USA Poultry & Egg Export Council

1. USA Poultry & Egg Export Council What’s the Big Deal About Poultry? April 28, 2005 Warsaw, Poland

2. What is USAPEEC? • Non-Profit Trade Association • Founded in 1984 • About 200 member companies that account for more than 95% of all poultry & eggs exported from U.S.

3. USAPEEC’s Mission • To increase U.S. poultry & egg exports by opening, maintaining and developing markets around the world. • To serve as the industry’s voice on trade policy issues.

4. USAPEEC Atlanta Staff Barbara Moore Ernesto Baron Brent Danielson Dr. Mark Lobstein Jim Sumner Nanci Johns Kay Phiel Jean Murphy Jennifer Geck Greg Tyler Shep Tuller Toby Moore

5. Resources of USAPEEC’s foreign offices • On location market & economic intelligence • Relation building with potential importers • Educational & promotional activities • Trade Shows, buying missions, and other activities

6. USAPEEC Members Processors 52Trading Companies 79Commodity Groups 11Associate Members 69Total 211

7. USAPEEC’s Funding: Total budget $7.5 million

8. Non-Government Funding Increase of 45.3%

9. Don’t the big producers like Tyson control USAPEEC?

10. All For One and One for All • Board of Directors is structured on a one-company, one-vote basis, regardless of dues. • Board has up to 25 members from processors, trading companies, and associate members. • Elected to 3-year terms • Commodities get a seat on the board for 1-year terms • Board members are nominated by a nominating committee, which is made up of members from the Executive Committee. • Executive Committee has 8 members.

11. Today’s Hot Topics • Summary of the U.S. poultry industry • Volume of grains used by the U.S. poultry industry • Effects of poultry trade on grain farmers • Summary of the Russian market • Value of your support • Questions?

12. Total poultry meat production = estimated 41.2 billion pounds in 2005. (18.7 million metric tons) • 85% broiler meat • 14% turkey meat • 1% other chicken

13. Why doesn’t the poultry industry have a check-off?

14. Poultry: Please don’t let me be Misunderstood • Research, promotion, and education are very important to our industry. • Industry-supported organizations: • US Poultry & Egg Association • Spends millions each year on research projects at universities • Organizes the International Poultry Expo every January • National Chicken Council & National Turkey Federation • Promote consumption • Engage in lobbying

15. Poultry: Please don’t let me be Misunderstood • Vertically integrated • Single company involved in every stage of production, processing, and marketing. • Allows industry to take advantage of new technologies to be more efficient, responsive, and profitable.

16. Broiler Production • Grower supplies: • Growout house • Labor • Processor supplies: • Chicks • Feed • Medicines

17. Poultry: Please don’t let me be Misunderstood • Poultry companies prefer to do their own advertising. • They spend millions advertising their brands every year. • They know that competition in export markets is between themselves NOT poultry and beef. • USAPEEC doesn’t engage in branding promotions.

18. Isn’t poultry really just a “Southern” thing?

19. 0-.5 mil .5-2 mil 2 mil+ Chicken Production, 2003(In Million lbs) Source: NASS

20. 0-50 50-300 300+ Turkey Production, 2003(In Million lbs) Source: NASS

21. 0-$75 $75-200 $200+ Egg Production, 2003 (Value in Million US$) Source: NASS

22. Believe It or Not… Last year the U.S. broiler and turkey industries spent $7.9 Billion on corn and soybean meal. Source: National Chicken Council

23. 0-50 50-100 100+ Soybean Production, 2000(In million bushels produced) Source: USB Soy Stats

24. 0-100 100-200 200+ Corn Production, 2003(In million bushels produced) Source: NCGA

25. Since the Midwest produces a wealth of corn and soybeans, these states are vital to the poultry industry’s success.

26. Does poultry really consume that much corn and soybeans?

27. U.S. Corn Use by Livestock 5.2 Billion Corn Bushels Consumed Annually by Livestock Source: NCGA

28. Annual production of U.S. poultry consumes more than 1.3 billion bushels of corn. Source: National Chicken Council

29. Poultry consume about 15% of the U.S. corn and soybean crops

30. How Important is Your #1 Customer? U.S. Soybean Meal Use by Livestock Source: Soy Stats, USB

31. 1 out of every 6 bushels of soybeans is consumed by the U.S. poultry industry. Source: Soy Stats, USB

32. U.S. Corn Usage Source: NCGA

33. Doesn’t it seem like poultry is so efficient in feed conversion that it barely uses any corn?

34. Did You Consider… • Grow-out is only 4-6 weeks. • Chicken consumption is higher than all other meats. • A more efficient poultry industry helps you too. • Poultry becomes cheaper for consumers, consumption rises, and production goes up

35. Feed Conversions: 1925-2005 (Pounds of feed to 1 lb of broiler, liveweight) Source: National Chicken Council

36. Chicken is the Future

37. Total U.S. Broiler Production Billion Pounds p=projection

38. U.S. Broiler Exports In Corn & Soybean Million Bushel Equivalents Source: USDA/FAS, NCC

39. U.S. Broiler Export Markets2004 • Primary Markets Russia ($492 million, 28% of U.S. Exports) Canada ($257 million, 15% of U.S. Exports) Mexico ($122 million, 7% of U.S. Exports) Ukraine ($85 million, 5% of U.S. Exports) Hong Kong ($73 million, 4% of U.S. Exports) Turkey ($64 million, 4% of U.S. Exports) Cuba ($57 million, 3% of U.S. Exports)

40. U.S. Turkey Exports In Corn & Soybean Million Bushel Equivalents Source: USDA/FAS, NTF

41. It Takes 3.5 lbs. of Feed to Produce 1 Dozen Shell Eggs Source: United Egg Producers

42. Don’ t the poultry and beef industries compete against each other?

43. Poultry & Beef: Friends or Foes? • Poultry is not in direct competition with other meats. • Poultry actually competes more with other poultry products in the export markets. • Product taken off the domestic market benefits all US producers of meat (white and red). • Without int’l markets, more product stays on the US market. • Causes prices to be lower for all meats.

44. Tumbling, Tumbling Down… • Russian Poultry Ban caused prices for all meats to go down. • BSE crisis caused wholesale chicken prices to depress by $.01 per lb. • Caused our industry to lose $300-400 million in revenue Source: National Chicken Council

45. Strength in Numbers • Food safety campaigns for meats compliment each other • Helps counteract misinformation in foreign markets like Japan • St. Louis Project • Grains, oilseeds, poultry and beef are working together • Deli seminars in the Caribbean and Central America • Joint promotion for beef, pork, poultry, and dairy industries

46. Is poultry trade really that important?

47. Did You Consider… • In 2004 about 140 million corn bushels and 40 million soybean bushels were exported through poultry • Poultry exports to Russia • 38 million corn bushels • 11 million soybean bushels • Poultry exports to Mexico • 17 million corn bushels • 5 million soybean bushels

48. Beer & Wings or Beer & Paws? • Without int’l markets, more product stays in the US. • That’s a lot of dark meat. • If China won’t take our chicken feet or paws… • Lose of millions from a closed market • Will be forced to create a demand in the US

49. It’s What’s For Dinner…

50. 2005 Projected World Broiler ProductionDominated by Five Players Million Metric Tons Rest of the World