Transcript Slide 1

Foreign Marketing Update
Fiscal Year 2010
Global Beef & Variety Meat Exports
(Billion
pounds)
3.0
2003 Exports
2.81 billion lbs
2008 Exports
2.17 billion lbs
2010 Forecast
2.2 billion lbs
2.5
2.0
BVM
Beef
1.5
1.0
0.5
0.0
F
10
20
09
20
08
20
07
20
06
20
05
20
04
20
03
20
Source: USDA/USMEF Forecast
2
New Factors and Opportunities
Global Economic Recovery
New signs of optimism in most markets
Better opportunity to increase global consumption
More competitive exchange rate, as many currencies
strengthen vs. U.S. dollar
Market Access
Some progress in Asia, but restrictions hamper growth
in some markets
Effects of BSE still linger, despite international
guidelines
Duty-free access to Europe shows promise
Marketing Programs
Improve consumer perceptions
Educate trade on attributes of U.S. beef
Emphasize total carcass utilization
3
Carcass Value Maximization
Rounds, chucks,
clods and variety
meats to Mexico
Rounds, livers,
tongues, hearts,
kidneys to Russia
Ribeyes, strip loins,
tenderloins to EU
Livers, rounds to Egypt
Short ribs, chuck short ribs,
back ribs, chuck roll,
brisket, femur bones,
intestines to Korea
Short plate, short ribs to
Greater China
Source: USMEF
Short plate, chuck eye roll,
chuck short ribs, boneless short
ribs, tongues, skirts, hanging
tenders to Japan
4
Exports have been positive this year…
Weekly U.S. Beef Exports through Aug. 19, 2010
1.
2.
3.
4.
5.
6.
7.
RUSSIA OTHERS
5%
4%
TAIWAN
6%
Mexico -7%
Korea +133%
Japan +30%
VN&HK
Canada +4%
12%
Vietnam/HK +19%
Taiwan +34%
Russia 18,382 MT,
already a new annual
record
Total: +27%
MEXICO
27%
CANADA
13%
KOREA
18%
MEXICO
KOREA
JAPAN
CANADA
VN&HK
TAIWAN
RUSSIA
OTHERS
JAPAN
15%
Source: USDA/FAS Weekly Export Report
5
Weekly U.S. Beef Exports to Asia*
Jan-Aug 19: +51%
Source: USDA/FAS, metric tons, *Korea, Japan, Vietnam, Hong Kong, Taiwan
6
1/
7/
1/ 201
21 0
/2
2/ 01
4/ 0
2/ 201
18 0
/2
3/ 01
4/ 0
3/ 201
18 0
/2
4/ 01
1/ 0
4/ 201
15 0
/
4/ 201
29 0
5/ /201
13 0
/
5/ 201
27 0
6/ /201
10 0
/
6/ 201
24 0
/2
7/ 01
8/ 0
7/ 201
22 0
/2
8/ 01
5/ 0
8/ 201
19 0
/2
01
0
Growth led by Korea & Japan
Metric Tons
4,000
3,000
1,000
2010 Weekly Beef Exports to Top Asian Markets
8,000
7,000
Taiwan
6,000
5,000
Vietnam/HK
Japan
2,000
Korea
0
Source: USDA/FAS
7
Value of Exports per Head Slaughtered
2003: $136.46
2010F: $145-$150
$160
$140
$120
$100
$80
$60
$40
$20
May 2010: $160!
$0
19 19 19 19 19 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
F
Source: USDA/USMEF, steer & heifer slaughter
8
Maximizing Carcass Value
$307
$224
$392
$254
$60
$25
$43
Total Cut-out
Value $1,305
Cutout: $1.63/lb
800 lb carcass
+$156 from year-ago!
+$44 from Loin
+$41 from Chuck!
+$31 from Round
+$26 from Rib
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Soaring Short Rib Prices Add Value
Adding ~$15-$30/head
$4.00
$3.80
$3.60
$3.40
$3.20
$3.00
$2.80
$2.60
$2.40
$2.20
$2.00
$1.80
$1.60
$1.40
$1.20
$1.00
2007
2008
2009
2010
1/
4
2/
4
3/
4
4/
4
5/
4
6/
4
7/
4
8/
4
9/
4
10 11 12
/4
/4 /4
Source: USDA/AMS $/pound
10
2010 Program Changes
Japan: Maximize eligible beef supply by marketing for more economical
steak cuts, while continuing to grow U.S. share of high-end market.
11
2010 Program Changes
Korea: Image campaign helped restore consumer confidence and bring
retailers and restaurants back to U.S. beef. This creates new
opportunities for promotions, consumer events, public relations.
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2010 Program Changes
Mexico: Intensify retail promotions, rebuilding demand for rounds,
chucks as economy strengthens.
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2010 Program Changes
Emerging Markets
Capitalize on Russia’s rebounding demand for muscle cuts
Grow muscle cut sales in Middle East, but maintain strong demand
for U.S. variety meat
Foster further growth in ASEAN region’s maturing retail sector
Aggressively pursue high-end market in Europe, taking advantage of
duty-free quota
Build retail momentum in Caribbean, complementing strong
presence in hotel-restaurant sector
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