Reaching Global Markets Fulfilling Your Needs

USDA Agricultural Outlook Forum

Thierry Murad

25 February 2011

USDA Agricultural Outlook Forum

Poultry Export Markets:Present and Future..

Established in 1972$ 1 Billion privately held company headquartered in Atlanta, Ga.Seamless global office network of 12 integrated sites.Portfolio of business spans 6 continents & 140 countries.Over 825,000 metric tons transported annually (truck, rail & ocean).Over 25 languages spoken.#1 US Poultry Exporter *(700 million+ lbs to over 100 countries..)

* Source: Piers

AJC Brand Family

Brands Sold In More Than 60 Countries Diverse Products Year-Round Supply

Marketing & Promotional Support Customized packing

Founded in 1984, USAPEEC is a non-profit, industry-sponsored trade organization dedicated to increasing exports of U.S. poultry and egg food products in all foreign markets.

USAPEEC is also a cooperator organization sanctioned by the Foreign Agricultural Service of the U.S.D.A. As a cooperator, USAPEEC administers export promotion funds allocated under the USDA's Market Access Program and Foreign Market Development program.

USAPEEC members account for more than 90 % of all poultry and egg exports, and include nearly all major U.S. poultry and egg producing and processing companies, as well as many international trading firms. Associate members include steamship lines, cold storage facilities, freight forwarders, port authorities and others whose businesses benefit from thriving poultry and egg exports.

So why’s poultry such a big deal ?..

The U.S. poultry industry has 62,000 small and medium sized contract farmers that produce for the broiler and turkey industry companies.*

U.S. exports of poultry and eggs have created over 50,400 jobs ! *

* Source: USAPEEC

Where we’ve been, where we are, where we’re going…

U.S. Broiler Exports Have Increased U.S. Broiler Exports Have Increased Rapidly Since 1985Rapidly Since 1985

0.00.51.01.52.02.53.03.54.04.5

$0.0$0.5$1.0$1.5$2.0$2.5$3.0$3.5$4.0$4.5

Quantity (left axis, million tons)Value (right axis, billion US$)

Source: USDA/FAS

An average increase of 14.6% in volume and 14.8% in value in 1985-2010

Share of Broiler Production ExportedShare of Broiler Production Exported

3.1% in 1985

21.7%

20.0%

0%

5%

10%

15%

20%

25%

30%

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Source: USDA/FAS

U.S. Turkey Exports Since 1985U.S. Turkey Exports Since 1985

050

100150200250300350400

1,00

0 to

ns

$0

$100

$200

$300

$400

$500

mill

ion

US$

Quantity (left axis)

Value (right axis)

Source: USDA/FAS

In 1985-2010, turkey exports increased at an average of 13.0% in volume and 14.7% in value.

Share of Turkey Production Exported Share of Turkey Production Exported

9.6%

10.6%11.0%

0.9% 0%

2%

4%

6%

8%

10%

12%

14%

16%

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Source: USDA/FAS

2010 Egg Exports Set New 2010 Egg Exports Set New Record in ValueRecord in Value

0

50

100

150

200

250

300

350

mill

ion

doze

n

0255075100125150175200

mill

ion

U.S

. dol

lars

Quantity (left axis) Value (right axis)

Source: USDA/FAS

$0

$1,000

$2,000

$3,000

$4,000

$5,000 Other poultryTable egg and egg productsTurkey ValueBroiler Value

U.S. Poultry & Egg Export Value(In million U.S. dollars)

Source: USDA/FAS

Major Poultry Production Countries/Regions Major Poultry Production Countries/Regions ((2010)2010)

Production in the top three countries - USA, China, and Production in the top three countries - USA, China, and Brazil accounted for 54% of world total production.Brazil accounted for 54% of world total production.

Source: USDASource: USDA

Rest Of the World30.6%

China17%

Mexico3.7%

EU-2711.7%

Brazil15.4%

USA21.6%

Major Poultry Exporting Nations/Regions (Major Poultry Exporting Nations/Regions (2010)2010)

The USA and Brazil accounted for almost 80 percent of The USA and Brazil accounted for almost 80 percent of total global exports.total global exports.

Source: USDASource: USDA

Brazil40%

USA36%

Thailand5%

EU-279%

China3%

Rest of the World7%

=

Global Economic Forecasts2010 – 2019

* Global Economic Growth to Rebound to 3.3 % !

Largest Projected Growth in Developing Economies• Asia (8%); China → 10% GDP• South Asia (8%); India → 8.7%• Eastern Europe/Poland/FSU & Russia: 5.2 %• Middle East: 5%• Africa: 5% (North Africa 5%; Sub Sahara 5.3%)

• Source: USDA & U.S. Census Bureau

Global Economic Forecasts2010 – 2019

World Population growth projected 1.1 %(1980’s-1990’s: world population growth averaged 1.7 %)

• Major Regions that will average greater than 1.1%:- Africa: 2.2 % (North Africa 1.5 %; Sub Sahara 2.3 %)

- Southeast Asia (ie Malaysia/Philippines) 1.7-1.8 %

- India/Bangladesh/Pakistan 1.3%

- Middle East 1.5 %

• China & India combined represents 37 % of the world’s population.

Global Economic ForecastsGlobal Economic Forecasts2010 - 20192010 - 2019

Some Nations with Declining Populations:

Germany

Italy

Spain

Russia / Ukraine

Factors Driving World Meat DemandIncome Growth – Consumers diversify diets: More meat, dairy products, vegetables and processed foods

Increased Demand for feedstuffs and higher valued food

Urbanization

At a 1.1% growth rate, there will be nearly 75 Million additional mouths to feed each year!!

Top U.S. Broiler Export Markets Top U.S. Broiler Export Markets

Iraq 4.5%

Hong Kong4.6%

Cuba4.1%

ROW36.1%

Mexico10.4%

Russia20.5%

China19.9%

=

Mexico13.0%

Hong Kong13.0%

Russia9.8%

ROW51.5%

Iraq4.1% Angola

4.4%Cuba4.2%

20102009

Poultry Exports benefit everyone..

Poultry exports benefit both U.S. producers and consumers.The reason: U.S. consumer preference for breast meat, coupled with foreign consumers preference for dark meat (ie leg quarters) and even chicken paws. Thanks to increased exports, U.S. consumers enjoy lower prices of breast meat.Exports are expected to play a more important role in driving poultry production in the future as U.S. domestic consumption levels off.

Source: USAPEEC

It’s not that easy… obstacles to overcome:

Market access issues.Animal disease.International competition; local producers.Increased corn/feed costs.Politics.. (we must support trade based on sound science, not political science).

The opportunities ahead look good !

U.S. poultry and egg industry can supply quality, disease-free products to a growing world.

Broiler meat is most competitive value in the World !

Developing Nation Growth & Population Increases, especially in developing countries, means greater demand for broiler meat.

Broilers are the most energy efficient protein; the most efficient converter of feed. Also, environmentally friendly production; demands less water, uses less arable land; smaller carbon footprint.

Conclusion

Exports will play an ever more important role in driving poultry production in the future as U.S. domestic consumption levels off (this is also good news for the U.S. corn and soybean industries).Despite various obstacles, poultry export volumes continue to grow; more market diversification.

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