A Look Ahead for Exports and International Markets

Philip Seng

April 17, 2015

U.S. Meat Export Federation Mission

The mission of USMEF is, “To increase the value and profitability of the U.S. beef, pork

and lamb industries by enhancing demand for their products in export markets through a dynamic partnership of all stakeholders.”

Simply put, USMEF is,“Putting U.S. Meat on the World’s Table.”

Members

Comprised of nine sectors• Beef/Veal Producing and Feeding• Pork Producing and Feeding• Lamb Producing and Feeding• Packing and Processing• Purveying and Trading, including

Jobbing, Retailing and Wholesaling

• Oilseeds Producing• Feedgrains Producing• Farm Organizations• Supply and Service

Organizations/Agribusiness

USMEF’s Global Network

2014 USMEF Budget

Other

4%

USDA

42%

Pork

14%

Soy

8%

Corn

6%

Beef

26%

$39.4 Million

The Roles of USMEF

• International Marketing

• Technical Services

• Trade Servicing

• Issues Management

• Trade Access

• In-Market Facilitation

• International Shows/Teams

U.S. Beef and BVM Export Volume

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Me

tric

To

ns

Source: USDA/FAS

U.S. Pork and PVM Export Volume

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Me

tric

To

ns

Source: USDA/FAS

Global Competition

Spanish Ibérico Pork• Ibérico pork has a high-quality brand image

Canadian Pork

• Seminars• Promotions• Store-front Tasting• Trade shows• Consumer Advertising-Great

Nature Safety Image

Mexican Pork (MexPo)

• Promotions – renewed approach to supermarket chains

• Tasting• Seminar• Trade shows

Chilean Pork - Agro Super

Opportunities Abound! Competition Abounds!

• Hong Kong channel volatility

• Market Access-PVP program ractopamine-free

• Plant delistment issue

• Lack of access for processed pork products

Total Opportunity 2014

0 500,000 1,000,000 1,500,000 2,000,000

China/HK

Japan

Mexico

Korea

Canada

Philippines

Oceania

Singapore

Colombia

Taiwan

Chile

EU

Honduras

U.S. Imports Competitor Imports

Total Opportunity 20200 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000

China/HK

Japan

Mexico

Korea

Philippines

Oceania

Canada

Colombia

Singapore

Taiwan

Chile

EU

Honduras

U.S. Import Share U.S. Future Growth Competitor Imports

Pork Imports to Japan

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

Vo

lum

e in

MT

Market Size Total Imports US Imports

3,000

3,500

4,000

4,500

5,000

5,500

6,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Tho

us

mt

Japan's Consumption

Meat

Seafood

Seafood vs. Meat Consumption

Japanese Pork Market 2000-2014

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

Total Imports Us Imports EU Imports

Vo

lum

e in

MM

T

2000 2014

+44%

+81%

+15%

Japanese Pork Market 2009-2014

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

Total Imports Us Imports EU Imports

Vo

lum

e in

MM

T

2009 2014

+20%

+90%

+3%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

($ 1,000)

Year

USMEF’s JAPAN PORK BUDGET 1991 - 2015

Pork Checkoff

Pork FAS

Budget History

Competitors in the Market

• Canada

• Denmark

• Mexico

• Chile

• China

• Australia

• Spain

• France

• Italy

• Hungary

• Austria

• Finland

• Germany

• Netherlands

• Poland

• Belgium

• Ireland

• Sweden

• Korea (processed)

• Thailand processed)

• China (processed)

• JAPANESE PORK

Competition from 25 countries

Denmark

Strategy: Expand U.S. Chilled Pork

Huge opportunity to expand market share!

U.S. Chilled Pork:

187,733

16%

8%

1%0%

75%

U.S.

Canada

Mexico

Others

Domestic

A-COOP SPF Pork ISHIKAWA-ken Pork ASAHI-Pork AKITA Delicious Pork OKUIRASE Garlic Pork

OBIHIRO Black Pork ECHIG MOCHI-BUTA

OBIHIRO Natural Pork KUBIKI High-Pork OKUIRASE Herb Pork

KAMIYA Pork HIDA KEN-TON SHIUNZI Paionior-Pork High quality Shonai Pork

White-Tiger in the north MINO KEN-TON TOCHIO Pork HIRAMAKI SANGEN Pork Clean Pork

