Your Stake In International Marketing

1. Your Stake In International Marketing Lynn HeinzeVice President, InformationU.S. Meat Export Federation Putting U.S. Meat On The World’s Table

2. USMEF Worldwide Putting U.S. Meat On The World’s Table St. Petersburg London Denver Moscow Tokyo Seoul Osaka Monterrey Beirut Mexico City Shanghai Guangzhou Taipei Caracas Hong Kong Singapore Sao Paulo Putting U.S. Meat On The World’s Table

3. USMEF Snapshot • Public-private sector cooperation • Multi-species – beef, pork, lamb • Multi-segment • Grain/livestock checkoffs/producer groups • Packers/processors/purveyors/traders • Agribusiness • Strategies: • Gain market access; maintain market presence • Educate buyers; build loyalty • Support trade • Promote industry/product image • Educate consumers regarding food safety • Utilize the total carcass Putting U.S. Meat On The World’s Table

4. + + + Commodity Checkoff Investments $12.6 Million Other Income $0.7 Million 3rd Party Contributions $9.5 Million TOTAL $35.9 Million USDA $13.1 Million The USMEF Investment = In 2004 each $1 of checkoff invested with USMEF returned $2.84 Putting U.S. Meat On The World’s Table

5. Leveraged Checkoff Dollars $5.6 Million Beef Checkoff Dollars Buy … $11.5 Million In Export Promotion Putting U.S. Meat On The World’s Table

6. Global Outlook Putting U.S. Meat On The World’s Table

7. Global Meat Trade Putting U.S. Meat On The World’s Table Source: Rabobank International

8. What is the Market Potential? Putting U.S. Meat On The World’s Table

9. Income and PCC of Meat -- Log Scale -- Estimate: 1% Increase in PCI Increases PCC 0.6% Putting U.S. Meat On The World’s Table Source: FAO

10. Meat Consumption +67% % change from base year +29% +108% +34% +57% +30% +64% +22% +44% +22% Source: FAO Putting U.S. Meat On The World’s Table

11. The Importance of Exports • Beef and beef variety meats exports in 2003 represented • 1.2 million MT with value of $3.5 billion • 9% of all muscle cuts • 47% of all variety meats • 90,000 MT of livers • 27,000 MT of tongues • The equivalent of 3.5 million head of cattle (roughly 67,000 head per week) Putting U.S. Meat On The World’s Table

12. Lost Export Premiums Putting U.S. Meat On The World’s Table

13. 2005 Beef Demand - YTD Putting U.S. Meat On The World’s Table Source: Beef/BVM, Global Trade Atlas, not including intra-EU trade

14. Beef Export Values Putting U.S. Meat On The World’s Table Source: Global Trade Atlas

15. U.S. Beef/BVM Forecasts % of 2003 +98% +93% +82% +49% +33% Forecasts Putting U.S. Meat On The World’s Table Source: USDA / USMEF

16. USMEF Global Activities Putting U.S. Meat On The World’s Table

17. Western Hemisphere Putting U.S. Meat On The World’s Table

18. Mexico Putting U.S. Meat On The World’s Table

19. Europe, Russia, & Middle East Putting U.S. Meat On The World’s Table

20. Re-launch of U.S. Beef Putting U.S. Meat On The World’s Table

21. Asia Pacific Putting U.S. Meat On The World’s Table

22. Asia Pacific Putting U.S. Meat On The World’s Table

23. Team Visits • USMEF has assisted USDA to coordinate visits of technical teams from Asia, including Japan, Korea, China, Hong Kong, Malaysia, Indonesia, Macau and Taiwan • Other teams have included Mexico, Caribbean, Central America and Egypt • Visits production, packing, processing and policy Putting U.S. Meat On The World’s Table

24. Focus On Japan Putting U.S. Meat On The World’s Table

25. Consumer Research • Japanese consumers are “conflicted” – don’t want to think about BSE, yet have broad knowledge of BSE when pushed. • Domestic cases of BSE now total ??. • Extensive media coverage of market access negotiations. • Reporting by media has been less than “balanced”. Putting U.S. Meat On The World’s Table

26. Consumer Research • Consumer research (broad-based surveys and focus groups) has consistently identified: • Consumers feel a sense of betrayal and that the trust/relationship with the U.S. beef industry has been badly damaged. • Confidence levels in the safety of U.S. beef have weakened. • Lifting of the ban will signal the “all clear” Putting U.S. Meat On The World’s Table

