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NPB International Trade Update

NPB International Trade Update. Becca Hendricks, VP International Marketing. US Pork in a Big World. 96% of the world population lives outside of the US …and pork is the world’s most consumed animal protein 2050: 9 billion people, 60-70% more food

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NPB International Trade Update

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  1. NPB International Trade Update Becca Hendricks, VP International Marketing

  2. US Pork in a Big World • 96% of the world population lives outside of the US …and pork is the world’s most consumed animal protein • 2050: 9 billion people, 60-70% more food • Over the next decade, increases in meat consumption: • 2.4% in developing countries • 0.9% in developed countries • US pork must (and can) remain a key global competitor

  3. 2015 Areas of Investment • Marketing and promotion • Market research • Market intelligence • New product development

  4. Export Goal By 2020, increase pork exports through access to new markets and expansion of existing markets, and achieve an increase of 2.7 billion pounds and $3.1 billion, or 9% average annual increase in value and quantity compared to 2014 year-end data.

  5. Our Export Roadmap • Implement an integrated plan for access & promotion • Define aggressive market access actions • Identify new market development opportunities • Clarify strategies and tactics, and develop loyalty in existing markets • Provide the products desired by customers

  6. Year-to-Date 2014 Exports • $4.003 B, ↑16%, 2.909 B lbs, ↑7% • The first year that value has exceeded $4B before August • In July: • Volume ↓3% (first month in 2014) • Value ↑14% • Value at $64.45/head, 28% of production • Record pace despite prices and intense global competition • High prices for domestic pork in many countries • Market closures, changing trade flows…

  7. Russia Situation • Feb 2013: Russia suspended imports of US beef and pork, due to beta-agonist policy • Feb 2014: Began allowing US pork produced under USDA AMS Never-Fed Beta Agonists program, approved 2 plants • June 2014: Exports reached 9,371 MT (98,830 MT in 2012) • Putin decree of a “ban or restriction” on ag imports from countries that have imposed sanctions, including US, EU, Canada, Norway, Australia What this means: • Russian reductions in supplies Beef: -8% Pork and Poultry: -12% • Displaces 16% of Canada’s exports or 68% of their production • Brazil/South America and China(!) will likely be able to supply portion of banned poultry losses…pork? • China and Russia bans WILL shift global pork flows 

  8. Top US Export Markets: Jan-July 2014 Value (Million $) Volume (Million Pounds) Mexico 855.7 M, ↑12% Japan 644.3, ↑16% China/HK 473.8, ↓10% Canada 262.4, ↓10% Korea 183.3, ↑31% C/S Am 149.9, ↑8% ASEAN 94.5, ↑13% Oceania90.5, ↑8% Japan $1.208 B, ↑9% Mexico $887.1 M, ↑38% China/HK $474.4, ↓ 7% Canada $509.4, ↑ 5% Korea $257.5, ↑49% C/S Am $187.6,↑20% Oceania $141.9, ↑18% ASEAN $113.4, ↑24% Source: USDA statistics compiled by USMEF, compared to 2013

  9. Mexico: Jan-July 2014 Value (Million $) Volume (Million Pounds) Mexico 855.7 M, ↑12% Japan 644.3, ↑16% China/HK 473.8, ↓10% Canada 262.4, ↓10% Korea 183.3, ↑31% C/S Am 149.9, ↑8% ASEAN 94.5, ↑13% Oceania90.5, ↑8% Japan $1.208 B, ↑9% Mexico $887.1 M, ↑38% China/HK $474.4, ↓ 7% Canada $509.4, ↑ 5% Korea $257.5, ↑49% C/S Am $187.6,↑20% Oceania $141.9, ↑18% ASEAN $113.4, ↑24% • Textbook story… • Exporting to Asia • Propelled ham value but now looking for them to consume Canada and US hams Source: USDA statistics compiled by USMEF, compared to 2013

  10. Japan: Jan-July 2014 Value (Million $) Volume (Million Pounds) Mexico 855.7 M, ↑12% Japan 644.3, ↑16% China/HK 473.8, ↓10% Canada 262.4, ↓10% Korea 183.3, ↑31% C/S Am 149.9, ↑8% ASEAN 94.5, ↑13% Oceania90.5, ↑8% Japan $1.208 B, ↑9% Mexico $887.1 M, ↑38% China/HK $474.4, ↓ 7% Canada $509.4, ↑ 5% Korea $257.5, ↑49% C/S Am $187.6,↑20% Oceania $141.9, ↑18% ASEAN $113.4, ↑24% • 5% production decrease • Stagnant demand • FTA’s with Aust, Mex, Chile Source: USDA statistics compiled by USMEF, compared to 2013

  11. China: Jan-July 2014 Value (Million $) Volume (Million Pounds) Mexico 855.7 M, ↑12% Japan 644.3, ↑16% China/HK 473.8, ↓10% Canada 262.4, ↓10% Korea 183.3, ↑31% C/S Am 149.9, ↑8% ASEAN 94.5, ↑13% Oceania90.5, ↑8% Japan $1.208 B, ↑9% Mexico $887.1 M, ↑38% China/HK $474.4, ↓ 7% Canada $509.4, ↑ 5% Korea $257.5, ↑49% C/S Am $187.6,↑20% Oceania $141.9, ↑18% ASEAN $113.4, ↑24% • Racto testing gives EU advantage • Recent delistings • Reduced variety meat exports • Surge in muscle meat exports • Took first chilled imports in March Source: USDA statistics compiled by USMEF, compared to 2013

