EXPORT OPPORTUNITIES

EXPORT OPPORTUNITIES

WHERE TO GO AND WHAT TO AVOID

MODERATOR Janie GabbettExecutive Editor,

Meatingplace

Opportunities for Exporting Beef & Pork

Erin BorrorEconomist for the U.S. Meat Export Federation

Longer Term Pork Export Trends

0

500

1,000

1,500

2,000

2,500

U.S.

EU-27

Canada

Brazil

China

Chile

Mexico

Source: OECD/FAO Ag Outlook 2011; thousand MT carcass weight equivalent

Global exports account for a relatively steady 6% of global consumption; excluding Chinese consumption exports account for 11-12% of

consumption

U.S. Pork & Variety Meat Exports by Market

0

100,000

200,000

300,000

400,000

500,000

600,000

Mexico

Japan China/HKCanadaKoreaRussiaC/S Am

erAustraliaASEANTaiwan

2009

2010

2011F

Source: USDA/FAS and USMEF Forecast, metric tons

Metric Tons

2011F export value: $5.45 billion, record breaking

2010 U.S. Pork Exports Top Value Markets & Main Export Items

Taiwan1%Others

1%

Korea4%

Aus/NZ4%

Russia5%

China/HK10%

Canada13% Mexico

21%

Japan33%

Japan

Mexico

Canada

China/HK

Russia

Korea

Aus/NZ

C.S. America

ASEAN

Caribbean

Taiwan

Others

Source: USDA/FAS, USMEF

Loins, picnics, butts, bellies, backribs, tenderloins, jowls

Bone-in hams, picnics and offals

Offals and small volumes of butts,

loins, ribs

Bone-in hams and picnics

Butts, picnics

3 Piece & boneless hams

Top Growth Markets for U.S. Pork

• China/Hong Kong• Korea• Japan• Mexico• Central/South America

Major Markets: Pork & Variety Meat Imports from All Suppliers, Jan-Aug

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

China

/HK

Japan

Russi

a

Mex

ico

Korea

Canad

a

Austra

lia

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

2009

2010

2011

Mil US$

Japan $3.85 Billion

Metric Tons Million USD

Jan-Aug 2011 Import

Value

Source: GTA

Per Capita GDP and Pork Consumption

0

5

10

15

20

25

30

35

40

45

0 10,000 20,000 30,000 40,000 50,000

U.S.Canada Australia

EU-27

S. KoreaRussia

MexicoBrazil

China

GDP USD/capita

Red

Mea

t C

onsu

mp

tion

Kg/

Cap

ita

Taiwan

Philippines

Many countries will rely on imported pork to support growth in per capita consumption and/or to maintain current levels

Source: World Factbook and USDA

S. KoreaTaiwan

Canada Australia

S. KoreaTaiwan

Mexico

Canada Australia

S. KoreaTaiwan

PhilippinesMexico

Canada Australia

S. Korea

Japan

Taiwan

China Pork Potential

• Supply fluctuations (account for half of world’s pork production and consumption)

• Soybean imports• Corn prices• Import trends to date

– Domestic production and market access are the big variables, including disease issues /subsidies/corn prices/etc and

– market access issues like ractopamine

Short Term Pork Production Change in Metric Tons

-2000

-1500

-1000

-500

0

500

1000

1500

2000

2500

World

China

EU-27

U.S.Brazil

Russia

Vietnam

Canada

Japan

Philippines

Mexico

Korea

Taiwan

Ukraine

Chile

2011/10

2012/11

World 2011: -1.62 MMT 2012F: +2.3 MMT China 2011: -1.57 MMT 2012F:

