Putting U.S. Meat on The World's Table

Outlook on Agriculture: International Meat Perspective Dan Halstrom Senior Vice President Global Marketing & Communication U.S. Meat Export Federation

February 2012

USMEF’s Mission 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

USMEF’s Global Footprint

World Meat Consumption Growth from 2010 to 2020F Poultry: +26% Pork: +18% Beef: +14.5%

Thousand Metric Tons

130,000 120,000 110,000 100,000 90,000

Poultry Pork Beef

80,000 70,000 60,000 50,000 40,000 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Source: OECD/FAO Agricultural Outlook June 2011, beef & pork in carcass wt equivalent, poultry in rtc

A Look at Beef

Emerging Markets

U.S. Beef Exports’ Recovery Thousand MT

2011: 1.277 MMT, +20% valued at $5.35 billion, +31%; surpassing ’03 record

1,400 1,200

Variety Meats Beef

1,000 800 600 400 200

20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 F 12 20 F 13 20 F 14 20 F 15 F

0

Source: USDA/USMEF

Exports as Percent of Production 16%

14%

12%

10%

8%

6%

4%

2%

11 20 0 1 20 9 0 20 8 0 20 7 0 20 6 0 20 05 20 4 0 20 03 20 2 0 20 01 20 00 20 9 9 19 8 9 19 7 9 19 6 9 19 5 9 19 4 9 19 3 9 19 92 19 1 9 19 90 19 9 8 19 88 19 87 19 6 8 19 5 8 19 4 8 19 3 8 19 2 8 19 1 8 19 0 8 19 79 19 8 7 19 77 19 6 7 19 5 7 19 4 7 19 3 7 19 72 19 1 7 19 0 7 19

0%

Source: USDA/USMEF (includes variety meat)

Value of Exports per Head Slaughtered $250

2011 Nov.: $219.73 $200

2010 Record: $153.09 $150

2003: $136.46

$100 $50 $0 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 20 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 Source: USDA/USMEF, steer & heifer slaughter

U.S. Beef Exports to Top Markets

400,000 350,000 300,000 250,000 200,000 150,000

2003 2010 2011est 2012F

100,000 50,000 0

ic er Am n S a C/ be rib Ca a

EU an /C g iw on Ta K ng Ho N EA AS i a ss Ru a re Ko n pa t Ja as E id M da na Ca co i ex

M

h

Source: USDA & USMEF 2012 preliminary forecast, includes variety meats

Top U.S. Beef Export Markets • Mexico – 234,888 metric tons (up 5% vs. 2010) ● value up 23% to $902.8 million • Canada – 174,122 MT (up 27%) ● value up 43% to $940.5 million • Middle East – 159,134 MT (up 33%) ● value up 38% to $318 million • Japan – 148,182 MT (up 29%) ● value up 38% to $812.1 million • South Korea – 139,663 MT (up 38%) ● value up 32% to $618.3 million

U.S. Beef Exports ‘11 vs. ‘10 (Including variety meat)

Volume: Metric Tons 130,000

120,000

110,000

100,000

2011 2010

90,000

80,000

70,000

60,000 Jan

Feb

March

April

May

June

July

Aug

Sept

Oct

Nov

U.S. Beef Exports ‘11 vs. ‘10 (Including variety meat)

Value: Millions of Dollars

$550

$500

$450

$400

2011 2010

$350

$300

$250

$200 Jan

Feb

March

April

May

June

July

Aug

Sept

Oct

Nov

Rebuilding Trust

Next Phase: World Class Beef

Holiday Newspaper/Traffic Ads

Introducing Yakiniku Cuts

Target item for 2012: Yakiniku cuts such as offal (EG: Tongue, Skirts, Intestine) and BBQ items (EG:B/L short rib, Chuck Rib).

Tokyo office will make guidebook of recommended items for 2012.

Why U.S. beef variety meat?

Unit: M/T 1 8 0 ,0 0 0

(MT) 1 6 0 ,0 0 0 1 4 0 ,0 0 0 1 2 0 ,0 0 0

(’00)

1 0 0 ,0 0 0

105,000 M

8 0 ,0 0 0

POTENTIAL

6 0 ,0 0 0 4 0 ,0 0 0

(’10) 2 0 ,0 0 0

15,000 MT 0 2000

2001

2002

2003 US

2004

Aussie

2005 Brazil

2006 NZ

2007

2008

2009

2010

Others

Source: MAFF

China Beef – The Future??

