   | Months |   |   | Months |   |
| o      |   | China legal and consulting         |   | $      | 0.1    |   |   | $      | 0.1 |   |
| o      |   | US legal and consulting            |   |   | 0.3    |   |   |   | 0.4 |   |
| o      |   | Expense capitalized F-1 charges    |   |   | 0.3    |   |   |   | 0.3 |   |
| o      |   | Accounting, audit, tax, compliance |   |   | 0.4    |   |   |   | 0.6 |   |
| o      |   | Stock-based compensation           |   |   | (0.1   | )      |   |   | 0.1 |   |
| o      |   | Other                              |   |   | 0.3    |   |   |   | 0.4 |   |
|   |   |                               |   |   |   |   |   |   |   |   |
|   |   | Total                              |   | $      | 1.3    |   |   | $      | 1.9 |   |

----

|                         |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|------------------------------|--------|-------------------------------------------------|--------|--------|-----------------------------------------------|--------|
|                         |   | 2011                                            |   |   | 2010                                          |   |   |   |   |   | 2011 |   |   | 2010 |   |   |   |   |
|                         |   | (unaudited)                                     |   |   | (unaudited)                                   |   |   | Increase(Decrease) |   |   | (unaudited) |   |   | (unaudited) |   |   | Increase(Decrease) |   |
|                         |   | (in thousands)                             |   |   | (in thousands)                           |   |
| Interest and financing costs |   | $                                               | 192    |   |                                          | $      | 43 |   |   | $ | 150 |   |   | $ | 412 |   |   | $ | 85 |   |   | $ | 327 |   |

|   | · | In the current period, we are only incurring interest charges related to the acquisition (of M2P2) note, which is paid quarterly. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|

|   | · | We have incurred two quarters of interest charges related to the acquisition note in addition to interest related to a convertible note, which was settled in the first quarter of 2011. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                           |   | Three Months Ended June 30, |       |   | Six Months Ended June 30, |   |
|--------------------------------|--------|-------------------------------------------------|------------|--------|-----------------------------------------------|--------|
|                           |   | 2011                                            |       |   | 2010                                          |   |   | 2011 |   |   | 2010 |   |
|                           |   |                                            |       |   |                                          |   |   |   |   |   |   |   |
| Revenues                       |   | $                                               | 660,619    |   |                                          | $      | 3,901,579 |   |   | $ | 2,791,028 |   |   | $ | 10,270,790 |   |
| Cost of goods sold             |   |                                            | 2,621,784  |   |                                          |   | 4,878,683 |   |   |   | 4,576,498 |   |   |   | 10,800,649 |   |
| Gross profit                   |   |                                            | (1,961,165 | )      |                                          |   | (977,104 | ) |   |   | (1,785,470 | ) |   |   | (529,859 | ) |
| Operating expenses             |   |                                            | 257,884    |   |                                          |   | 307,966 |   |   |   | 887,003 |   |   |   | 640,756 |   |
| Loss from operations           |   |                                            | (2,219,049 | )      |                                          |   | (1,285,070 | ) |   |   | (2,672,473 | ) |   |   | (1,170,615 | ) |
| Non-operating income (expense) |   |                                            | 474,807    |   |                                          |   | (97,095 | ) |   |   | 247,186 |   |   |   | (168,831 | ) |
| Loss before taxes              |   |                                            | (1,744,242 | )      |                                          |   | (1,382,165 | ) |   |   | (2,425,287 | ) |   |   | (1,339,446 | ) |
| Income tax expense             |   |                                            | -          |   |                                          |   | - |   |   |   | - |   |   |   | - |   |
| Net loss                       |   | $                                               | (1,744,242 | )      |                                          | $      | (1,382,165 | ) |   | $ | (2,425,287 | ) |   | $ | (1,339,446 | ) |

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| Balance, December 31, 2010           |   | $      | 707,968    |   |
|--------------------------------------|--------|--------|------------|--------|
| Additions                            |   |   | 15,484,448 |   |
| Write-offs of uncollectible accounts |   |   | (9,147,649 | )      |
| Balance, June 30, 2011               |   | $      | 7,044,767  |   |

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| Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
|---------|------------------------------------------------------------|

----

| Item 4. | Controls and Procedures |
|---------|-------------------------|

| Item 1. | Legal Proceedings |
|---------|-------------------|

| Item 1A. | Risk Factors |
|----------|--------------|

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| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
|---------|-------------------------------------------------------------|

| Item 3. | Defaults Upon Senior Securities |
|---------|---------------------------------|

| Item 4. | (Removed and Reserved) |
|---------|------------------------|

| Item 5. | Other Information |
|---------|-------------------|

| Item 6. | Exhibits |
|---------|----------|

| (a) | Exhibits |
|-----|----------|

| Exhibit Number |   | Description of Exhibit                                                                                                                                                |
|----------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|           |   |                                                                                                                                                                  |
| 31.1           |   | Certification of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.  |
| 31.2           |   | Certification of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a), promulgated under the Securities and Exchange Act of 1934, as amended.  |
| 32.1           |   | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).                |
| 32.2           |   | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).                     |

----

|           | AgFeed Industries, Inc. |
|----------------|-------------------------|
|           |                    |   |
| August 9, 2011 | By:                     | /s/ John A. Stadler |
|           |                    |   |
|           |                    | John A. StadlerInterim Chief Executive Officer (Principal Executive Officer) |
|           |                    |   |
| August 9, 2011 | By:                     | /s/ Clayton T. Marshall |
|           |                    |   |
|           |                    | Clayton T. MarshallChief Financial Officer(Principal Financial and AccountingOfficer) |

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