+1.78 MMT

Source: USDA/FAS Fall PS&D, Carcass weight equivalent

Growing Correlation Between U.S. Exports to China & U.S. Pork Prices

$/cwtMetric Tons

Source: USDA/ERS and FAS

Korea Pork Potential

– FMD, how much will the industry recover– Per capita consumption growth potential– Elimination of duties– U.S. market share of total pork consumption and

imported pork– The growing chilled market—competing with

domestic– Processing sector switch to U.S. frozen pork after

FMD– EU specifications for single ribbed belly

Korea Hog Industry Outlook

Korea Pork Import Status

0

50,000

100,000

150,000

200,000

250,000

2002 2004 2006 2008 2010

EU-27United StatesCanadaChile

Source: Global Trade Atlas

2011est

2011 est: total imports up 80% to 545,000 MT

Korea Tariff Reduction for Key Frozen Items

Korea Tariff Reduction for Key Chilled Items

Chilled U.S. Pork at Korean Retail

Japan Pork Potential

– U.S. dominant market share of imported pork – Domestic production slow decline– Per capita consumption relatively steady– Unlikely change in gate price system without a

DDA agreement or without Japan’s participation in TPP

– U.S. advantage in supplying chilled high value cuts– U.S. advantage in supplying chilled and frozen cuts

for processing

Japan Pork Situation

0250500750

1,0001,2501,5001,7502,0002,2502,500

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

ProductionConsumptionImports


Japan’s Pork Imports

050,000

100,000150,000200,000250,000300,000350,000400,000450,000500,000

2000 2001

2002 2003

2004 2005

2006 2007

2008 2009

2010

2011 est

EU-27United StatesCanadaMexicoChile

U.S. pork exports to Japan have more than doubled in value since 2003; reaching $1.646 Billion in 2010 and expected to set another record this year. Japan’s total imports are relatively flat but the U.S. has gained market share.


Mexico Pork Potential

– Duty-free and proximal market– U.S. dominates Mexico’s pork imports– Domestic production continues to grow but

pending transition to larger commercial producers and subject to corn prices

– Imports also grow with U.S. as dominant supplier– Per capita consumption grows slowly + population

growth– Continued need for U.S. bone-in hams– Price (and currency) sensitive

Mexico Pork Situation

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2005 2006 2007 2008 2009 2010 2011 2012

ConsumptionProductionExportsImports


Central/South America

– Diverse region– Free trade agreements– Income growth– Imports also grow with U.S. as dominant supplier– Per capita consumption grows with income &

population– Some markets are relatively small but

opportunities for the niche suppliers

Top Exporters: Beef & Variety Meat Export Status

U.S. was the largest beef & variety meat exporter in Jan-Sept 2011!

Data for Jan-August exports:• U.S. 857,680 MT, +26%• Australia 728,073 MT, +1%• Brazil 671,996 MT, -19%• India ??? likely >390,000 MT

– Depending on Egypt ban, etc (export data only available through March)

• New Zealand 301,447 MT, -5%• EU-27 295,359 MT, +110%

– Turkey and Russia• Canada 224,808 MT, -21% • Uruguay 165,248 MT, -15% • Argentina 164,048 MT, -11%• Paraguay 139,189 MT, -13%

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

U.S.

AustraliaBrazilIndia

Met

ric

To

ns

2009

2010

2011


Major Markets: Import Status2011 Beef & Beef Variety Meat Import StatusJanuary through Aug 2011 unless otherwise noted (yr/yr change)• U.S. 500,767 MT, -15%• Russia 493,011 MT, +11.5%• Middle East Jan-June ~465,330 MT, -2%

– depending on India’s exports and excluding Iran• Japan 373,787 MT, +6%• Hong Kong 255,979 MT,+4.5%

– Greater China ~310,900 MT, +8% depending on India • Korea 228,039 MT, +20%• EU-27 166,700 MT, -17%• Mexico 145,446 MT, -12% *Jan-July• Canada 142,685 MT, +18% • Iran 106,220 MT, -6%• Turkey 91,023 MT• Chile 80,309 MT, -6%• Taiwan 65,440 MT, -5%

Source: GTA


0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

Mexico

JapanKoreaCanadaM

id EastRussiaASEANHong Kong/Ch

Taiwan

2003

2010

2011F

U.S. Beef Exports to Top Markets

Source: USDA/USMEF Fall 2011 Forecast, includes variety meats

2011 Exports expected to surpass $5 billion for first time ever, with exports

to Japan & Korea still lagging 2003

Per Capita GDP and Beef Consumption

0

5

10

15

20

25

30

35

40

45

0 10,000 20,000 30,000 40,000 50,000

U.S.

