JW Marriott, Austin, TX · China: Exports remain resilient despite trade war with USA but risks are heavily weighted to the downside. Equity markets are down 20% YTD New Zealand:

Presented by: Len Steiner

Steiner Consulting Group, 800.526.4612

supporting and promoting imported meat

2019 Annual General Meeting & Conference

JW Marriott, Austin, TX

November 4 - 6, 2019

2020 Meat Market Outlook Presented by: 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

- 1 -


Global Situation – Last Year

2

Source: Moody's Economy.com, Steiner

India:Economy has recovered

as impact from

demonetization has

faded.

Canada: Q2 growth

accelerated to 2.9%

from 1.3% in Q1.

Negotiations with

USA continue over a

revised NAFTA. That

remains a key risk

USA: US GDP revised

higher in Q2 and low

unemployment should

continue to bolster

wages/spending.

Mexico: GDP

improved to 2.6% in

Q2 compared to 1.3%

in Q1. Unemployment

rate increased to 3.5%

but remains below year

ago levels

Argentina: GDP growth

declined a stunning 4.2% in

Q2 compared to +3.6% in

Q1. The economic activity

index continues to head

lower and unemployment is

now 9.1% compared to 7%

at the end of last year

Brazil: Growth

estimates have been

revised lower following

the trucker strike and

election uncertainty.

Unemployment rate

has been trending

lower, however.

EU

Brexit negotiations

are approaching

some key deadlines

and no deal appears

imminent.

Russia:

The Russian economy has

recovered from the impact of

sanctions and expanded 1.3%

in Q1 compared to 0.9% in late

2017.

Japan:

Q2 growth was

higher than expected

and surprised the

market. Robust

private investment

supported growth

China:

Exports remain resilient

despite trade war with

USA but risks are heavily

weighted to the

downside. Equity

markets are down 20%

YTD

New Zealand: Q2

growth numbers

have yet to be

released by

expectations are

for more robust

growth as export

pace accelerated

Australia:

GDP growth in Q2 was

+0.9% compared to +1% in

the previous quarter but still

much faster than in 2016

and 2017.


Global Situation – Current

- 3 -

Source: Moody's Economy.com, Steiner

Canada: Economic growth

stalled at the end of 2018

and in Q1. A sharp

correction in exports

caused GDP to jump 3.7%

in Q2, however, supported

in part by normalization of

trade relationship with US.

USA: The US economy has

slowed down considerably and

recent estimates is for growth

in 2019 to be at 2.6%, down

from almost 3% expected

earlier this year. 2020 growth

has been revised down to 2%.

Odds of recession for 2020

now at highest point since

2008

Brazil: The economy has

been very cautiously

expanding. Growth so

far has fallen well short

of expectations, in part

due to the global

slowdown but also the

inability of current

government to

implement fiscal reforms.

EU

Germany and UK

remain problem spots

for the European

Union. Consumer

demand remains in

good shape but a

slowdown in exports

has negatively

impacted overall

growth

Russia:

The economy has decelerated

significantly in the last two

quarters. Q2 growth was up

only 0.7% compared to 2.3% for

all of 2018. Lower oil output, low

oil prices and weak gas demand

have negatively impacted growth

Japan:

Growth slowed down in Q2

and it appears Q3 output

growth was even weaker,

dragged down by weak

exports to US, China and

EU. PMI manufacturing

index in September pointed

to sector contraction.

China:

Exports to the US were

sharply lower in

September and GDP

growth expected to

slow down again.

Other indicators, from

industrial production to

retail trade to fixed

asset investment all

pointed to a significant

deceleration

India:

Growth has slowed

down at a much

faster pace than

expected. Q2 GDP

was up 5% y/y, the

slowest pace in six

years.

Mexico: Conditions have

deteriorated and Q2 growth was

down 0.8% y/y. A slowdown in

global demand and fiscal reforms

have all contributed to the recent

slowdown.

Australia:

While the economy has been

affected by the global slowdown,

growth remains on track, supported

by robust domestic demand and an

accommodating monetary policy.

