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International Red Meat Update Presented By: U.S. Meat Export Federation January 8, 2006

American Farm Bureau Federation. International Red Meat Update Presented By: U.S. Meat Export Federation January 8, 2006. History & Mission. USMEF was formally organized in 1976 and is a non-profit trade association working to create new opportunities for beef, lamb and pork.

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International Red Meat Update Presented By: U.S. Meat Export Federation January 8, 2006

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  1. American Farm Bureau Federation International Red Meat Update Presented By: U.S. Meat Export Federation January 8, 2006

  2. History & Mission • USMEF was formally organized in 1976 and is a non-profit trade association working to create new opportunities for beef, lamb and pork. • USMEF’s mission has evolved over the years and is“to increase the value and profitability of the U.S. beef, pork and lamb industries by enhancing demand for their products in targeted export markets through a dynamic partnership of all stakeholders”.

  3. St. Petersburg London Denver Moscow Tokyo Seoul Osaka Monterrey Beirut Mexico City Shanghai Guangzhou Taipei Caracas Hong Kong Singapore Sao Paulo USMEF Offices & Representatives

  4. Private Companies Swift & Company Tyson Excel Sara Lee Hormel Smithfield Agribusiness Chicago Mercantile Exchange Elanco Animal Health U.S. Dept. of Agriculture Nat’l & State Organizations National Pork Board National Pork Producers Association Cattlemen’s Beef Board American Sheep Industry Council United Soybean Board American Farm Bureau Federation American Meat Institute State Farm Bureaus State Pork Organizations USMEF Stakeholders

  5. World Population Growth Historical Projected Double 1980 by 2050

  6. Globalization • Globalization is increasing – livestock sector • Livestock and products • Ideas, trends, technology • Investment and finance • Retail expansion into developing markets is increasing global trade • Mexico • Wal-Mart going from 48 to 90 outlets in China by the end of 2006 • Supermarkets now acct for 55% of food retailing in Mexico, Philippines, Chile • This globalization benefits our competitors as well

  7. U.S. Pork Export Trends

  8. World Hog Production – China! Million head Source: FAO

  9. U.S. Pork and Pork Variety Meat Exports 13.2% Compound Annual Growth (Volume) Source: USDA

  10. U.S. Pork / PVM Exports as a Percent of Production Source: USDA, USMEF

  11. Daily Live Hogs Represented by U.S. Pork Exports Based on 200# carcasses, no pvm included Source: USDA, USMEF

  12. U.S. Pork Exports2004 export levels set new milestones:1 million MT worth $2.2 billion Industry studies suggest ’04 export performance added $23 per head Long-term growth is bullish Competition from other countries is building U.S. share of world trade in pork and pork variety meats is closing in on 20% Projected to stay in 20% range for near future Brazil and China rapidly increasing shares of world trade

  13. U.S. Pork/PVM Market Growth Source: USDA, USMEF

  14. Was 2005 A Bad Year? Source: USDA, USMEF

  15. U.S. Pork/PVM Export Volume Source: USDA

  16. U.S. Pork/PVM Export Value Source: USDA

  17. BSE in the U.S. What has been lost and when do we resume exports?

  18. 12/24/03 Bans on U.S. Beef Begin

  19. What is the beef export impact on corn? • 2003 beef exports totaled 2.5 bil. Lbs. carcass weight • equivalent to nearly 3.2 million head of cattle. • 175 mil. bushels of corn consumed by cattle (beef) • exports or 3.4 mil. bushels per week. • Value of corn exported as beef $400 to $500 mil. or $7.5 to $9.5 million per week • Additional demand for corn due to beef exports • increases corn prices $0.10 to $0.15 per bu • Source Cattle-Fax

  20. A 1% increase in the export of U.S. red meats increases the utilization of U.S. corn and soybeans by over 3 million bushels.

  21. U.S. Beef/BVM Exports 2003 2004 2005 Source: USDA

  22. Key U.S. Beef Markets - BSE

  23. Japan • Book Keeping System • ID Cattle at Birth • Verify Birth ID at Death or Slaughter • Verify BSE Test is performed on each animal at death or slaughter

  24. Japan Beef Supplies • Eating less, yet paying more • Losers: N. America, domestic industry Source: ALIC, USMEF

  25. Aussie Beef to Japan Source: Global Trade Atlas, MLA

  26. To compete globally: Focus on U.S. advantages: Diversity, flexibility of programs, grain-fed Aggressively pursue trade and competition Embrace trade enhancing policies “Export-minded” mentality Where Do We Go From Here?

  27. In Summary • Global red meat demand is expanding • Population, incomes, globalization • BSE has changed the way we do business • Participating in red meat trade helps U.S. producers • Increase profitability of industry • Participate globally • Invest in future markets • Maintain competitiveness

  28. “New Realities” • Protein complex is dealing with the dual shocks of BSE and AI – creating opportunity to grow percentage of eating occasions that include U.S. Pork • Consumers are becoming increasingly concerned about food safety. Brands/traceability are becoming more important • Competition for export markets is intensifying • FTA’s are enhancing long-term market prospects

  29. Thank You For more information: John Hinners jhinners@usmef.org (303)623-6328 or visit USMEF at www.usmef.org

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