Australia Canada

EU-27

S. KoreaRussia

Mexico

Brazil

China

Source: World Factbook and OECD/FAO; GDP USD/capita

Red

Mea

t C

onsu

mp

tion

Kg/

Cap

ita

Japan

Taiwan

Countries where growth in consumption will come from growth in imports

GDP USD/capita

Beef Outlook Largest Potential Growth Markets

• Japan• Korea• China• Middle East• Mexico

Japan Beef Potential

– U.S. market share of imported beef, back to dominant position of pre-BSE

– Per capita consumption recover to pre-BSE level – Domestic production slow decline– Potential change in the current LT21 months age limit– Preference for U.S. grain-fed, including high Choice– Takes large volumes of “Asia cuts” including short plate– No change in duties likely without Doha or TPP agreement

(38.5 percent ad valorem plus risk of triggering safeguard)

Japan Beef Situation

0

200

400

600

800

1000

1200

1400

1600

ProductionConsumptionImports


Japan’s Beef Imports

050,000

100,000150,000200,000250,000300,000350,000400,000450,000500,000

2000 2001

2002 2003

2004 2005

2006 2007

2008 2009

2010

2011 est

United StatesAustraliaNew ZealandOthers


2011 total imports estimated +5% to 581,000 MT

Korea Beef Potential

– U.S. market share of imported beef, back to dominant position of pre-BSE

– Demand for U.S. grain-fed, especially certain mix of Asian cuts but USMEF working to build demand for more cuts

– Per capita consumption recover to pre-BSE level with further expansion possible

– Elimination of duties through KORUS, from 40% to zero over 15 years

– Slow decline in domestic production

Korea’s Beef Situation

0

100

200

300

400

500

600

700

800

20002001

20022003

20042005

20062007

20082009

20102011

2012

ImportsConsumptionProduction


Korea’s Beef Imports

0

50,000

100,000

150,000

200,000

250,000

2000 2001

2002 2003

2004 2005

2006 2007

2008 2009

2010

2011 est

United StatesAustraliaNew Zealand


2011 total imports estimated +24% to 361,500 MT

China Beef Potential– Once the U.S. regains access, assume tremendous growth potential

(some diversion of current exports)– Rampant foodservice growth– Lack of domestic production, especially of high quality beef– High prices indicate tight supplies– U.S. ability to supply specific high quality cuts in large, consistent

volumes– Expect demand to build for a wide array of cuts and offals– Middle class population and urbanization– GDP growth– Cold chain & infrastructure development– Slowly appreciating currency– Low per capita consumption compared to pork and poultry

China Challenges• Duties + VAT = 27%• De facto import licensing (AQSIQ)• Quota management (MOFCOM’s ARF)• Excessive labeling requirements• Opaque port inspection procedures• Potential plant-by-plant registrations• Undervalued currency• Sanitary barriers

– BSE related beef ban– Ractopamine & beta agonist ban

• plus hormone ban on the books for beef– Zero tolerance for pathogens on fresh/frozen raw meat

Beef Exports to China/Hong Kong/Vietnam, January-August

0

20,000

40,000

60,000

80,000

100,000

120,000

2009 2010 2011

BrazilIndiaUnited StatesAustraliaArgentinaCanadaEU27Uruguay


Middle East Beef Potential– High income growth; business travelers– Beef fits religious requirements (halal can have challenges) – Generally good U.S. access to the region– Range of products from offals to muscle cuts for

processing to HQB– U.S. competitive supplier of certain cuts and growing

demand for high quality– General lack of domestic production– Foodservice growth and cold chain development– Continue as large offal market (Egypt)– Region as a whole is already top beef importer

Mexico Beef Potential

– Growing consumption and production over longer-term

– Domestic production will depend on drought and feed prices

– NAFTA= favorable access; U.S. dominates Mexico’s beef imports

– Price is a challenge but preference for beef– Beef round demand to supplement domestic– Live cattle exports to U.S.