New Zealand: Q2 growth

slowed down from the

previous quarter and

economy expanded at the

slowest pace in over three

years. A broad slowdown in

global economic activity

has negatively impacted NZ


#1 Economic Situation in US and WorldSlowdown across all regions

- 4 -

Source: Moody's Economy.com

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

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

World N. Am. S. Am. Euro Asia Oceania

REAL GDPGROWTH % GLOBAL GROWTH OUTLOOK

2015 2016 2017 2019 Fcst 2020 Fcst


#1 Economic Situation in US and WorldGrowth but more risks in the horizon

Positives

- Dovish central banks

- Low unemployment in key markets

- Low unemployment in key markets

Negatives

- US-China trade wars weighing on demand

- Conflicts in the Middle East

- Brexit

- Populism…it’s not just South America any more

- 5 -

* Forecast: Moody’s

-10.00

-8.00

-6.00

-4.00

-2.00

0.00

2.00

4.00

6.00

8.00

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20

% ch.ANNUAL USA GROWTH RATE OF GDP

Annualized Quarterly Growth Rate

fcast


#1 Economic Situation in US and WorldUS job growth is positive…but pace of growth has slowed

- 6 -

- 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.

-1000

-800

-600

-400

-200

0

200

400

600

200320042005200620072008200920102011201220132014201520162017201820192020

TH

OU

SA

ND

JO

BS

NEW JOB CREATION: NON AGRICULTURAL, 000'sData Updated through September 2019

0.00

2.00

4.00

6.00

8.00

10.00

12.00

perc

ent

USA UNEMPLOYMENT RATE: %

Sep 20193.5%

Dec 2020 Forecast

3.8%


#1 Economic Situation in US and WorldFoodservice sales have been slowing down but still strong

Foodservice sales have slowed down but growth remains in line with the

long term trend. Grocery store sales are firm.

- 7 -

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19

GROCERY STORE $ SALES : Y/Y % CH.Latest Data is for September 2019

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19

FOODSERVICE $ SALES : Y/Y % CH.Latest Data is for September 2019

Source: Advance Monthly Sales for Retail & Foodservice, US Census Bureau


#1 Economic Situation in US and WorldFast Food Continues to Outperform Other Sectors

- 8 -

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19

FOODSERVICE $ SALES : Y/Y % CH.Latest Data is for September 2019

Same Store Sales - Aug 2019 vs. Aug 2018, Tracking Survey Responses by Industry Segment

Source: National Restaurant Association

FamilyDining

CasualDining

Fine DiningLimitedService

QuickCasual

Higher Sales 43% 56% 14% 62% 50%

Lower Sales 50% 39% 43% 23% 25%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

SAME STORE SALES

Source: US Census

Source: National Restaurant Association


#1 Economic Situation in US and WorldFoodservice inflation reflects higher labor/operational costs

- 9 -

Data updated through: September 2019

Food CPI Comparisons. Jan 2008 = 100Source: BLS. Analysis by Steiner Consulting

95.0

100.0

105.0

110.0

115.0

120.0

125.0

130.0

135.0

140.0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Food at Limited Service Restaurants

Food away from home

Food at Home


# 2 Currency MarketsPerformance of US$ vs. Imported Beef Currencies in last 12 months

- 10 -

US Dollar vs. Currencies of Top Meat Trading Partners % change in the last 12 months (Oct. 2018 - Oct. 2019)

90%

95%

100%

105%

110%

115%

120%

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

USD/BRL

USD/EURUSD/NZD

USD/AUD

USD/CAD

USD/Peso

Positive for US importsNegative for US exports

Negative for US importsPositive for US exports


# 2 Currency MarketsPrice of Imported 90CL Beef in US$ Trending Higher

- 11 -

307

240

-22%

US $214 cwt

11/28/2012

US $255/cwt

10/26/2019

100

150

200

250

300

350

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Price of 90CL Imported Beef in US Market (CIF) Prices in US$/cwt