SHIRETOKO Pork MINO Healthy Pork SHIRONE Pork Sticking to Pork

TAKIGAWA Healthy Pork TOUHAKU SPF Pork TSUNAN Pork

CHITOSE-USAMI SPF Pork NIHONKAI Pork YAMAZAKI Pork

AGURO Farm Pork HUKUI Pork BOKUZYOU-Chan Pork

TOKACHI SPF Pork BISEI-TON MIYUKI MOCHI-BUTA SINSHYU SPF Pork

SINSHYU NOBATA KOMAKUSA SPF Pork

NAGANUMA SPF Pork GAMOUNO Fresh Pork YOTSUBA Pork SINSHYU HOUBOKU-BUTA White-lily Pork

Natural Pork TON-OU SINSHYU MIYUKI-Pork TATEGAMORI Plateau Pork

BIRATORI Healthy Pork TATESHINA-SANROKU Pork TOKIWA Pork

HURANO SPF Pork KYOTO Pork TOYAMA Pork NANBU Pure Pork

HOKUREN SPF Pork SHIKANO Plateau Pork NANBU Royal Pork

MORIMATI Pork

ISIKOSHI-MIYAGINO Pork

ITOSIMA-BUTA COOP Country Pork

hakata SUI-TON MIYAGINO Pork

HAKATA MOCHI-BUTA MITAGI Silk Pork

MIYAGINO-L Pork

MIYAGINO Country Pork

HIZEN Cherry Pork MIYAGINO-HASAMA Pork

WAKAKUSU Pork

ABUKUMA Natural Pork

AZIWAI Wheat Pork

UNZEN UMAKA-BUTA

AKAGI Pork

Queen Pork

AMAKUSA UME-NIKU Pork ZYOSHU Natural Pork

KUMAMOTO SPF Pork High Pork

HATSURATSU Pork

Pure Pork 21

EBINO Planteau Pork MOCHIBUTA

EBINO Black Pork

BISUZU-BUTA AWA Pork AKABANE Pork ATAGAWA Fresh Pork SAINOKUNI Black Pork

KANNONIKE Pork ATSUMI Pork ENSHYU Black Pork SAIBOKU Golden Pork KING Pork

KIRISIMA Black Pork TAIYO Pork ENSHYU Dream Pork Super Golden Pork HAZIME-Chan Pork

Crown Pork Coop SANUKI MOCHI-BUTA CHITA Cherry Pork OKUYAMA Plateau Pork Flower garden Black Pork YAMANISHI Farm

TAKACHIHO SANUKI YUME-BUTA Delicious Pork ORAN PIG Rose Pork

HAZAMABO KINAKO-BUTA AZIWAI BUTA Natural Pork KAKEGAWA Fresh Pork Rose Pork

HIKUKA TON-Chan MIKAWA Pork KINKA Pork Fuzizakura Pork

MIYAZAKI HAMAYUU-Pork HUJI Natural Pork

WAKAME-BUTA KAGOSHIMA-OX IKI-IKI Pork Smell Pork

KAGOSHIMA Black Pork ASAGIRI Pork HAMAKITA Healthy Pork Royal f amily of natural HAYASHI SPF

SATSUMA Plateaus Pork IYO MOCHI-BUTA SUSONO Pork SHONAN UMAKA-BUTA BOUSO Pork

AGUU BUTA Natural Organic Pork New Flavor Pork SHONAN Pork

KOTOBUKI BUTA NETSUKA Pork TANZAWA Plateau Pork

RYUKYU CHOUZYU-BUTA CHA-BI BUTA IGA-BUTA Herb Pork TOCHIGI Lala Pork

RYUKYU Royal Pork NEO SPF Pork SUZUKA Plateau Pork Golden-banded lily Pork NITSUKO U-Pork

