Transcript Beef Industry Summer Conference

International Marketing
Trade Update
July 2010
Beef Consumption Growth
Thous MT
Growth comparing 2009 to 2019 forecast:
80,000
70,000
60,000
Rest of World: +17% or
nearly an additional 9
million MT which is equal
to roughly 80% of U.S.
production in 2010
50,000
40,000
30,000
20,000
10,000
20
18
20
16
20
14
20
12
20
08
20
06
20
04
20
02
20
00
0
20
10
U.S. +4.4% or +538 Thous MT
Source: OECD/FAO 2010 Ag Outlook, carcass wt equivalent
2
Per Capita Beef Consumption
Kg/capita
Lots of room for growth outside the U.S.
60
50
40
30
20
10
0
a
in
Ch an
iw
Ta n
pa
Ja a
re
Ko ia
ss
Ru 7
-2
EU ico
ex
M da
na ia
Ca ral
st
Au il
az
Br
S. y
U. ua
ug na
Ur nti
ge
Ar
Source: USDA/FAS 2010 estimate
3
U.S. Export Growth Outpacing Competition
January-May 2010 Beef Exports
Metric Tons
600,000
500,000
+4%
-9%
400,000
+25%
300,000
+3% +3%
200,000
2008
2009
2010
-45%
+18%
+17%
100,000
0
Pa
y
ina
nt
y
s
d
ate
n
ala
a
gu
ra
ge
Ar
ua
Ze
a
ad
ug
Ur
n
Ca
w
Ne
a
St
li
tra
il
ed
it
Un
s
Au
az
Br
Source: Global Trade Atlas, excludes variety meats
4
Australia’s Exports
Down 6% in first half 2010, 436,095 MT
Down 4% to Japan
Down 28% but recovering to the U.S.
Up 17% to Korea but losing Mkt Share to U.S.
(exports to these top 3 markets accounted for
77% of Australia’s exports)
Down 10% to Indonesia
Largest growth: Russia and Middle East
5
Brazil’s Exports
First half total: 560,000 MT, +3.5%
Top markets: Russia, Iran, EU-27, Egypt, Hong
Kong
Growth to Iran, 95,000 MT, +283%
Some recovery in EU but chilled exports are less
than one quarter of shipments prior to 2008;
finally over 2,000 farms approved for EU
Still seen as leading global supplier of the future
6
Canada’s Exports
Diversifying away
from U.S., market
access negotiation
success: Hong Kong,
China, Vietnam
Traceability
More cattle on feed in
Canada, more
slaughter fed cattle
and cows to U.S.
Mexico
7
Jan-May Beef Import Status
Thous MT
400
-15%
2008
350
2009
2010
300
250
+4%
200
+1%
+9%
150
-5%
100
+21% -21%
-7%
+20% +20%
50
0
U
.S
.
R
EU
K
M
Ta
Ja
H
C
C
o
us
K/
a
h
e
iw
pa
re
na
-2
xi
ile
C
si
c
an
7
a
n
da
hi
o
a
na
/V
N
Source: GTA and USMEF est, excludes variety meats
8
Who is the Competition?
Importing country: Top suppliers, 2009 market share
Mexico: U.S. 80%, Can 16%
Canada: U.S. 66%, NZ 18%, Aus 7%, Urg 7%
Japan: Aus 75%, U.S. 14%, NZ 6%
Korea: Aus 58%, U.S. 26%, NZ 14%
Hong Kong/Vietnam: India 35%, U.S. 23%, Bz
22%
9
U.S. Beef Exports, Recovery
Thousand MT
1,400
1,200
2010F: beef +17%, variety meats
steady= 1 MMT, +12% valued at $3.7
billion, +21%; just 3% less than ‘03
Variety Meats
Beef
1,000
800
600
400
200
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
0
20 9
10
20 F
11
20 F
12
20 F
13
20 F
14
F
0
Source: USDA/USMEF
10
U.S. Beef Exports to Top Markets
Thous MT
400
350
300
250
2003
2009
2010F
200
150
100
50
0
an
iw
EU
Ta
st
i na
Ch
ia
ss
Ru
G
ea
r
Ko
Ea
n
pa
d
Mi
Ja
ico
da
na
Ca
x
Me
Source: USDA/USMEF Forecast, thousand MT, includes variety meats
11
Lost beef export value due to BSE
(2004-2010)
Japan: $8 billion
(-$70 million/month
currently)
Korea: $4.7 billion
Others: >$1 billion
Total: ~$14 billion
Source: USDA/FAS data; USMEF estimates
(based on annual export value compared
to 2003; estimated for 2004 through 2010)
12
Exports are up this year…
Weekly U.S. beef exports through July 15
1.
2.
3.
4.
5.
6.
7.