USD/cwt

Price inUSD

Current


# 2 Currency MarketsPrice of Imported 90CL Beef in US$ Terms & AUD Terms

- 12 -

Oct-12

Oct-19

$375/cwt

$255/cwt

100

150

200

250

300

350

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Price of 90CL Imported Beef in US Market (CIF East Coast). Prices in US$/cwt and AUD/cwt

USD/cwt

Price inUSD and AUD

AUD/cwt+55% gain from

currency shift


#3 Feed Input CostsCorn supply did not decline as much as first feared

- 13 -

Lower Yield

Sharply lower exports

Lower S/U but still comfortable carryout

2017/18 2018/19

USDA

Actual

USDA

Est

USDA

Sep Est

USDA

Oct Est

vs.

2017/18

.

Planted 90.2 89.1 90.0 89.9 -0.3%

Harvested 82.7 81.7 82.0 81.8 -1.1%

Yield per harvested acre 176.6 176.4 168.2 168.4 -4.6%

Beginning stocks 2,293 2,140 2,445 2,114 -7.8%

Production 14,609 14,420 13,799 13,779 -5.7%

Imports 36 28 50 50 38.9%

Supply, total 16,939 16,588 16,295 15,944 -5.9%

Feed and residual 5,304 5,618 5,175 5,300 -0.1%

Ethanol for fuel 5,605 5,376 5,450 5,400 -3.7%

Food, seed and residual 1,452 1,415 1,430 1,415 -2.5%

Domestic use, total 12,361 12,409 12,055 12,115 -2.0%

Exports 2,438 2,065 2,050 1,900 -22.1%

Use, total 14,798 14,474 14,105 14,015 -5.3%

Ending stocks 2,140 2,114 2,190 1,929 -9.9%

Avg. farm price ($/bu) 3.36 3.61 3.60 3.80 13.1%

Ending Stocks/Use 14.5% 14.6% 15.5% 13.8%

Source: USDA Monthly WASDE Report.

** Corn crop marketing year starts September 1.

% Change2019/20

U.S. Corn Supply and Use


#3 Feed Input Costs

- 14 -

Corn prices have been stable in the last five years and mostly under $4/bu.

Nearby corn futures


#3 All time record meat protein production in 2018

and expected to continue in 2020 and 2021

- 15 -

Combined USA Beef, Pork, Broiler and Turkey ProductionMillion Pounds. Carcass Wt. Basis. USDA Actual + Steiner Forecasts

90,929

105,932

40,000

50,000

60,000

70,000

80,000

90,000

100,000

110,000

+16.3%


#3 Protein Growth Expected to Slow Down Even as it

Hits All Time Record Highs

- 16 -

2017 2018 % CH. 2019 % CH. 2020 % CH. 2021 % CH.

BEEF 26,187 26,872 2.6% 27,342 1.7% 27,446 0.4% 27,235 -0.8%

PORK 25,584 26,315 2.9% 27,653 5.1% 28,478 3.0% 28,912 1.5%

BROILERS 41,217 42,146 2.3% 42,964 1.9% 43,594 1.5% 43,939 0.8%

TURKEYS 5,905 5,802 -1.7% 5,746 -1.0% 5,772 0.4% 5,846 1.3%

LAMB 145 153 5.4% 150 -2.0% 149 -0.4% 153 2.5%

VEAL 74 76 2.0% 74 -2.0% 71 -4.3% 73 3.0%

TOTAL 99,113 101,365 2.3% 103,929 2.5% 105,510 1.5% 106,159 0.6%


#4 USA Cattle/Beef SuppliesCattle Inventory Near Its Cyclical Peak

- 17 -

INVENTORY (000 OMITTED) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

% Ch. vs.

2018

2020

Estimate

% Ch. vs.