  12. Canada: Jan-July 2014 Value (Million $) Volume (Million Pounds) Mexico 855.7 M, ↑12% Japan 644.3, ↑16% China/HK 473.8, ↓10% Canada 262.4, ↓10% Korea 183.3, ↑31% C/S Am 149.9, ↑8% ASEAN 94.5, ↑13% Oceania90.5, ↑8% Japan $1.208 B, ↑9% Mexico $887.1 M, ↑38% China/HK $474.4, ↓ 7% Canada $509.4, ↑ 5% Korea $257.5, ↑49% C/S Am $187.6,↑20% Oceania $141.9, ↑18% ASEAN $113.4, ↑24% • PEDv challenges • US has 30% share of domestic consumption • Russia closure = 16% of exports and 68% of production • Global shift of markets Source: USDA statistics compiled by USMEF, compared to 2013

  13. South Korea: Jan-July 2014 Value (Million $) Volume (Million Pounds) Mexico 855.7 M, ↑12% Japan 644.3, ↑16% China/HK 473.8, ↓10% Canada 262.4, ↓10% Korea 183.3, ↑31% C/S Am 149.9, ↑8% ASEAN 94.5, ↑13% Oceania90.5, ↑8% Japan $1.208 B, ↑9% Mexico $887.1 M, ↑38% China/HK $474.4, ↓ 7% Canada $509.4, ↑ 5% Korea $257.5, ↑49% C/S Am $187.6,↑20% Oceania $141.9, ↑18% ASEAN $113.4, ↑24% • Imports recovering, US has dominant share • PEDv challenges, now FMD • Highest production costs • Greater access in 2016 Source: USDA statistics compiled by USMEF, compared to 2013

  14. C/S America: Jan-July 2014 Value (Million $) Volume (Million Pounds) Mexico 855.7 M, ↑12% Japan 644.3, ↑16% China/HK 473.8, ↓10% Canada 262.4, ↓10% Korea 183.3, ↑31% C/S Am 149.9, ↑8% ASEAN 94.5, ↑13% Oceania90.5, ↑8% • Increasing GDP’s, populations • Colombia eliminated trichinae restrictions, up 72%, no #7 • Increasing chilled exports to Colombia, Peru, CAFTA/DR Japan $1.208 B, ↑9% Mexico $887.1 M, ↑38% China/HK $474.4, ↓ 7% Canada $509.4, ↑ 5% Korea $257.5, ↑49% C/S Am $187.6,↑20% Oceania $141.9, ↑18% ASEAN $113.4, ↑24% Source: USDA statistics compiled by USMEF, compared to 2013

  15. ASEAN: Jan-July 2014 Value (Million $) Volume (Million Pounds) Mexico 855.7 M, ↑12% Japan 644.3, ↑16% China/HK 473.8, ↓10% Canada 262.4, ↓10% Korea 183.3, ↑31% C/S Am 149.9, ↑8% ASEAN 94.5, ↑13% Oceania90.5, ↑8% Japan $1.208 B, ↑9% Mexico $887.1 M, ↑38% China/HK $474.4, ↓ 7% Canada $509.4, ↑ 5% Korea $257.5, ↑49% C/S Am $187.6,↑20% Oceania $141.9, ↑18% ASEAN $113.4, ↑24% • Philippines and Singapore #9 and 10 • Singapore ↑182!...gray trade with China • Philippines down, outlet for EU product • White offal access to Vietnam Source: USDA statistics compiled by USMEF, compared to 2013

  16. Oceania: Jan-July 2014 Value (Million $) Volume (Million Pounds) Mexico 855.7 M, ↑12% Japan 644.3, ↑16% China/HK 473.8, ↓10% Canada 262.4, ↓10% Korea 183.3, ↑31% C/S Am 149.9, ↑8% ASEAN 94.5, ↑13% Oceania90.5, ↑8% Japan $1.208 B, ↑9% Mexico $887.1 M, ↑38% China/HK $474.4, ↓ 7% Canada $509.4, ↑ 5% Korea $257.5, ↑49% C/S Am $187.6,↑20% Oceania $141.9, ↑18% ASEAN $113.4, ↑24% • New access for chilled pork in NZ, less than 3 kg • PR issues in both countries Source: USDA statistics compiled by USMEF, compared to 2013

  17. Opportunities • Trans-Pacific Partnership of 12 Nations • Sticking point: Japan access/elimination of gate price • Other nation support for US position • Next round: October • Transatlantic Trade Investment Partnership with EU • EU willing to eliminate tariffs on nearly all goods • Unwilling to eliminate them on beef, poultry and pork • Huge SPS and social issues • Precautionary Principle • Both have HUGE potential • NPB research on barriers, cost of restrictions

  18. Forecast • Forecast up 1.5-2% in 2014? • Prices dropping • Rising demand from Japan, Korea, Mexico • EU gaining share in competitive markets • WATCH: Global product flow shifts

  19. International Marketing Research

  20. Marketing Structure Study Identify data gaps Conduct interviews Prioritize markets Develop scorecards Clear definition of optimal structure Clear identification of constraints Recommendations for structure Pathways • Is our current structure working? • Are we targeting the right markets? • Are our tactics the right ones? • What are the best opportunities? • How do we get there? • How do we achieve our goal?

  21. “By-Product” Research

  22. Exported Muscle Cuts

  23. Exported By-Products & Variety Meats

  24. Variety Meat Research Projects

  25. International Resources

  26. US Pork Videos www.pork.org/ExporterInsights • Nutrition • Processing and Fabrication • Animal Care • Sustainability and Environment

  27. By-Product Recipe Book

  28. By-Product Recipe Book

  29. By-Product Recipe Book

  30. Thank You!

  31. MCOOL • WTO ruled against US…waiting on next outcome • Fix after November elections? • If lose the appeal, Canada and Mexico can estimate/calculate "damages" and impose punitive duties • Likely in 2015

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