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Welcome to the Global Outlook Symposium

Welcome to the Global Outlook Symposium. U.S. Meat Export Federation October 29, 2007. Global Opportunities & Challenges for Red Meat Trade. Erin Daley Manager, Research & Analysis U.S. Meat Export Federation October 29, 2007. Global Beef & Pork Consumption Growth.

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Welcome to the Global Outlook Symposium

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  1. Welcome to the Global Outlook Symposium U.S. Meat Export Federation October 29, 2007

  2. Global Opportunities & Challenges for Red Meat Trade Erin Daley Manager, Research & Analysis U.S. Meat Export Federation October 29, 2007

  3. Global Beef & Pork Consumption Growth Source: OECD/FAO Agricultural Outlook 2007, Thousand metric tons

  4. Rising Incomes= Larger Market for Red Meat • Trade is the key to meeting growing demand for red meat in both developed and developing countries • Consumption is expected to increase by 11% • but trade is expected to increase by over 26% for beef and 20% for pork comparing 2007 to 2016

  5. Global Beef Export Forecast Source: OECD/FAO Outlook July, 2007; thousand MT

  6. U.S. Beef Exports- Historic & Forecast Volume Surpass 2003 volume by 2010 2007 F: +15%, 754,400 MT 2008 F: +34%- market access-Korea Source: USDA and USMEF Forecasts; BVM= Beef Variety Meats

  7. Exports help diversify our markets Liver, hearts, kidneys to Central EU and Russia Rounds, chucks, clods and variety meats to Mexico Livers to Egypt Short rib, chuck roll, intestines to Korea Short plate, short rib, tripe to China Short plate, short rib, intestines, tongues to Japan Source: USMEF

  8. Lost Beef Export Value Estimate- due to BSE • Focus on Japan, Korea, Greater China, and Russia • Cumulative for 2004-2007 • only includes lost value based on estimated exports without the BSE market disruption • Japan: Approximately $6 Billion • Korea: Approximately $3.4 Billion • Russia: $245 million • beef around $30 million • lost liver exports & premium= at least $215 million • Greater China: Approximately $650 million • Total: 10.3 Billion

  9. Annual Beef Production per Breeding Cow Beyond BSE- Production efficiencies will drive trade Restricted live imports from Canada U.S. >4 times more beef/cow than Brazil Source: USDA and USMEF estimates, pounds per head

  10. Key Pork Exporters- Historic & Outlook (Thousand MT) Forecast Annual Growth: U.S. +3-4% Brazil +6-8% Source: OECD/FAO Outlook, 2007, carcass weight equivalent

  11. U.S. Pork Exports Historic & Forecast Volume 2007 F: -2%, 1.23 MMT 2008 F: +2%- access issues; Korea 2009-2014: 4.5-5% growth Source: USDA and USMEF Forecasts; PVM= Pork Variety Meats

  12. Exports help diversify our markets Shoulder Cuts to Russia Hams to Mexico Butts, Picnics & Bellies to Korea Variety Meats to China Loins & Tenderloins toJapan Source: USMEF

  13. Production Efficiencies Continue to Drive Trade Annual Pork Production per Breeding Sow U.S. productivity: +42% Brazil productivity: +93% Source: USDA and USMEF estimates, pounds per head

  14. Market Access- Tariffs & Quotas Peru example: to zero with FTA Quotas; specific duty for pork Duty+VAT Quotas; import licenses Gate price Safeguards SSG U.S. Pork: 0 to 1.4 cent/kg Beef 4% to 26.4%

  15. U.S. Key Agreements: NAFTA CAFTA-DR Australia Chile Singapore Pending: Korea- would set standard for other country’s FTAs Peru Panama Colombia Rest of World: Chile-Korea Chile-Japan Chile-Mexico Chile-EU Mexico-Japan ASEAN Developing countries with preferential duties (in Russia) EU and Australia in negotiations with Korea and Japan MERCOSUR Bilateral and Regional Trade Agreements

  16. Global Price & Production Challenges • High Feed Prices • Low pork prices • Exchange rate dynamics • Uncertain economic growth- housing market and inflation • Protectionism driven by difficult times in domestic industry and politics • Government assistance and regulations • EU cold storage, Aussie safeguards • EU adoption of animal welfare requirements and no GMO feed

  17. U.S. Comparative Advantages- Beef • Grain-fed • High quality image • Safe • OIE Controlled Risk status • Strong food safety infrastructure- USDA Approved • Moving beyond BSE • Set global grain prices • Biofuels and weather • Grass-fed advantages when high corn prices? • Ability to specialize in containers of specific cuts to specific markets • Short ribs to Korea • Competitive costs of production • Brazil??

  18. U.S. Comparative Advantages- Pork • Safe • Consistent quality and supply • Extremely efficient • Exchange rate advantages • Market access • Limited disease and other SPS issues • 15 years of growth- strong relationships developed with trading partners • Positive image- proactive • Animal welfare • Environment • Competition regs in 2007/08 Farm Bill?

  19. Summary of Key Drivers • Market Access- Doha • Global grain production and prices • Animal welfare regulations • International standards • Enforcement of standards • Growing demand for meat protein in areas with decreasing self sufficiency • Rising incomes= demand for high quality protein • Scarce production resources and comparative advantages- maximize efficiency and minimize environmental impact • Wealthy consumers demand the highest quality and “food with a face”

  20. Thank You! For More Information: edaley@usmef.org www.usmef.org

  21. Brazil Jan-Sept. Pork Exports Russia: FMD restrictions but benefit from preferential duty and shifting EU quotas Annual Source: Global Trade Atlas, metric tons

  22. Denmark’s Pork Exports Jan-July Feed Prices; EU regulations; Japan gate price Source: Global Trade Atlas, metric tons

  23. Japan’s Pork Imports Jan-Aug Market Share 2007 U.S.: 37% Canada: 20% Denmark: 18% Source: Global Trade Atlas, metric tons

  24. Korea’s Pork Imports Jan-Aug Market Share 2007 EU-25: 43% U.S.: 26% Canada: 18% Chile: 12% Source: Global Trade Atlas, metric tons

  25. Russia’s Pork Imports Jan-June Market Share 2007 EU-25: 40% Brazil: 39% U.S.: 11% Canada: 10% Source: Global Trade Atlas, metric tons

  26. Australia’s Pork Imports Jan-Aug Market Share 2007 Canada: 36% EU-25: 33% U.S.: 30% Source: Global Trade Atlas, metric tons

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