2019

ALL CATTLE AND CALVES 94,081 92,887 91,160 90,095 88,243 89,173 91,888 93,625 94,298 94,760 0.5% 94,919 0.2%

COW AND HEIFERS THAT HAVE CALVED 40,526 40,068 39,517 38,853 38,165 38,644 39,476 40,539 40,898 41,119 0.5% 41,004 -0.3%

BEEF COWS 31,440 30,913 30,282 29,631 28,956 29,332 30,164 31,171 31,466 31,766 1.0% 31,714 -0.2%

DAIRY COWS 9,087 9,156 9,236 9,221 9,209 9,312 9,312 9,369 9,432 9,353 -0.8% 9,290 -0.7%

HEIFERS 500LBS. AND OVER 19,778 19,650 19,445 19,256 18,919 19,266 19,902 20,112 20,218 20,230 0.1% 20,220 0.0%

BEEF COW REPLACEMENT 5,443 5,135 5,281 5,429 5,556 6,086 6,335 6,363 6,108 5,925 -3.0% 5,850 -1.3%

DAIRY COW REPALCEMENT 4,551 4,577 4,618 4,546 4,539 4,710 4,814 4,754 4,768 4,702 -1.4% 4,650 -1.1%

OTHER HEIFERS 9,784 9,938 9,546 9,281 8,824 8,469 8,753 8,995 9,341 9,604 2.8% 9,720 1.2%

STEERS 500 LBS. AND OVER 16,568 16,394 15,957 15,931 15,623 15,630 16,305 16,374 16,528 16,633 0.6% 16,785 0.9%

BULLS 500 LBS. AND OVER 2,190 2,165 2,100 2,074 2,038 2,109 2,137 2,244 2,252 2,263 0.5% 2,260 -0.1%

HFRS, STRS AND BULLS UNDER 500 LBS. 15,019 14,610 14,141 13,983 13,498 13,524 14,067 14,356 14,401 14,515 0.8% 14,650 0.9%

ANNUAL CALF CROP 35,740 35,357 34,469 33,630 33,522 34,087 35,063 35,758 36,403 36,300 -0.3%

Note: Shaded numbers represent Steiner estimates

JANUARY 1st U. S. CATTLE INVENTORY


#4 USA Cattle/Beef SuppliesNext Year Will Be The 6th Year of Current Cycle

- 18 -

Comparing US Cattle Cycles of the Last +50 YearsY/Y Change in Cattle Inventories.

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

0 +1 +2 +3 +4 +5 +6 +7 +8 +9 +10 +11 +12 +13 +14

1958 - 1967

1967 - 1979

1979 - 1990

1990 - 2004

2004 - 2014

2014 - Current

# of years from the start of the cycle


#4 Cattle/Beef SuppliesUS Cattle Inventories were +0.7% in 2018 and Forecast +0.5% in 2019

- 19 -

1958 = 91,176

1975 = 132,028

1990 = 95,816

1996 = 103,548

2004 = 94,403

2007 = 96,573

40,000

50,000

60,000

70,000

80,000

90,000

100,000

110,000

120,000

130,000

140,000

TOTA

L IN

VEN

TORIE

S,

00

0 O

MIT

TED

CATTLE INVENTORIES, 000 HEAD, 1920 - 2019 + 2020 Forecast

Jan 1, 202094.9 mil head


#4 Cow/Bull Slaughter Capacity

- 20 -

WEEKLY COW & BULL SLAUGHTER. '000 HEADSource: USDA-AMS

90

100

110

120

130

140

150

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

5-Yr Avg. 2017 2018 2019

❖ Dairy liquidation forced kills up in March and early April. Slaughter is currently near seasonal highs.


#4 Cattle/Beef SuppliesSteer Weights Continue to Drift Lower, Limiting Supply of Beef Coming to Market

- 21 -

30

4.5

135

650

680

710

740

770

800

830

860

DR

ESSE

D W

EIG

HTS

, PO

UN

DS

FI CATTLE AVERAGE DRESSED WEIGHTS: 1990 - 2019Dressed Carcass Weights. Weekly. USDA


#4 Cattle/Beef SuppliesUS Productivity (feedlot based) vs. Other Key Producers/Exporters

