2019 Annual General Meeting & Conference JW Marriott, Austin, TX supporting and promoting imported meat November 4 - 6, 2019 Presented by: Len Steiner Steiner Consulting Group, 800.526.4612
Main Discussion Points Today ❖ #1: Economic Situation in US and World ❖ #2: Currency Markets ❖ #3: Feed Input Costs ❖ #4: Cattle Supplies in USA, Canada and Mexico ❖ #5: Demand /Supplies in Other Markets ❖ #6: Special Discussion on African Swine Fever and Impact on Protein Markets ❖ #7: Demand in US Domestic Market ❖ #8: Alternative Protein Supplies ❖ #9: US Lamb Business ❖ #10: Price Forecasts 2020 Meat Market Outlook - 1 - Presented by: Steiner Consulting Group | (800) 526-4612
Global Situation – Last Year Canada : Q2 growth accelerated to 2.9% from 1.3% in Q1. Negotiations with USA continue over a EU revised NAFTA. That Brexit negotiations remains a key risk are approaching Russia : some key deadlines Japan : The Russian economy has and no deal appears Q2 growth was recovered from the impact of imminent. higher than expected sanctions and expanded 1.3% and surprised the in Q1 compared to 0.9% in late USA : US GDP revised market. Robust 2017. higher in Q2 and low private investment unemployment should supported growth continue to bolster wages/spending. China : Exports remain resilient Mexico : GDP despite trade war with improved to 2.6% in USA but risks are heavily Q2 compared to 1.3% weighted to the in Q1. Unemployment downside. Equity rate increased to 3.5% markets are down 20% India : but remains below year YTD Economy has recovered ago levels as impact from demonetization has Argentina : GDP growth Brazil : Growth New Zealand : Q2 faded. declined a stunning 4.2% in estimates have been growth numbers Australia : Q2 compared to +3.6% in revised lower following have yet to be GDP growth in Q2 was Q1. The economic activity the trucker strike and released by +0.9% compared to +1% in index continues to head election uncertainty. expectations are the previous quarter but still lower and unemployment is Unemployment rate for more robust much faster than in 2016 now 9.1% compared to 7% has been trending growth as export and 2017. at the end of last year lower, however. pace accelerated Source: Moody's Economy.com, Steiner 2020 Meat Market Outlook 2 Presented by: Steiner Consulting Group | (800) 526-4612
Global Situation – Current Canada : Economic growth stalled at the end of 2018 and in Q1. A sharp EU correction in exports Germany and UK caused GDP to jump 3.7% remain problem spots in Q2, however, supported Japan : for the European in part by normalization of Growth slowed down in Q2 Russia : Union. Consumer trade relationship with US. The economy has decelerated and it appears Q3 output demand remains in significantly in the last two growth was even weaker, good shape but a USA : The US economy has quarters. Q2 growth was up dragged down by weak slowdown in exports slowed down considerably and only 0.7% compared to 2.3% for exports to US, China and has negatively recent estimates is for growth all of 2018. Lower oil output, low EU. PMI manufacturing impacted overall in 2019 to be at 2.6%, down oil prices and weak gas demand index in September pointed growth from almost 3% expected have negatively impacted growth to sector contraction. earlier this year. 2020 growth China : has been revised down to 2%. Exports to the US were Odds of recession for 2020 sharply lower in now at highest point since September and GDP 2008 growth expected to slow down again. Other indicators, from Mexico : Conditions have industrial production to deteriorated and Q2 growth was India : retail trade to fixed down 0.8% y/y. A slowdown in Growth has slowed asset investment all global demand and fiscal reforms down at a much pointed to a significant have all contributed to the recent faster pace than deceleration slowdown. expected. Q2 GDP Brazil : The economy has was up 5% y/y, the been very cautiously slowest pace in six expanding. Growth so New Zealand : Q2 growth years. far has fallen well short slowed down from the Australia : of expectations, in part previous quarter and While the economy has been due to the global economy expanded at the affected by the global slowdown, slowdown but also the slowest pace in over three growth remains on track, supported inability of current years. A broad slowdown in by robust domestic demand and an government to global economic activity accommodating monetary policy. implement fiscal reforms. has negatively impacted NZ Source: Moody's Economy.com, Steiner 2020 Meat Market Outlook - 3 - Presented by: Steiner Consulting Group | (800) 526-4612
