Cattle & Beef Market Situation & Outlook

1. Cattle & Beef Market Situation & Outlook Prepared for: Meat Export Federation 2006 Fall Meeting

2. Production Levels January – October 2006 7% 2% 10% 6% Steer Beef Heifer Beef Cow Beef Total Beef

3. Prices Jan-Oct 2006 $$ $$ Change 2005 2006 +.72 -.90 -0.65 +.73 -6.05 $140.47 $85.76 $109.23 $128.50 $50.23 Avg. Beef Cut-Out Fed Steer Price 750 lb Feeder Steer Price 550 lb Steer Calf Price Utility Sltr Cow Price $139.75 $86.66 $109.88 $127.77 $56.28

4. Herd expansion has slowed not stopped!

8. Demand

10. PRE-BSE Export Markets Accounted For 12-15% of Total Beef & Variety Meat Demand

15. The U.S. Has Regained $95.00 of the $175.00 Per Head Value of Beef and Beef Variety Meat Exports

17. Global Perceptions of Beef Quality The Global “Gold Standard” For Beef Quality Top Five Terms for Simply Describing Exemplary Quality In U.S. Beef U.S. Prime • U.S. Prime • U.S. Choice • Certified Angus Beef • U.S. Beef (in general) • Corn-fed In the Global Community: • The perception of U.S. beef flavor: “Excellent” = 70%; “Very Good” = 30% • The perception of U.S. beef tenderness: “Very Good” = 100% Source: National Beef Quality Audit -- 2005.

18. 2007 Cattle, Beef & Grain Market Outlook :

26. Major Trends & Opportunities • Globalization – Increased Competition • U.S. Must Have Access to World Markets • Retail and Food Service Consolidation • Animal ID: Time is NOW • Increased Product Branding and Differentiation

27. Thank You! Have a Great Year!