- 22 -

BEEF KILOGRAM PRODUCED (DRESSED WT.) PER ANIMAL IN THE HERD. ANNUALSOURCE: USDA

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

USA

Australia

Brazil

N. Zealand

UruguayArgentina


#4 Cattle/Beef SuppliesUS Cattle Prices Have Been Extremely Volatile in Last 3 Years

- 23 -


#4 Cattle/Beef SuppliesLack of profitability driving liquidation of the beef cow herd in 2018/19

-200

-100

0

100

200

300

400

500

600

ESTIMATED AVERAGE COW-CALF RETURNSReturns over cash costs (includes pasture rent), Annual, US$/cow

forecast

Source: LMIC

- 24 -


#4 Cattle/Beef SuppliesFemale Slaughter Ratio Indicates Expansion Cycle Has Come to an End

- 25 -

MAKE SURE TO ADJUST DATA RANGE IN THE CHART

0.38

0.40

0.42

0.44

0.46

0.48

0.50

0.52

0.54

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Ratio of Female Slaughter (Heifers + Cows) To Total US Cattle SlaughterWeekly Data and 52wk Moving Average. Last Reported Week is October 12, 2019

52-wk MA

weeklyratio

Liq

uid

ation

Re

bu

ildin

g


#4 Cattle/Beef SuppliesCow Slaughter Outlook for rest of 2019 & in 2020

- 26 -

2019 cow slaughter for Jan – Aug = 4.211MM head, +2.5% higher than a year ago

Forecast for cow slaughter in 2019 = +2.2%

Forecast for cow slaughter in 2020 =

+0.7%

Robust dairy prices could cause slaughter to actually decline y/y in 2020

Ratio of Cow Slaughter vs. January 1 All Cow InventoryAnnual Data. Source: USDA

10.0%

11.0%

12.0%

13.0%

14.0%

15.0%

16.0%

17.0%

18.0%

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20F

Est

1990 - 2018 Avg.

2020 Meat Market Outlook Presented by: Steiner Consulting Group | (800) 526-4612- 27 -

BEEFQUARTERLY SLAUGHTER, PRODUCTION, IMPORTS, EXPORTS AND DISAPPEARANCE

=A x B

A B C D E F G =C+D-E+F+G

Year & Quarter

Commercial

Slaughter

Percent

Change From

Year Ago

Average

Carcass

Weights

Percent

Change From

Year Ago

Commercial

Meat

Production

Percent

Change From

Year Ago Imports

Percent

Change From

Year Ago Exports

Percent

Change From

Year Ago

Farm

Production

Adjustments

to Ending

Stocks to

Balance

Total

Disappearance

Percent

Change From

Year Ago

(1,000 Head) Lbs. (Million Lbs.) (Million Lbs.) (Million Lbs.) (Million Lbs.) (Million Lbs.) (Million Lbs.)

2015

1st Qtr. 6,969 -5.5% 813 2.2% 5,665 -3.5% 877 46.9% 524 -10.2% 24 49 6,091 3.7%

2nd Qtr. 7,229 -7.8% 810 2.7% 5,856 -5.3% 989 28.9% 607 -9.1% 8 -8 6,238 0.0%

3rd Qtr. 7,291 -4.5% 832 2.8% 6,068 -1.8% 889 16.3% 542 -20.3% 8 32 6,456 2.3%

4th Qtr. 7,263 -0.9% 841 2.3% 6,109 1.5% 613 -25.1% 595 -7.5% 24 19 6,169 -2.4%

Year 28,752 -4.7% 824 2.5% 23,698 -2.3% 3,368 14.3% 2,267 -11.9% 63 92 24,953 0.9%