Mexico’s Beef Situation

0

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2005 2006 2007 2008 2009 2010 2011 2012

ConsumptionProductionImports


Mexico Dynamics• Mexican feeder cattle exports to U.S. up 21% to 994,027 head (Jan-Oct 22)• Imports of beef from Mexico also on a record pace at 40,790 mt through

August, up 60%– Now the fourth-largest supplier to U.S. after Canada, New Zealand & Australia,

with 8% market share– Mexico is shipping mostly chilled middle meats to the U.S.

• Cow inventory & calf crop relatively steady ~expansion not expected

02,0004,0006,0008,000

2005 2007 2009 2011

Dairy CowsBeef CowsCalf CropTotal Slaughter

Source: USDA/FAS Fall PS&D Source: USDA/FAS Fall PS&D, Carcass weight equivalent

Thousand Head

The Beef Challenge, Similar to U.S. Scenario

101214161820222426283032

2005 2006 2007 2008 2009 2010 2011 2012

PoultryBeefPork

Mexico’s Per Capita Consumption


Other PointsWhat about Russia??• Likely to be another continued significantly important

market…WTO accession and participation in the rules-based trading system will partially determine the future for U.S. red meat exports

The Faux Medium-Term Potential Boom Market for U.S. Red Meat

• India– Barriers to entry– Lack of cold chain– Incredibly high duties– Religious challenges– Highly fragmented market– Etc

Opportunities for Exporting Poultry

Jim Sumner, President USA Poultry and Egg Export

CouncilInternational Poultry Council

Opportunities for Exporting Poultry

Topics in today’s presentation:

• USAPEEC and its mission

• An overview of U.S. poultry exports• Challenges facing U.S. poultry

exports• Opportunities for U.S. poultry

export growth• Conclusions

USAPEEC and its mission

USAPEEC Locations

• Mexico City• Monterrey• Hong Kong• Singapore• Moscow• Beijing• Central Asia

• Shanghai• Tokyo• Seoul• Middle East• South Africa• Europe

Based in Stone Mountain, Georgia, USAPEEC has 13 international offices in major export markets:

USAPEEC Membership

Processors 48

Trading Companies 89

Commodity Groups (corn, soybean groups)

15

Associate Members (shipping, cold storage, port authorities, etc)

71

Total 223

An Overview of U.S. Poultry Exports

U.S. and Brazil: Top Broiler Exporters

(In 1,000 metric tons)

432 379 255 147 79

1,187992

3,630

3,400

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Bra

zil

US

A

EU

27

Thai

lan

d

Chi

naA

rgen

tina

Can

ada

Chi

le

RO

W

2007

2008

2009

2010

Source: the Global Trade Atlas

USA is the Top Turkey Exporters in the World

257

158134

24 21 18

0

50

100

150

200

250

300

350

USA Brazil EU-27 Canada Chile ROW

1,0

00

MT

2007

2008

2009

2010


U.S. Broiler Exports in the Past Decade

0.00.51.01.52.02.53.03.54.04.5

mill

ion

tons

$0.0$0.5$1.0$1.5$2.0$2.5$3.0$3.5$4.0$4.5

billi

on U

S$

Quantity (left axis)Value (right axis)

Source: USDA/FAS

An average annual increase of 2.1% in volume and 7.1% in value during 2001-2010

Share of U.S. Broiler Production Exported

21.0%21.7%

19.8%

3.1%6.0%

0%

5%

10%

15%

20%

25%

30%

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2006

2007

2008

2009

2010

2011

(e)

Source: USDA/FAS

Top U.S. Broiler Export Markets

China19.9%

Russia20.5%

Mexico10.4%

ROW36.1%

Cuba4.1%

Hong Kong4.6%

Iraq 4.5%

=Mexico13.0%

Hong Kong13.0%

Russia9.8%

ROW51.5%

Iraq4.1% Angola

4.4%Cuba4.2%

2010Broiler exports in 2010 down 5.2% in volume and 1.6% in value from 2009, despite the major losses in China and Russia

2009

Top U.S. Broiler Export Markets(In 1,000 metric tons)

441 439332

148 142 126 104

1,510

138

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

HongKong

Mexico Russia Angola Cuba Iraq Canada China ROW

2007

2008

2009

2010

Source: USDA/FAS

Source: USDA/AMS

Prices: Breast Meat vesus CLQs(Inflation adjusted, Jan 2005 CPI = 100)

0

50

100

150

200

250

300

cent

s pe

r po

und

Breast meat prices (left axis) CLQ prices (right axis)

Source: USDA/AMS

Price Ratio between Breast Meat and Leg Quarters in the U.S.