27. Consumer Research • Research has also suggested: • Consumers want to know the facts. • Believe health and safety experts to be credible sources. • Need emotional support from industry to overcome feelings of betrayal necessary to re-establishing trust/relationship with U.S. beef. Putting U.S. Meat On The World’s Table

28. Consumer Focus Groups Putting U.S. Meat On The World’s Table

29. Changing Image of U.S. Beef Best illustrated by findings from focus groups conducted July 25-26 with 30-55 year old married females who have children and live in the Tokyo or Osaka metro areas. Ideal Food American Beef before BSE American Beef after BSE Putting U.S. Meat On The World’s Table

30. Image Goal At Reopening American Beef Before BSE American Beef After BSE American Beef at Market Reopening Ideal Food Putting U.S. Meat On The World’s Table

31. U.S. Experts Putting U.S. Meat On The World’s Table

32. Seminars/Briefings Putting U.S. Meat On The World’s Table

33. Inoculation Strategy Intensifies Putting U.S. Meat On The World’s Table

34. Japan Economic Impact Study AMITA’s Economic Impact Study Economic damage on the meat-related companies in Japan December ‘04 to late June ‘05 • $5.7 billion Putting U.S. Meat On The World’s Table

35. Economic Impact Study Rollout Putting U.S. Meat On The World’s Table

36. “Project J”Carcass Utilization Project • To avoid a “run” on specific, popular cuts • Developed alternative 17 cuts and suggested recipes • Developed a guidebook • Estimated additionof 15%-35% in tonnage Putting U.S. Meat On The World’s Table

37. “Project J” Rollout Putting U.S. Meat On The World’s Table

38. Risk Communication Starts • Five banner advertorials in Yomiuri Shimbun with daily circulation >10 million. • Key message points: • Protecting the consumer (6/3) • U.S. firewalls (6/5) • SRM removal (6/8) • No MBM (6/10) • U.S. industry striving to be the best (6/15) Putting U.S. Meat On The World’s Table

39. RsCom Expands Putting U.S. Meat On The World’s Table

40. RsCom Adds TV Program TVK (Kanagawa) on 9/28&29 MX (Tokyo) on 9/28 TVS (Saitama) on 9/27 CTC (Chiba) on 9/30 GTV (Gunma) on 9/29 GYT(Tochigi ) on 9/30 BBC (Shiga) on 9/25 KBS (Kyoto) on 9/25 SUN (Osaka) on 9/26 TVN (Nara) on 9/24 WTV (Wakayama) on 9/26 GBS (Gifu) on 9/26 MTV (Mie) on 9/24 Total Households covered: 37,557,000 30-minute program about U.S. production produced by TV Kanagawa On air TVK and other 13 independent local TV stations Putting U.S. Meat On The World’s Table

41. RsCom Includes TV Spot • U.S. industry efforts • Sincere efforts to assure safety • Visual of ranch/open spaces TBS/CX in Tokyo (17,055,000) ABC/KTV in Osaka (8,621,000) CBC/CTV in Nagoya (3,969,300) FOX/Drama Channel/Fuji TV721/Foodies/Super Channel/Family Theater Putting U.S. Meat On The World’s Table

42. RsCom Goes Mobile Commitment message reinforcedto reach 10 million Tokyo/Osakacommuters per day Putting U.S. Meat On The World’s Table

43. Communications Impact? • 20% of respondents to May ’05 consumer survey conducted by Ipsos (prior to placement of advertorials) indicated they “would be comfortable purchasing U.S. beef if available in Japan” • A July ’05 survey conducted by Yomiuri newspaper of its readers immediately following the placement of USMEF advertorials found 40% of respondents “will buy and eat U.S. beef after the ban is lifted” Putting U.S. Meat On The World’s Table

44. Communications Impact? • Percent of Japanese “confident in purchasing U.S. beef” at 26% in 3rd quarter, up from 20% in 2nd • Percent “confident in U.S. food inspection system” at 22%, up from 18% • Trend is moving in the right direction for the first time in two years Putting U.S. Meat On The World’s Table

45. Questions? lheinze@usmef.org 303-623-6328 www.usmef.org Putting U.S. Meat On The World’s Table