2016

1st Qtr. 7,184 3.1% 826 1.7% 5,938 4.8% 792 -9.7% 535 2.2% 25 -41 6,179 1.4%

2nd Qtr. 7,631 5.6% 811 0.1% 6,187 5.7% 831 -16.0% 621 2.4% 8 -24 6,381 2.3%

3rd Qtr. 7,845 7.6% 825 -0.9% 6,472 6.6% 751 -15.6% 660 21.9% 8 73 6,643 2.9%

4th Qtr. 7,919 9.0% 837 -0.5% 6,625 8.4% 638 4.1% 740 24.3% 25 66 6,614 7.2%

Year 30,578 6.4% 825 0.1% 25,221 6.4% 3,012 -10.6% 2,557 12.8% 67 74 25,817 3.5%

2017

1st Qtr. 7,714 7.4% 817 -1.1% 6,303 6.2% 700 -11.7% 653 21.9% 26 -141 6,234 0.9%

2nd Qtr. 8,076 5.8% 793 -2.2% 6,407 3.5% 812 -2.3% 680 9.5% 9 -63 6,484 1.6%

3rd Qtr. 8,254 5.2% 816 -1.1% 6,736 4.1% 814 8.4% 746 12.9% 9 107 6,919 4.2%

4th Qtr. 8,145 2.9% 828 -1.1% 6,742 1.8% 668 4.7% 781 5.5% 26 -11 6,643 0.4%

Year 32,189 5.3% 814 -1.4% 26,187 3.8% 2,993 -0.6% 2,859 11.8% 68 -108 26,281 1.8%

2018

1st Qtr. 7,878 2.1% 821 0.5% 6,466 2.6% 721 3.1% 731 12.0% 26 -32 6,451 3.5%

2nd Qtr. 8,426 4.3% 798 0.6% 6,726 5.0% 805 -0.9% 801 17.8% 9 -22 6,717 3.6%

3rd Qtr. 8,361 1.3% 816 -0.1% 6,819 1.2% 807 -0.8% 828 11.0% 9 85 6,892 -0.4%

4th Qtr. 8,341 2.4% 823 -0.6% 6,862 1.8% 664 -0.5% 800 2.5% 26 110 6,861 3.3%

Year 33,005 2.5% 814 0.1% 26,872 2.6% 2,998 0.2% 3,161 10.5% 70 141 26,921 2.4%

2019

1st Qtr. 7,934 0.7% 808 -1.5% 6,414 -0.8% 738 2.4% 696 -4.8% 27 -25 6,458 0.1%

2nd Qtr. 8,573 1.7% 795 -0.4% 6,814 1.3% 836 3.9% 790 -1.4% 9 -35 6,835 1.8%

* 3rd Qtr. 8,545 2.2% 815 -0.1% 6,964 2.1% 780 -3.4% 830 0.2% 9 160 7,083 2.8%

* 4th Qtr. 8,357 0.2% 825 0.3% 6,895 0.5% 645 -2.9% 820 2.4% 27 20 6,766 -1.4%

* Year 33,410 1.2% 811 -0.4% 27,087 0.8% 3,000 0.1% 3,136 -0.8% 71 95 27,117 0.7%

2020

* 1st Qtr. 7,980 0.6% 815 0.8% 6,503 1.4% 710 -3.9% 750 7.8% 27 -40 6,450 -0.1%

* 2nd Qtr. 8,547 -0.3% 800 0.7% 6,838 0.4% 760 -9.1% 825 4.5% 9 -50 6,732 -1.5%

* 3rd Qtr. 8,570 0.3% 821 0.7% 7,036 1.0% 745 -4.5% 895 7.8% 9 50 6,945 -1.9%

* 4th Qtr. 8,282 -0.9% 829 0.5% 6,866 -0.4% 610 -5.4% 885 7.9% 27 -10 6,607 -2.3%

* Year 33,380 -0.1% 816 0.7% 27,244 0.6% 2,825 -5.8% 3,355 7.0% 71 10 26,795 -1.2%

2021

* 1st Qtr. 7,839 -1.8% 820 0.6% 6,428 -1.2% 710 0.0% 770 2.7% 27 -75 6,320 -2.0%

* 2nd Qtr. 8,419 -1.5% 805 0.6% 6,777 -0.9% 770 1.3% 845 2.4% 9 -50 6,661 -1.0%

* 3rd Qtr. 8,468 -1.2% 826 0.6% 6,994 -0.6% 790 6.0% 910 1.7% 9 50 6,933 -0.2%

* 4th Qtr. 8,112 -2.1% 835 0.7% 6,773 -1.3% 620 1.6% 890 0.6% 27 -10 6,520 -1.3%

* Year 32,838 -1.6% 822 0.6% 26,973 -1.0% 2,890 2.3% 3,415 1.8% 71 -25 26,494 -1.1%

* Estimates


#5 Demand/Supplies in Other MarketsKey Metrics for Major Global Beef Importers

Cattle

Population

Human

Population

Cattle/

Person

Cattle

Slaughter

Cattle Sltr./

Cattle Inv.