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

U.S. Demographic Change Helps Drive Up CLQ Prices

Percent of Population Change 2000 - 2010

Hispanic or Latino 16.3% +43%

Non-Hispanic or Latino 83.7% +4.9%

Asian alone 4.8% +43.3%

White alone 72.4% +5.7%

Black or African American alone 12.6% +12.3%

Other 10.2% +26.2%

Source: US Census 2010

Turkey Exports in the Past Decade

050

100150200250300350400

1,00

0 M

T

$0$100$200$300$400$500$600$700$800

milli

on U

S$

Quantity (left axis)Value (right axis)

Source: USDA/FAS

An average annual growth of 2.0% in volume and 6.8% in value in 2001-2010.

Share of Turkey Production Exported

11.8%

1.6%

9.6%

11.0%

10.6%

0.9%

0%

3%

6%

9%

12%

15%

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2006

2007

2008

2009

2010

2011

(e)

Source: USDA/FAS

Share of production exported is expected to increase in 2011 as exports tend to increase faster than production.

Top U.S. Turkey Export Markets(In 1,000 metric tons)

145.6

33.811.3 9.6 8.7

55.4

0255075

100125150175200225250

Mexico China Hong Kong Canada DominicanRepublic

ROW

2007

2008

2009

2010

Source: USDA/FAS

Challenges facing U.S. poultry exports

Challenge of High Feed Grain Prices

• The prolonged economic downturn is a challenge for the world poultry industry because it has led to higher unemployment, lower consumer income, and lower consumption, which translates into a weak market demand for meat protein.

• Our biggest challenge remains high feed grain prices. But, as the most efficient converter of feed to meat, the impact on poultry is less than other meats.

• Record corn and soybean prices, combined with depressed sales, have put nearly every U.S. poultry company in an unprofitable situation. The global situation is similar.

Animal diseases such as AI impact trade

• While earlier AI consumer scares have subsided, incidents of HPAI is on the rise….Asia, Africa and Europe.

• U.S. and Brazil remain free of HPAI. • In Asia and Africa, the prevalence of backyard flocks and

the inability of governments to implement appropriate control measures could spell a major production disaster.

• Even though OIE says trade should not be restricted on basis of LPAI ….many countries still do……China, Taiwan, Philippines, Kuwait, Cuba, Russia…….affecting such states as Virginia, Arkansas, Texas, N. Carolina, Missouri, and Minnesota.

Religious and Cultural Barriers

• This sort of barriers to entry are often encountered in predominately-Muslim countries.

• For example, entry to Malaysia and Indonesia, and Saudi Arabia must meet the halal regulations, meaning animals should be raised, slaughtered and processed in accordance with Muslim rites.

• But definitions, interpretations, and regulations of halal vary widely from country to country in both print and practice.

• The ambiguous regulations combined with cost-inefficient in halal production have dissuaded U.S. poultry processors from selling products to those markets.

Trade Barriers in Major Export Markets

The EU has banned U.S. poultry products since the EU began prohibiting the use of chlorine in chill water in 1997. And the expansion of EU since 1997 has eliminated U.S. key export markets in Eastern Europe.

South Africa launched AD investigation against U.S. chicken bone-in cuts in 1999, and has imposed punitive anti-dumping duties since July 2000.

In apparent retaliation, China launched AD/CVD investigations in September 2009 against U.S. broiler products, and has imposed punitive AD/CVD duties since February 2010.

Bachoco in Mexico joined the anti-dumping frenzy in February 2011. Preliminary determination yet to be announced.