RYU-ZYU BUTA MATSUZAKA-BUTA MIZUHONO Pork

RYU-BI BUTA MIE Clean Pork

KUMAMOTO-ken

MIYAZAKI-ken

KAGOSIMA-ken

HUKUSHIMA-ken

MIYAGI-ken

IBARAGI-ken

GUNMA-ken

SAITAMA-ken

HUKUOKA-ken

SAGA-ken

NAGASAKI-ken

TOCHIGI-ken

CHIBA-ken

OKINAWA ken

SHIZUOKA-kenAICHI-ken

EHIME-ken

TOKUSHIMA-ken

KAGAWA-ken

KANAGAWA-ken

Purity Black Pork ROTSUPAKU

YAMAGUCHI-ken

OKAYAMA-ken

YAMANASHI-ken

MIE-ken

HIROSHIMA-ken

TOTSUTORI-ken

TOYAMA-ken

ISHIKAWA-ken

GIHU-ken

HUKUI-ken

SHIGA-ken

KYOTO-hu

AKITA-ken

YAMAGATA-ken

NAGANO-ken

NIGATA-ken AOMORI-ken

DOSANKO Pork of the 21st century

IWATE-ken

OKUIRASE Natural Black Pork

KAWAKEN Sticking to SPF Pork

HASEGAWA Natural Ripe Pork

HATSUKAISANROKU Healthy Pork

KOMAGATAKESANROKU Pork

HIRAMAKI Peach garden Pork

HOKKAIDO

Almost 400

brands of pork in Japan

Importance of Brands/Stories

Mexico Market Background

• Excellent market access

• Price sensitive market (processors often inject water to keep prices lower)

• Competition from increasing poultry imports

• Six countries exporting to Mexico

• Historically, domestic production does not increase as fast as consumption

Pork Competition in Korea

22 countries are

competing for

Korean Market

2014 Jan-Dec

U.S.A., 108,036

CHILE, 25,169

CANADA, 34,850

FRANCE, 10,529 AUSTRIA, 16,738 HOLLAND, 9,988

SPAIN, 38,090

BELGIUM, 10,562

MEXICO, 8,880

HUNGARY, 6,089

GERMANY, 65,512

DENMARK, 9,721

POLAND, 5,806

FINLAND, 3,178 ENGLAND,

1,848 SWEDEN, 1,104

IRELAND, 5,867 AUSTRALIA, 960

Korea Pork PS&D

Source: MIFAFF

Unit : 1,000 M/T

93.0%

86.9%

80.7%76.7%

74.1%76.5% 77.5%

80.9%

61.2%

77.1%81.3%

74.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

200

400

600

800

1000

1200

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Domestic Production

Consumption

Self Sufficiency Rate

2014 Total Opportunity

0 400,000 800,000 1,200,000 1,600,000 2,000,000

China/HK

Japan

Egypt

Korea

EU

Mexico

Chile

Philippines

Taiwan

U.S. Imports Competitor Imports

2020 Total Opportunity

0 400,000 800,000 1,200,000 1,600,000 2,000,000

China/HK

Japan

Egypt

Korea

EU

Mexico

Chile

Philippines

Taiwan

U.S. Imports U.S. Growth Competitor Imports

Funded by the Beef Checkoff.

Evolving Image

Funded by the Beef Checkoff.

CanadaTheme: “Present from Great Nature”

Funded by the Beef Checkoff.

Canadian Promotion in South Korea

• “Delicious Canada” promotion at five hotels sponsored by Canadian Ministry of Agriculture, Tourism Board, Alberta State & Canadian Embassy

Funded by the Beef Checkoff.

Mexico

Messages

• “Safety”

• “Anxiety-free”

• “Tasty” beef from

Sunshine Country

Activities

• Trade

shows/seminar

• Promotion

Funded by the Beef Checkoff.

Targeted Advertising

Market Access: When and What Will it Look Like?

Intense Competition 71 countries exported beef to HK in 2014

Brazil 51.4%

U.S. 18.6%

Australia4.9%

Argentina4.3%

Paraguay3.4%

Canada2.5%

UK2.4%

Ireland2.0%

New Zealand1.5%

Uruguay1.3%

Others7.8%

2014 Market Share

Brazil

U.S.

Australia

Argentina

Paraguay

Canada

UK

Ireland

New Zealand

Uruguay

Others

Reimage U.S. Beef - Japan

Consumer Perception of U.S. Beef

22.9%

65.1%

0%

10%

20%

30%

40%

50%

60%

70%

2007 2014

Would You Buy U.S. Beef?

Yes!

Yes!

Source： USMEF Online Tracking Survey, 300 samples

U.S. and Australia Market Share

2%

8%12%

15%19%

24%26%

36%38%

85%81%

76%73%

68%

63%60%

52% 52%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2006 2007 2008 2009 2010 2011 2012 2013 2014

Budget History

$-

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

USMEF’s Japan Beef Budget1995-2015

MAP Beef

Beef Checkoff

Beef Import Trend

325,823

160,096

178,221

212,765 219,604

210,640 224,725

261,159

307,613

264,374 267,578

279,706

224,036

25,427

721 0 14,111

31,988

59,486

83,570

115,334 95,082

92,145 101,774

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Total Beef Import

US Beef Import

Unit : M/T

U.S. Beef Purchasing Intention is Up

Sep 2012 Mar 2013 Sep 2013 Jun 2014 Dec 2014

Do you have an intention to consume U.S. beef?