#1 Economic Situation in US and World Slowdown across all regions REAL GDP GLOBAL GROWTH OUTLOOK GROWTH % 6.0 5.0 4.0 3.0 2.0 1.0 0.0 -1.0 -2.0 2015 2016 2017 2019 Fcst 2020 Fcst -3.0 -4.0 World N. Am. S. Am. Euro Asia Oceania World N. Am. S. Am. Euro Asia Oceania 2015 2.7 2.7 -1.9 2.0 4.5 2.5 2016 3.1 2.3 0.5 2.5 5.1 2.4 2017 3.2 2.4 0.3 2.6 5.1 2.4 2018 3.0 2.8 -0.1 1.9 4.7 2.8 2019 Fcst previous 2.5 2.1 0.3 1.3 4.4 2.0 revised 2.5 2.1 -0.1 1.2 4.2 2.1 2020 Fcst previous 2.8 1.7 2.7 1.7 4.3 2.9 revised 2.8 1.7 2.0 1.3 4.0 2.3 Last update: October 14, 2019 Source: Moody's Economy.com 2020 Meat Market Outlook - 4 - Presented by: Steiner Consulting Group | (800) 526-4612
#1 Economic Situation in US and World Growth but more risks in the horizon Positives Dovish central banks - ANNUAL USA GROWTH RATE OF GDP Low unemployment in key % ch. - Annualized Quarterly Growth Rate 8.00 markets fcast 6.00 Low unemployment in key - markets 4.00 2.00 0.00 Negatives -2.00 US-China trade wars weighing - -4.00 on demand -6.00 Conflicts in the Middle East - -8.00 * Forecast: Moody’s Brexit - -10.00 Populism…it’s not just South - '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 America any more 2020 Meat Market Outlook - 5 - Presented by: Steiner Consulting Group | (800) 526-4612
#1 Economic Situation in US and World US job growth is positive…but pace of growth has slowed USA UNEMPLOYMENT RATE: % NEW JOB CREATION: NON AGRICULTURAL, 000's Data Updated through September 2019 12.00 600 400 10.00 200 Dec 2020 8.00 THOUSAND JOBS Forecast percent 0 3.8% 6.00 -200 -400 4.00 -600 2.00 Sep 2019 3.5% -800 0.00 -1000 200320042005200620072008200920102011201220132014201520162017201820192020 Payrolls in September were up 136k, the lowest rate in four months and below the 12 - month average. Tight job market remains a challenge for the economy at this stage. - 2020 Meat Market Outlook - 6 - Presented by: Steiner Consulting Group | (800) 526-4612
#1 Economic Situation in US and World Foodservice sales have been slowing down but still strong GROCERY STORE $ SALES : Y/Y % CH. FOODSERVICE $ SALES : Y/Y % CH. Latest Data is for September 2019 Latest Data is for September 2019 12.0% 12.0% 10.0% 10.0% 8.0% 8.0% 6.0% 6.0% 4.0% 4.0% 2.0% 2.0% 0.0% 0.0% -2.0% -2.0% -4.0% -4.0% '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 Source: Advance Monthly Sales for Retail & Foodservice, US Census Bureau Foodservice sales have slowed down but growth remains in line with the long term trend. Grocery store sales are firm. 2020 Meat Market Outlook - 7 - Presented by: Steiner Consulting Group | (800) 526-4612
#1 Economic Situation in US and World Fast Food Continues to Outperform Other Sectors FOODSERVICE $ SALES : Y/Y % CH. SAME STORE SALES Latest Data is for September 2019 90% 12.0% 80% 10.0% 70% 8.0% 60% 6.0% 50% 40% 4.0% 30% 2.0% 20% 0.0% 10% -2.0% 0% Family Casual Limited Quick Fine Dining Dining Dining Service Casual -4.0% Higher Sales 43% 56% 14% 62% 50% Lower Sales 50% 39% 43% 23% 25% '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 Same Store Sales - Aug 2019 vs. Aug 2018, Tracking Survey Responses by Industry Segment Source: National Restaurant Association Source: US Census Source: National Restaurant Association 2020 Meat Market Outlook - 8 - Presented by: Steiner Consulting Group | (800) 526-4612
#1 Economic Situation in US and World Foodservice inflation reflects higher labor/operational costs Food CPI Comparisons. Jan 2008 = 100 Source: BLS. Analysis by Steiner Consulting 140.0 135.0 130.0 125.0 120.0 115.0 110.0 Food at Limited Service Restaurants 105.0 Food away from home 100.0 Food at Home 95.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Data updated through: September 2019 2020 Meat Market Outlook - 9 - Presented by: Steiner Consulting Group | (800) 526-4612
# 2 Currency Markets Performance of US$ vs. Imported Beef Currencies in last 12 months US Dollar vs. Currencies of Top Meat Trading Partners % change in the last 12 months (Oct. 2018 - Oct. 2019) 120% 115% USD/Peso Positive for US imports 110% Negative for US exports USD/BRL 105% USD/AUD USD/EUR USD/NZD 100% USD/CAD Negative for US imports 95% Positive for US exports 90% Oct '18 Nov '18 Dec '18 Jan '19 Feb '19 Mar '19 Apr '19 May '19 Jun '19 Jul '19 Aug '19 Sep '19 Oct '19 2020 Meat Market Outlook - 10 - Presented by: Steiner Consulting Group | (800) 526-4612
Recommend
More recommend