Russia Continues to Cut Poultry Import Quota

553.5

771.9 771.9 841.3 871.4 901.4 931.5

600

139.9

205 205220.6 228.6 236.4 244.4

144.3

73.1 73.168.9 71.2 73.8 76.1

35.714.2

350

0

200

400

600

800

1000

1200

1400

*2003 2004 2005 2006 2007 2008 2009 2010 2011

US EU Brazil China others clqs+bnls poultry

Total: 744 1050 1050 1131 1171 1212 1252 780 350

thousand MT

Opportunities for U.S. poultry export growth

Next Decade: A Great Growth Period for Poultry, Globally

• GDP will grow faster in developing countries, implying more import demand for broiler meat.

• World population hit 7 billion on October 31, 2011. In particular, increased population in the Muslim countries will favor poultry consumption.

• Energy and feed costs are expected to remain high everywhere in the next decade, but poultry is the most energy efficient protein as well as the most efficient converter of feed.

• Also, poultry production demands less water, uses less arable land, and emits less greenhouse gases.

Average Annual GDP Growth Rate

0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%

Developed countries Developing countries

Source: USDA/ERS

Over quarter of the world will be Muslim by 2030

Source: Report on “The Future of the Global Muslim Population” , Jan.

2011

World Broiler Net Exports in the Next Decade

10.2

10.4

8.1

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

milli

on to

ns

Source: FAPRI

Net exports is expected to increase at an average rate of 3.0 percent throughout 2020.

Opportunities in the Chinese Market

• China’s potential is huge because:– low per capita consumption ( <10 kg)– large population and rapid urbanization.– rapid increase in consumer income.– increasing dependence on imports of feed grains.– shortage of water resources on per capita basis.

• In particular, China provides the best market opportunities for U.S. chicken paws and wing tips, which has limited alternative markets in the world.

• But opportunities for broiler exports in the near term are limited due to the punitive AD/CVD duties imposed on U.S. chicken products.

Per Capita Income of Rural and Urban Household in China

03,0006,0009,000

12,00015,00018,00021,00024,000

Chi

nese

Yua

n

Per capita net income for ruralhouseholds Per capita disposable income forurban households

Source: National Bureau of Statistics of China

U.S. Broiler Exports to China

103

0

200

400

600

800

1,00019

9119

9219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

0820

0920

10

1,00

0 M

T

$0

$200

$400

$600

$800

$1,000

milli

on U

SD

Quantity (left axis) Value (right axis)

Source: USDA/FAS

Exports to China in 2009 accounted for 20% of U.S. total exports, but due to the punitive AD/CVD duties, 2010 exports fell to 3%. And so far this year, exports to China were further down 16% year on year.

About the Chinese AD/CVD case

• USTR took the dispute to the WTO on Sept. 20, 2011. • We believe that the U.S. will win the case as the

Chinese methodology was seriously flawed and the anti-dumping proceeding did not comply with WTO rules.

• It’s unfortunate that this dispute has to be addressed through the formal WTO process, but we believe it is necessary that the incorrect methodology be challenged and that U.S. trading rights under WTO be protected.

• The U.S. industry has been cooperating with the Chinese industry and government on other initiatives to improve conditions of two-way poultry trade. Our commitment to those initiatives will not be affected by this separate WTO case.

Mexico: Our Major Market to the South

• Mexico is our new No. 1 market, after loss of Russia and China. Shipments to Mexico in 2010 reached 438,584 metric tons, accounting for 13% of U.S. total broiler exports and 50% of turkey exports worldwide.

• Exports to Mexico have increased rapidly since 2007 with full implementation of NAFTA (all U.S. poultry products now enter duty free, no quota).

• In the long run, potential in Mexico is huge because:– population is projected to increase constantly throughout

2030. – per capita real GDP (in 2005 US$) is projected to increase

from $7,374 in 2010 to $9,568 in 2020 and $12,567 in 2030. – increasingly depends on imports of feed grains. – Mexican domestic production tends to further lag behind

consumption.