Beef

Production

Prod. KG /

Cattle Sltr.

Beef

Exports

Beef Exports /

Beef Prod.

000 head mil. People 000 head MT, CWE KG, CWE

USA 94,760 331 0.29 34,018 0.36 12,289 361 1,418 12%

CANADA 11,440 37 0.31 3,675 0.32 1,330 362 570 43%

MEXICO 16,699 126 0.13 6,250 0.37 2,030 325 355 17%

AUSTRALIA 25,734 26 1.01 8,500 0.33 2,300 271 1,657 72%

N. ZEALAND 10,107 5 2.00 4,375 0.43 686 157 650 95%

BRAZIL 238,158 211 1.13 40,575 0.17 10,210 252 2,250 22%

URUGUAY 11,396 4 3.24 2,255 0.20 568 252 470 83%

ARGENTINA 53,805 45 1.19 13,500 0.25 3,040 225 700 23%

INDIA 306,700 1352 0.23 38,800 0.13 4,287 110 1,600 37%

Data source: USDA

- 28 -


#5 Demand/Supplies in Other MarketsJanuary Inventory trends in Australia, New Zealand, Uruguay & Brazil

- 29 -

0

10,183

10,368

10,033

10,152 10,14610,107

10,12810,096

9,600

9,700

9,800

9,900

10,000

10,100

10,200

10,300

10,400

10,500

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F 2020F 2021F

NEW ZEALAND CATTLE INVENTORIES: JANUARY 1 STOCKSSource: USDA Foreign Agricultural Service000 head

-3.2%

1.2% -0.1%

-0.4%0.2%

-0.3%

0

29,29129,102

27,413

24,971

26,176

25,734

24,484 24,434

22,000

23,000

24,000

25,000

26,000

27,000

28,000

29,000

30,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F 2020F 2021F

AUSTRALIA CATTLE INVENTORIES: JANUARY 1 STOCKSSource: USDA Foreign Agricultural Service000 head

-5.8%

-8.9%

4.8%

-1.7%

-4.9% -0.2%

0

11,903

12,05312,016

11,864

11,744

11,39611,441

11,631

10,800

11,000

11,200

11,400

11,600

11,800

12,000

12,200

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F 2020F 2021F

URUGUAY CATTLE INVENTORIES: JANUARY 1 STOCKSSource: USDA Foreign Agricultural Service000 head

-0.3%

-1.3%

-1.0%

-3.0%0.4%

1.7%

0

219,180

226,045

232,350

238,158

244,143249,000

150,000

170,000

190,000

210,000

230,000

250,000

270,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F 2020F 2021F

BRAZIL CATTLE INVENTORIES: JANUARY 1 STOCKSSource: USDA Foreign Agricultural Service000 head

3.1%

2.8%

2.5%

2.5%

2.0%

0

51,545

52,565

53,51553,715 53,805

54,085 54,185

45,000

46,000

47,000

48,000

49,000

50,000

51,000

52,000

53,000

54,000

55,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F 2020F 2021F

ARGENTINA CATTLE INVENTORIES: JANUARY 1 STOCKSSource: USDA Foreign Agricultural Service000 head

1.8%0.4% 0.2%

0.5% 0.5%

0

16,615 16,490 16,584 16,69916,900

17,150

14,000

15,000

16,000

17,000

18,000

19,000

20,000

21,000

22,000

23,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F 2020F 2021F

MEXICO CATTLE INVENTORIES: JANUARY 1 STOCKSSource: USDA Foreign Agricultural Service000 head

