How Meat Exports Enhance Your Bottom Line. Greg Hanes, Vice President, International Marketing & Programs USMEF

Transcription

1 How Meat Exports Enhance Your Bottom Line Greg Hanes, Vice President, International Marketing & Programs USMEF

2 USMEF Mission Statement Non-profit Established in 1976 USMEF Mission 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.

3 USMEF Global Reach

4 USMEF In-Market Strategy Total Quality Marketing Defend Importer/Distributor HRI Displace Develop White Table Cloth Hotel Family Style Fast Food Institutional Ethnic Local Retail Department Stores National Retailer CVS Regional Retailer Local Stores Boutiques Consumer Gender Age Group Socio-Economic Geo-Location

5 Composition of U.S. Beef Exports Rounds, clods, skirts & variety meats to Mexico Full-sets to the EU Variety meats & middle meats to the Middle East Short plates, short ribs, chuck rolls, skirts, middle meats & variety meats to Japan, Korea, Hong Kong, Taiwan & S.E. Asia Chuck rolls, rounds, skirts & variety meats to C/S America

6 Leveraging Checkoff Funding Dollars: The USMEF Investment + + = Checkoff Investments $30,000 U.S. Meat Export Federation Contribution $80,000 Japanese Retail Partners Contributions $200,000 TOTAL BEEF Program Impact $310,000 In 2017 each $1.00 of Checkoff invested internationally was leveraged with an additional $9.30 A $1 Checkoff Dollar Invested Returned $21.00 in U.S. Beef Sales

7 96% of World s Population Outside U.S. (and 80+% of the buying power) 12, Billion 10,000 8,000 Millions 6,000 4,000 2, World United States Source: United Nations, Department of Economic & Social Affairs, Population Division (2013)

8 Source: OECD/FAO Agricultural Outlook , includes beef & veal, pork, and sheepmeat Growing Red Meat Consumption Outside the U.S. Projected ROW growth from 2016 to 2025: 49 billion pounds, +12% Thousand MT 220, , , , , , ,000 80,000 60,000 40,000 20,000 0 U.S. Rest of World

9 Share of the Global Middle Class 70% 60% 50% 40% 30% 20% 10% 0% North America Europe Central and South America Asia Pacific Sub-Saharan Africa Middle East and North Africa Source: OECD Development Centre

10 600 Lbs. 500 South Korea: Effect of Income 484 lbs. Growth on Diet lbs. 338 lbs lbs lbs. 99 lbs. 11 lbs. 32 lbs Total Meat Total Rice/Grain Source: MAFRA, total meat includes beef, pork, and chicken

11 U.S. Beef and Variety Meat Exports to Top Markets January December Exports $2,000 $1,800 $1, % 2016: $6.343 billion, +1% 2017: $7.269 billion, +15% 2018 Jan- May: $3.316 billion, +21% Million, USD $1,400 $1,200 $1,000 $ % 0% +34% +5% $600 $ % 2017 $200 $0 Source: USDA/FAS & USMEF

12 Value of Exports per Fed Head Slaughtered Export Value Per Fed Head $ : $286.38, +9% $300 $250 $200 $150 $100 $50 $0 Source: USDA/FAS, fed slaughter

13 Examples of How Exports Add to Carcass Value Tongues to Japan: $12.62 Short plate to Japan: $27.36 Short ribs/chuck short ribs to Korea: $19 per fed head Source: Global Trade Atlas import data, USDA/NASS, USMEF estimates, data is for Jan Sept 2017

14 Beef Export Value per Head by Market Jan - May 2018 value per head of fed cattle slaughtered = $317.69, +18% $44.04 Japan $20.11 $29.33 $78.84 Korea China/HK Mexico Canada $62.01 Taiwan $41.00 Others $42.36 Source: USDA/USMEF, fed slaughter

15 U.S. Pork & Variety Meat Exports to Top Markets Million, USD $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 +4% +12% 0% January-December Export Value -1% +30% 2016: $5.941 billion, +7% 2017: $6.486 billion, +9% 2018 YTD Jan-May: billion, +6% +58% PVM exports hit a record $1.172 billion in % from YTD PVM +3% Source: USDA/FAS & USMEF

16 Value of Exports per Hog Slaughtered $70 $60 $50 $40 $30 $20 $10 $0 Export Value Per Head 2017: $53.47, +7% Source: USDA/USMEF, Commercial Hog Slaughter

17 Pork Export Value Per Head by Market Jan May 2018 value per market hog slaughtered = $55.57, +2% $9.03 Japan $13.45 Mexico China/HK $5.83 $6.64 $12.11 Korea Canada Others $8.51 Source: USDA/USMEF, commercial slaughter

18 Marketing in Bogota Colombia U.S. Pork Brisket Bones & Fries $1.30

19 Source: World Perspectives, Inc. Meat Exports Contribute to Grains The added value of beef exports to corn from will be approximately $16.1 billion, and value to DDGS will be approximately $2.614 billion. Red meat exports in 2017 accounted for 427 million bushes of corn, 1.84 million tons of DDGS, and 1.88 million tons of soybean meal. The added value of pork exports to soybean meal from will be approximately $6.301 billion.