• 1.4 billion consumers • Increased standard of living • USMEF wellpositioned, prepared for access

Beef Recovery Campaign Sweepstakes campaign: U.S. beef + local food from Tohoku area

7-Eleven Promotion in Japan

Asia Beef Market Access Opportunity MARKET

CURRENT ACCESS CONDITIONS

Japan (#3)

20 months & under age verified: bone-in, boneless, offal

Korea (#4)

2003 Exports ($millions)

2010 Exports

2011 (f) Exports

$1,344

$639

$869

UTM : bone-in, boneless, offal

$797

$518

$645

Taiwan (#5)

UTM all products; no offals & ground beef (except tendon)

$76

$216

$174

HK (#8)

UTM boneless; no offal

$82

$155

$230

China

NO ACCESS

$27

-

-

Other markets in flux include Singapore, Philippines, Indonesia, Vietnam, Malaysia, Thailand

Beef: Near-term Forecast • 2011 

1.277 million MT (2.8 billion pounds)  +20% over 2010





$5.35 billion value (+31%) $202 per head export value

• 2012 

>1.3 million MT (2.9 billion pounds)  +3 to 6% over 2011

 

>$5.6 billion value (+5 to 9%) $218 per head export value

A Look at Pork

Volume of U.S. Pork Exports Million MT

2.4

2.0

1.6

1.2

0.8

0.4

0.0

10 20 08 20 06 20 04 20 02 20 00 20 98 19 96 19 94 19 92 19 90 19 88 19 86 19 84 19 82 19 80 19 78 19 76 19 74 19 72 19 70 19

Source: USDA/USMEF

Value of U.S. Pork Exports Billion USD

$6.0

$5.0

$4.0

$3.0

$2.0

$1.0

$0.0

10 20 08 20 06 20 04 20 02 20 00 20 98 19 96 19 94 19 92 19 90 19 88 19 86 19 84 19 82 19 80 19 78 19 76 19 74 19 72 19 70 19

Source: USDA/USMEF

Value of Exports per Hog Slaughtered $59.98 in Nov. – new record

$60 $50 $40 $30 $20 $10 $0

10 20 08 20 06 20 04 20 02 20 00 20 98 19 96 19 94 19 92 19 90 19 88 19 86 19 84 19 82 19 80 19 78 19 76 19 74 19 72 19 70 19

Source: USDA/USMEF, FI Hog Slaughter

U.S. Pork Exports as Percent Production 30%

25%

20%

15%

10%

5%

11 20 10 20 09 20 08 20 7 0 20 6 0 20 05 20 4 0 20 03 20 2 0 20 01 20 00 20 99 19 8 9 19 97 19 96 19 95 19 4 9 19 3 9 19 92 19 1 9 19 90 19 9 8 19 88 19 87 19 86 19 5 8 19 84 19 3 8 19 82 19 1 8 19 0 8 19 79 19 78 19 77 19 6 7 19 75 19 4 7 19 73 19 2 7 19 71 19 0 7 19

0%

Source: USDA/USMEF, includes variety meats

Top U.S. Pork Export Markets • Mexico – 477,221 metric tons (down 3% vs.

2010) ● value up 4% at $925.3 million • Japan – 451,509 MT (up 14%) ● value up 19% to $1.8 billion • Hong Kong/China – 428,683 MT (up 68%) ● value up 96% to $794,572 million • Canada – 188,250 MT (up 14%) ● value up 20% to $673,848 million • South Korea – 172,791 MT (up 126%) ● value up 176% to $453.7 million (USDA statistics compiled by USMEF for January-November 2011)

U.S. Pork Exports ‘11 vs. ‘10 (Including variety meat)

Volume: Metric Tons 220,000

210,000

200,000

190,000

2011 2010

180,000

170,000

160,000

150,000

140,000 Jan

Feb

March

April

May

June

July

Aug

Sept

Oct

Nov

U.S. Pork Exports ‘11 vs. ‘10 (Including variety meat)

Value: Millions of Dollars

$650

$600

$550

$500

2011 2010

$450

$400

$350

$300 Jan

Feb

March

April

May

June

July

Aug

Sept

Oct

Nov

Promotion at Walmart China

Pork Recovery Campaign Sweepstakes campaign: U.S. pork + local food from Tohoku area

7-Eleven Promotion in Japan

Mexico: Training, Ideal Meat Case

Pork Butt Campaign in Korea

Pork: Near-term Forecast • 2011 

2.11 million MT (4.6 million pounds)  +10% over 2010





$5.45 billion value (+14%) $54 per head export value

• 2012 

2.115 million MT (4.7 million pounds)  Up slightly over 2011

 

$5.6 billion value (Up slightly) $55 per head export value

Questions?