Mexican Broiler ProductionLags Behind Consumption

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Production (1,000 MT)Consumption (1,000 MT)

NAFTA

Source: USDA/FAS

BUT….Mexico has now joined the Anti-Dumping Frenzy

As a result of a petition from its largest producer, Bachoco, Mexico initiated AD case against U.S. chicken leg quarters on February 8, 2011.

The U.S. industry as well as the Mexican Poultry Producers Association (UNA) and many public officials in Mexico were surprised, as the U.S. and Mexican poultry industries have a long history of cooperation.

• Our lawyers insist that this case lacks justification. Our calculations show that U.S. companies were not selling their chicken to Mexico at prices below the U.S. price, which is the definition of dumping, but we must go through the fight.

• U.S. CLQ exports to Mexico in the foreseeable future are subject to uncertainties due to the AD case.

Opportunities in the Middle East

• U.S. poultry shipments to the Middle East increased at an average rate of 18.9 percent in the past decade ending in 2010.

• Exports to the Middle East are expected to maintain a double-digit growth in the near term. Currently, the key importers in this region including Iraq, UAE, Qatar, Kuwait, and Jordan.

• In the long run, potential in the Middle East is huge because:– relatively low per capita consumption ( <20 kg)– population is projected to increase from 289.5 million in 2010 to

334.3 million in 2020 and 373.9 million in 2030. – Per capita real income is projected to increase at an average

annual rate of 2.8 percent. – Domestic production is not competitive due to shortage of water,

dependence on imports of feed grains, and halal regulations.

U.S. Poultry Exports to the Middle East

050

100150200250300350

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

(e)

1,00

0 M

T

$0$50$100$150$200$250$300$350

milli

on U

SD


Source: USDA/FAS

Grew at an average annual rate of 18.9% in volume and 16.8% in value in 2001-2010.

Opportunities in South Korea

• Poultry shipments to South Korea in the near term are expected to grow at a double-digit rate.

• In the long run, potential in South Korea is high because:– relatively low per capita consumption ( 15 kg)– per capita real income is projected to increase at an

average annual rate of 3.6 percent throughout 2020. – domestic production is not competitive due to shortage

of water and heavy dependence on imports of feed grains.

– implementation of the KORUS FTA will result in expanded U.S. poultry exports both because of higher Korean poultry import demand and market share gains from other exporter competitors in the market.

U.S. Poultry Exports to South Korea

0

30

60

90

120

15020

01

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

(e)

1,00

0 M

T

$0

$30

$60

$90

$120

$150

milli

on U

SD


Source: USDA/FAS

Opportunities in Other Markets

• Ghana, Gabon, Congo, Nigeria, India, Indonesia, Malaysia, etc.

• Potential In these markets are high in the long run because:– low per capita consumption (e.g. India <3 kg , Indonesia < 4

kg).– large and upwardly mobile population.– Per capita real GDP is predicted to increase at relatively faster

throughout 2020. – heavy dependence on imports of feed grains (except India).

• But the opportunities in the near term are limited due to either protectionism (e.g. India) or the halal regulations (e.g. Indonesia, Malaysia).

• USAPEEC has been working closely with the relevant government organizations both at home and abroad to strive towards goals of improved access with clear rules.

• Despite many trade obstacles we are facing, we are still making progress on expanding export markets and our exports are continuing to grow.

• Biggest challenges are maintaining disease free status and persistent high feed and energy cost.

• In the long run, more people will eat more poultry meat as poultry efficiency in energy and feed conversion prevails.

• To feed the world’s ever-growing population, we must Change our food policies, such as food for fuel. Fight EU-style regulatory environment: animal welfare, cage-

free, GMO’s, etc. Do a better job delivering our positive message to consumers

and government. Support trade based on sound science, not political science.

Conclusions

QUESTIONS & ANSWERS

FOR MORE INFORMATIONJim Sumner: [email protected]

Erin Borror: [email protected]

Janie Gabbett: [email protected] recording and PowerPoint presentation will be emailed to you within

48 hours. For more information:www.meatingplace.com/webinars

mailto:[email protected]



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