International Markets: Technical Services Demand for Your Issues - PDF document

Greg Hanes, USMEF 11/28/17 The Roles of USMEF • Marketing Support International Markets: • Technical Services Demand for Your • Issues Management • Trade Servicing Beef • In-Market Facilitation • Buyer Teams Greg Hanes USMEF Asst. VP, Interna6onal Marke6ng USMEF’s Office Network Increasing Global Beef Supplies Others 60 Canada Russia 50 Turkey 40 Pakistan Million mt Mexico 30 Australia ArgenSna 20 India China 10 EU Brazil 0 6 7 8 9 0 1 2 3 4 5 6 F United States 0 0 0 0 1 1 1 1 1 1 1 7 0 0 0 0 0 0 0 0 0 0 0 1 2 2 2 2 2 2 2 2 2 2 2 0 2 Source: USDA/FAS Apr 2017 & USMEF esSmates Global Exporters & Importers U.S. Leading Global Export Growth Beef & Variety Meat Exports Beef & Variety Meat Imports Beef & Variety Meat Exports: Jan-Aug 1,200,000 1,600,000 2,000,000 +9% 1,800,000 1,000,000 1,400,000 2015 2016 -19% 1,600,000 1,200,000 +11% 800,000 Metric tons 1,400,000 1,000,000 Metric tons 600,000 1,200,000 -9% 800,000 1,000,000 400,000 800,000 600,000 +3% 200,000 600,000 -16% -3% 400,000 +22% 400,000 0 200,000 l a . a d 8 a y a y o 200,000 z i S d i l i n 2 d a n a c a . a a U a u i u i r n U t x B r l E n g n g e I s t a e e a u a M u C r g r 0 0 Z U a A r A P w Brazil India Australia U.S. NZ EU28 Canada G. China U.S. Japan Russia Egypt S. Korea EU28 Chile Mexico Canada e N 2015 2016 2017 Source: Global Trade Atlas & USMEF esSmates Source : Global Trade Atlas 2017 Range Beef Cow Symposium, Cheyenne, Wyo. 1

Greg Hanes, USMEF 11/28/17 U.S. Beef and Variety Meat Exports U.S. Beef Exports - Value to Top Markets U.S. Beef & Variety Meat Exports to Top Markets January –September Exports January –September Exports Metric Tons U.S. $ Billion 250,000 Jan – Sep 2015: $4.766 billion , -8% 2015: 782,369 MT, -12% $1.6 Jan – Sep 2016: $4.545 billion , -5% 2016: 848,930 MT, +8.5% $1.4 Jan – Sep 2017: $5.267 billion , 200,000 2017: 926 ,985 MT, +9% +16% $1.2 150,000 $1.0 2015 2015 $0.8 2016 2016 100,000 $0.6 2017 2017 $0.4 50,000 $0.2 0 $0.0 Japan Mexico Korea Canada China/HK Middle East Taiwan ASEAN South Am Africa Carib + DR EU Central Am Japan Korea Mexico Canada China/HK Taiwan EU ASEAN Middle East Carib + DR South Am Central Am Source: USDA/FAS & USMEF Source: USDA/FAS & USMEF Beef Exports to Exceed $7 BILLION U.S. Beef Exports & Forecast Again This Year Jan – Sep 2017: U.S. Beef & Variety Meat Exports U.S. Beef & Variety Export Value: Top Markets 2017 F 926,985 MT, +9% $2,000 $1,826 1,400,000 Others $1,800 +7.5% FTA partner countries ASEAN $1,600 +11% account for roughly 45% 1,200,000 $1,400 of U.S. beef export value. C/S America $1,236 Million USD Japan accounts for more $1,200 1,000,000 Taiwan $983 Metric tons than 25%. $1,000 $839 Middle East 800,000 $774 $800 China/HK $600 600,000 $411 Canada $400 $260 $216 $198 $183 400,000 $159 S. Korea $200 $94 $- Mexico 200,000 Japan Korea Mexico Canada China/HK Taiwan EU ASEAN Mid East Central & South Am Carib & DR Other Japan - 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017f 2021f 5 year annual average forecast growth rate: 4.2% Source: USDA/FAS and USMEF estimates Source: USMEF estimates Advantage U.S.A.: World’s Largest U.S. Dominating Market Share of Exporter of Chilled Beef Chilled Beef Imports Chilled Beef Exports: Jan-Aug U.S. Share of Chilled Beef Imports: Jan-Aug 350,000 71% +34% 70% 300,000 60% 53% 250,000 52% 50% Metric tons -4% 200,000 +5% 40% 150,000 26% +5% 30% -13% +5% 100,000 +4% 20% 50,000 10% - 0% U.S. Australia Canada Mexico Brazil Paraguay EU28 Japan Korea Taiwan Hong Kong 2015 2016 2017 2003 2015 2016 2017 Source: Global Trade Atlas Source: Global Trade Atlas, USMEF 2017 Range Beef Cow Symposium, Cheyenne, Wyo. 2