20 Measuring Feed Demand in Meat Feed Utilization Per Calf (800 1,360 lbs.) 35 bushels of corn 806 lbs. of DDGS Feed Utilization Per Pig ( lbs.) 11 bushels of corn 37 lbs. of DDGS 136 lbs. of soybean meal 12 oz. Beef Sirloin Steak 2.56 lbs. of corn 1.71 lbs. of DDGS 8 oz. Center-Cut Pork Chop 2.1 lbs. of corn 0.12 lbs. of DDGS 0.46 lbs. of soybean meal

21 Long Term Impact for Grains Indirect Exports of Corn and DDGS through Beef and Pork 600 Millions of Bushels Million Bu DDGS 427 Million Bu Corn +13% +16% 76.4 Million Bu DDGS Million Bu Corn DDGS converted to bushel equivalent

22 Projected Value to Corn by State $3,500 $3,000 $2,966 From , the projected total value of red meat exports to corn is $16.1 billion USD$ millions $2,500 $2,000 $1,500 $1,000 $2,382 $2,004 $1,691 $973 $947 $687 $590 $582 $518 $500 $- IA IL NE MN IN SD KS OH WI MO

23 Projected Value to DDGS by State $800 $700 $600 $715 From , the projected total value of red meat exports to DDGS is $2.614 billion USD$ millions $500 $400 $300 $200 $100 $357 $257 $202 $188 $184 $95 $93 $90 $69 $0 IA NE IL MN IN SD OH WI KS ND

24 Projected Value to Soybean Meal by State USD$ millions $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 $888 $873 $605 From , the projected total value of red meat exports to SBM is $6.301 billion $490 $441 $380 $378 $298 $291 $249 IA IL MN NE IN OH SD ND MI AR

25 USMEF Program ROI Cornell University Dr. Kaiser ROI Study 2018

26 Economy-Wide Impacts of USMEF Export Promotion Cornell University Dr. Kaiser ROI Study 2018

27 Export Challenges in 2018 Forecasted record large U.S. meat production +6% Beef +5% Pork +2% Poultry Uncertainty in international trade NAFTA TPP/CPTPP China trade war and additional B/P duties

28 Image from money.cnn.com NAFTA You can t get better than Zero What it means for U.S. Exports of rounds, shoulder clods, hams, variety meats Dominant U.S. market share of imports North American integration: we are each top exporters and importers of beef & pork

29 Growth following NAFTA Billion USD $2.5 U.S. Beef and Pork Export Value to Mexico and Canada Since 1996 U.S. beef exports to Mexico: $32.6 billion Canada: $23.3 billion $2.0 $1.5 $1.0 $0.5 $0.0 Total Beef Total Pork Source: USDA/FAS

30 U.S. Beef Without TPP Japan U.S. vs. Australia chilled 38.5% vs 29.9% frozen 50% vs 27.2% tongues & skirts 12.8% vs 7.6% Vietnam Australia/NZ = 5% U.S.= 10% to 20% And Mexico continues to benefit from its EPA with Japan!

31 USMEF Aligns with Strategic Partners USMEF Japan Gochipo Day ,200 retail outlets participated US pork sales increased 160% from previous year As a whole, US pork sales in Aeon have increased 138% since Loins are the top selling item. Aeon sells only U.S. chilled pork

32 USMEF in Costco Korea 2017 US beef displaced Aussie beef in meat department 2018 US beef displaced Aussie beef in top selling SKU, chilled beef bulgogi in deli department Leading warehouse club in Korea 14 Korean outlets Sells largest volume of imported beef Prior to 2017, purchasing Aussie beef

33 Food Trucks & Convenience Stores in Korea Chef Lee food truck cubed steak lunch box brought to CVS in 2018 Launched in 12,500 GS25 stores nationwide Consuming 12mt US beef every month (approx. 26,500 lbs) Choice grade chuck flap tail/rib finger

34 USMEF Supports Importers/Traders in China Largest food processor, manufacturer, trader in China USMEF supports COFCO by targeting downstream customers USMEF hands-on training targets COFCO s downstream customers

35 West Africa New Opportunities Senegal Benin Nigeria Ghana Gabon Congo Angola Indian Ocean Atlantic Ocean South Africa

36 Follow USMEF on Social Media On On On

37