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Transcript of Beef Industry Summer Conference Joint International Marketing Committee Trade Update Erin Daley...
Beef Industry Summer Conference
Joint International Marketing CommitteeTrade Update
Erin DaleyEconomist, USMEF
July 31, 2010Denver, Colorado
Global Beef Overview
Beef Consumption Growth
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
U.S. +4.4% or +538 Thous MT
Rest of World: +17% or nearly an additional 9 million MT which is equal to roughly 80% of U.S. production in 2010
Thous MT
Source: OECD/FAO 2010 Ag Outlook, carcass wt equivalent
Growth comparing 2009 to 2019 forecast:
Per capita beef consumption Lots of room for growth outside the U.S.
0
10
20
30
40
50
60Kg/capita
Source: USDA/FAS 2010 estimate
U.S. Export Growth Outpacing the Competition
January-May Beef Exports
0
100,000
200,000
300,000
400,000
500,000
600,000
2008
2009
2010
+4%-9%
+25%
+3%+18%
Source: Global Trade Atlas, excludes variety meats
Metric Tons
-45%
+17%
+3%
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
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
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.
HK4%
Other3%
Japan2%
11%
U.S.80%
Mexico
Jan-May Beef Import Status
0
50
100
150
200
250
300
350
4002008 2009 2010
Source: GTA and USMEF est, excludes variety meats
Thous MT
-15%
+21%
+4%
-7%-21%
+1%
+20%
-5%
+20%
+9%
Who is the Competition?
Importing country: top suppliers, 2009 mkt 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%
U.S. Beef Exports, Recovery
0
200
400
600
800
1,000
1,200
1,400Variety Meats
Beef
Source: USDA/USMEF
Thousand MT2010F: beef +17%, variety meats steady= 1 MMT, +12% valued at $3.7 billion, +21%; just 3% less than ‘03
U.S. Beef Exports to Top Markets
0
50
100
150
200
250
300
350
400
200320092010F
Source: USDA/USMEF Forecast, thousand MT, includes variety meats
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(based on annual export value compared to 2003; estimated for 2004 through 2010)
Source: USDA/FAS data; USMEF estimates
Exports are up this year…Weekly U.S. beef exports through July 15
6%
6%4%
26%
18%
14%
14%
12%
MEXICO
KOREA
JAPAN
VN/HK
CANADA
TAIWAN
RUSSIA
OTHER
1. Mexico -10%2. Korea +114%3. Japan +29%4. Vietnam/HK +39%5. Canada 0%6. Taiwan +27%7. Russia: 16,746 MT
(already a new annual record)
Total: +26%
Source: USDA/FAS Weekly Export Report
Mexico
Japan
KoreaVN/HK
Canada
Taiwan
Russia
Weekly U.S. Beef Exports to Asia*
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1/10
2/10
3/10
4/10
5/10
6/10
7/10
8/10
9/10
10/1
011
/10
12/1
0
2008
2009
2010
Source: USDA/FAS, metric tons, *Korea, Japan, Vietnam, Hong Kong, Taiwan
Jan-July 15: +52%
Growth led by Korea & Japan
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1/7/2010 3/7/2010 5/7/2010 7/7/2010
Korea
JapanVietnam/HK
Taiwan
2010 Weekly Beef Exports to Top Asian Markets
Source: USDA/FAS
Metric Tons
Weekly Short Rib Prices
$1.00$1.20$1.40$1.60$1.80$2.00$2.20$2.40$2.60$2.80$3.00$3.20$3.40$3.60$3.80
2007
2008
2009
2010
Source: USDA/AMS $/pound
Adding ~$15-$20/head
$293 $229 $360
$223
Cutout: $1.54/lb 800 lb carcass
$28$58
$41
Total Cut-out Value $1,232
+$133 from year-ago! +$39 from Chuck! +$37 from Rib +$24 from Round +$21 from Loin
Maximizing Carcass Value
U.S. Monthly Meat Exports to Mexico
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
Pork
Poultry
Beef
Source: USDA/USMEF, GTA, Metric Tons, includes variety meats
Still a price-sensitive market
Asia Has Been the Growth Market Weekly U.S. Beef Exports
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Mexico
Asia
Source: USDA/FAS, metric tons
Weekly U.S. Beef Exports to Russia, back in business
0200400600800
1,000
1,2001,4001,6001,8002,000
2008
2009
2010
Source: USDA/FAS, metric tons
16,746 MT through July 15, 2010 surpassing 2008 annual record: 15,644 MT
Sources of Risk:Market Exchange Rates
Yen
Peso Ruble Won
Sources of Risk:Competitor Exchange Rates
Real A$ C$
Euro
Our Competition…
Who will meet the growing global demand?
-20%
-15%
-10%
-5%
0%
5%
10%Forecast Change in Beef Production 2010/2009
Production Trends for the Top Beef Exporters
0
2,000
4,000
6,000
8,000
10,000
12,000
U.S.
Brazil
Argentina
Australia
Canada
Thous MT
Export Dependence?
0%
2%
4%
6%
8%
10%
12%
14%
2000 2002 2004 2006 2008 2010 2012 2014
Source: USDA/USMEF, percent of beef muscle cuts exported
Export Dependence?
0%
10%
20%
30%
40%
50%
60%
70%
2010 Estimated Exports as Percent of Production
A Challenge to the U.S. Industry
-150
-100
-50
0
50
100
150
200
Change in U.S. Production Change in Global BeefImports
(1,000 MT)
-1.3%
+4%
Source: USDA Ag Outlook, Feb 2010, carcass weight equivalent
2012 Forecasts
EU Imports Chilled Beef
• Currency issue;
• Update on first quota year under the new agreement