Greg Hanes, USMEF 11/28/17 Composition of U.S. Beef Value of Exports per Fed Head Slaughtered Exports Full-sets to Rounds, clods, 2016: $262.17, -6% Variety meats & the EU Jan – Sep 2017: $277.31 , skirts & variety middle meats to $350 +10% meats to Mexico the Middle East $300 $250 Short plates, short ribs, chuck rolls, $200 skirts, middle meats $150 & variety meats to Japan, Korea, Hong $100 Kong, Taiwan & S.E. $50 Asia $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Jan-Sep 2017 2016 Chuck rolls, rounds, skirts & variety meats to C/S America Source: USDA/FAS, fed slaughter Japan is contributing over a Examples of How Exports Add to Carcass Value quarter of export value per head Jan – Sep 2017 value per fed head of cattle slaughtered = $277.31 • Tongues to Japan: $12.62 • Short plate to Japan: $27.36 Japan • Short ribs/chuck short ribs to Korea: $19 per $40.59 Korea fed head $76.21 $15.66 Mexico Canada $29.68 Hong Kong $45.11 $31.79 Taiwan Others $38.27 Source: Global Trade Atlas import data, USDA/NASS, USMEF estimates, data is for Jan – Sept 2017 Source: USDA/FAS and USMEF, fed slaughter “Niku Boom” – Japan’s Demand Japan Top Growth Market for Meat is Booming Top growth markets for U.S. beef Japan’s Meat Imports: Jan-Sep Increase over 2016 volume, Jan-Sep 900,000 +7% 50,000 +5% +22% 800,000 Metric ton increase in exports 45,000 700,000 40,000 600,000 +16% 35,000 Metric Tons 30,000 500,000 25,000 400,000 20,000 300,000 +68% +13% +7% +94% 15,000 200,000 10,000 100,000 +22% +9% +3% +1% 5,000 0 0 pork poultry beef Japan ASEAN China/HK Korea Africa S. Taiwan Canada Mexico 2015 2016 2017 America Source: Global Trade Atlas Source: USDA/FAS 2017 Range Beef Cow Symposium, Cheyenne, Wyo. 3

Greg Hanes, USMEF 11/28/17 Beef Constraints in U.S. & Australia Share of Japan Japan’s Total Beef Imports Beef Safeguard 100% Japan - Australia EPA 85% 90% • Duty rates from 38.5% to 81% • U.S. 38.5% vs. Australia 76% 80% 50% on frozen beef for 73% 68% • Chilled 29.9% the remainder of the year 70% 63% 60% 56% • Frozen 27.2% through March 31, 2018 60% 52% 52% 51% 46% • Tongues & skirts 7.6% 44% 50% 40% (12.8% U.S.) 38% • Increased duty will also 36% 35% 40% effect Canada and New 26% 30% 24% Zealand 19% 15% 20% 12% 8% 10% • Australia, MX not 2% impacted 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Jul-17 U.S. Australia • Australian duty to remain 27.2% 2017 Data based off Jan-July Source: Global Trade Atlas Korea Beef FTA Tariff Korea: Growth in Beef Consumption Comparison 16.00 60% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 14.00 50% U.S. 26.7% 24.0% 21.3% 18.7% 16% 13.3% 10.7% 8% 5.3% 2.7% 0% 0% 0% 12.00 Kg per capita, carcass wt. 40% Aus. 32% 29.3% 26.6% 23.9% 21.3% 18.6% 15.9% 13.3% 10.6% 7.9% 5.3% 2.6% 0% 10.00 Mex. 40% 40% 40% 40% 40% 40% 40% 40% 40% 40% 40% 40% 40% 8.00 30% Can. 34.6% 32% 29.3% 26.6% 24% 21.3% 18.6% 16% 13.3% 10.6% 8% 5.3% 2.6% 6.00 New 34.6% 32% 29.3% 26.6% 23.9% 21.3% 18.6% 15.9% 13.3% 10.6% 7.9% 5.3% 2.6% 20% Zealand 4.00 10% 2.00 - 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Per capita cons Self-sufficiency Source: USDA/FAS Korea Importing Record Volumes Importance of NAFTA of Chilled Beef • U.S. beef exports to Mexico and Canada accounted for 30% Korea’s chilled beef imports: Jan-Sep of U.S. beef export volume at 360,000 mt and 27% of 35,000 +86% export value at $1.7 billion in 2016 -1% 30,000 • Mexico 2 nd largest export destination • Canada 4th largest 25,000 • U.S. beef value per fed head of cattle slaughtered from Metric tons 20,000 exports to Canada more than doubled from $13.90 in 1994 to $31.34 in 2016 15,000 • Value per fed head from exports to Mexico nearly 10,000 quadrupled from $10.39 in 1994 to $40.30 in 2016 5,000 • Exports to Mexico account for about 3% of U.S. beef production - United States Australia • Beef export value to Mexico has averaged $8.50 per 2015 2016 2017 capita over the past 3 years; and just under 2 kg / person Source: Global Trade Atlas; U.S. market share increased from 31% to 41% in 2016 2017 Range Beef Cow Symposium, Cheyenne, Wyo. 4