Mexico -10%
Russia 6%
Korea +114%
6%
Taiwan
Japan +29%
Vietnam/HK +39%
12%
Canada 0%
Canada
Taiwan +27%
14%
Russia: 16,746 MT
VN/HK
(already a new annual
record)
Total: +26%
4%
26%
Mexico
18%
Korea
14%
MEXICO
KOREA
JAPAN
VN/HK
CANADA
TAIWAN
RUSSIA
OTHER
Japan
13
Source: USDA/FAS Weekly Export Report
Weekly U.S. Beef Exports to Asia*
Jan-July 15, 2010: +52%
8,000
7,000
6,000
5,000
4,000
3,000
2008
2009
2010
2,000
1,000
12
/1
0
11
/1
0
10
/1
0
9/
10
8/
10
7/
10
6/
10
5/
10
4/
10
3/
10
2/
10
1/
10
0
Source: USDA/FAS, metric tons, *Korea, Japan, Vietnam, Hong Kong, Taiwan
14
Growth Led By Korea & Japan
2010 Weekly Beef Exports to Top Asian Markets
Metric Tons
8,000
7,000
6,000
Taiwan
5,000
4,000
3,000
Vietnam/HK
Japan
2,000
1,000
Korea
1/
7/
2
1/ 010
21
/2
0
2/ 10
4/
2
2/ 010
18
/2
0
3/ 10
4/
2
3/ 010
18
/2
0
4/ 10
1/
2
4/ 010
15
/2
4/ 01
29 0
/2
5/ 01
13 0
/2
5/ 01
27 0
/2
6/ 01
10 0
/2
6/ 01
24 0
/2
0
7/ 10
8/
20
10
0
Source: USDA/FAS
15
Weekly Short Rib Prices
$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
Adding ~$15-$20/head
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
16
Maximizing Carcass Value
$293
$229
$360
$223
$58
$28
$41
Total Cut-out
Value $1,232
Cutout: $1.54/lb
800 lb carcass
+$133 from year-ago!
+$39 from Chuck!
+$37 from Rib
+$24 from Round
+$21 from Loin
17
U.S. Monthly Meat Exports to Mexico
55,000
Still a price-sensitive market
50,000
45,000
40,000
Pork
Poultry
Beef
35,000
30,000
25,000
20,000
15,000
April h
Marc
Feb Jan
2010
Dec
Nov
Oct
Sept
Aug
July
June
May
April
Mar
Feb Jan
2009
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Fe b
Jan
Source: USDA/USMEF, GTA, Metric Tons, includes variety meats
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1/
1
2/ 0/0
1 8
3/ 0/0
1 8
4/ 0/0
1 8
5/ 0/0
1 8
6/ 0/0
1 8
7/ 0/0
1 8
8/ 0/0
1 8
9/ 0/0
10 10/ 8
0
11/10/ 8
0
12/10/ 8
/1 08
1/ 0/0
1 8
2/ 0/0
1 9
3/ 0/0
1 9
4/ 0/0
1 9
5/ 0/0
1 9
6/ 0/0
1 9
7/ 0/0
1 9
8/ 0/0
1 9
9/ 0/0
10 10/ 9
0
11/10/ 9
0
12/10/ 9
/1 09
1/ 0/0
1 9
2/ 0/1
1 0
3/ 0/1
1 0
4/ 0/1
1 0
5/ 0/1
1 0
6/ 0/1
1 0
7/ 0/1
10 0
/1
0
Asia Has Been the Growth Market
Weekly U.S. Beef Exports
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
Mexico
Asia
0
Source: USDA/FAS, metric tons
19
Weekly U.S. Beef Exports to Russia,
back in business
10
/8
11
/8
12
/8
2008
2009
2010
9/
8
8/
8
7/
8
6/
8
5/
8
4/
8
3/
8
16,746 MT through July 15, 2010
surpassing 2008 annual record: 15,644 MT
2/
8
1/
8
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
Source: USDA/FAS, metric tons
20
Who will meet the growing
global demand?
10%
Forecast Change in Beef Production 2010/2009
5%
0%
-5%
-10%
-15%
-20%
da
na
Ca a
i
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Ru o
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M alia
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Au
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In
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Ar
a
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Ch
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-2
EU
il
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Br
.
ld
or
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U.
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21
Production Trends for the
Top Beef Exporters
Thous MT
12,000
10,000
U.S.
Brazil
Argentina
Australia
Canada
8,000
6,000
4,000
2,000
20
12
20
10
20
08
20
06
20
04
20
02
20
00
0
22
Export Dependence?
14%
12%
10%
8%
6%
4%
2%
0%
2000
2002
2004
2006
2008
2010
2012
2014
Source: USDA/USMEF, percent of beef muscle cuts exported
23
Export Dependence?
2010 Estimated Exports as Percent of Production
70%
60%
50%
40%
30%
20%
10%
0%
ay
in
nt
ge
Ar
u
ug
Ur
.
da
na
Ca
S
U.
a
lia
ra
st
Au
il
az
Br
24
A Challenge to the U.S. Industry
2012 Forecasts
(1,000 MT)
200
150
100
50
+4%
0
-50
-100
-150
-1.3%
Change in U.S. Production
Change in Global Beef
Imports
Source: USDA Ag Outlook, Feb 2010, carcass weight equivalent
25