-0.8% 0.6% 0.7%1.2%

1.5%


#5 Demand/Supplies in Other MarketsAustralia Beef Exports Diversifying Away from the US

- 30 -

Key Markets for Australian Beef: 2012 - 2019Metric Ton. Shipped Weight Basis

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Jan

Mar

May Ju

l

Sep

Nov Ja

n

Mar

May Ju

l

Sep

Nov Ja

n

Mar

May Ju

l

Sep

Nov Ja

n

Mar

May Ju

l

Sep

Nov Ja

n

Mar

May Ju

l

Sep

Nov Ja

n

Mar

May Ju

l

Sep

Nov Ja

n

Mar

May Ju

l

Sep

Nov Ja

n

Mar

May Ju

l

Sep

Nov

2012 2013 2014 2015 2016 2017 2018 2019

ChinaUSA

ROW

Japan

S. Korea


#5 Demand/Supplies in Other MarketsNew

Zealand Beef Diverts to China in 2019

- 31 -

Share of New Zealand Beef Exports to USA and China Share of New Zealand Beef Exports During Jan-Sep 2019Data Source: Stats NZ. Analysis by Steiner Consulting

0%

10%

20%

30%

40%

50%

60%

70%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

USA30%

China46%

Japan4%

S. Korea2%

Canada3%

ROW15%

365,209 metric ton s.w.


#6 African Swine Fever China Pork in Context of Global Meat Protein Supply

- 32 -

China breeding herd by end of the

year could be down 50% from

2017.

China’s pork production next year

could be down as much as 40%

from 2017 levels.

This would represent a shortfall of

21.8 million MT. (48.1 billion lb.)

It would represent a decline of 7%

in global meat supplies of the

three main animal proteins.

2017 Meat Protein Supply for Top Global Meat MarketsSource: USDA-FAS & Steiner Consulting

Pork Row19%

Pork China18%

Chicken32%

Beef (incl. buffalo)

20%

Other11%

298,353 metric ton

Pork37.5%


#6 African Swine Fever Meat Consumption Patterns Across the World

- 33 -

Meat Protein Consumption. Kilogram per PersonSource: OECD

Beef Pork Poultry Sheep Combined Beef Pork Poultry Sheep

South America

Argentina 39.6 10.6 40.0 1.2 91.4 43% 12% 44% 1%

Brazil 25.9 11.4 37.4 0.5 75.2 34% 15% 50% 1%

Colombia 11.5 7.1 28.6 0.2 47.4 24% 15% 60% 0%

EU-28 10.9 32.1 24.2 1.8 69.0 16% 47% 35% 3%

Asia

Japan 7.2 15.5 16.9 0.1 39.7 18% 39% 43% 0%

S. Korea 10.3 29.8 17.2 0.3 57.5 18% 52% 30% 0%

Malaysia 4.8 6.0 46.5 1.0 58.3 8% 10% 80% 2%

China 3.9 30.3 11.9 3.1 49.2 8% 62% 24% 6%

Oceania

Australia 21.1 21.3 44.0 8.6 94.9 22% 22% 46% 9%

N. Zealand 12.9 17.7 37.0 4.5 72.2 18% 25% 51% 6%

North America

USA 25.9 23.1 48.9 0.4 98.4 26% 23% 50% 0%

Canada 17.3 16.5 35.1 0.9 69.9 25% 24% 50% 1%

Mexico 8.8 12.3 27.7 0.5 49.3 18% 25% 56% 1%

Middle East/India

India 0.5 0.2 2.1 0.5 3.3 15% 6% 64% 14%

S. Arabia 3.5 0.2 39.7 5.1 48.5 7% 0% 82% 10%

Egypt 8.8 0.0 11.4 1.2 21.3 41% 0% 53% 5%


#6 African Swine Fever What we know of African Swine Fever

- 34 -

Deadly to hogs

Highly contagious

Various transmission vectors

No cure and no vaccine

Not dangerous to humans

This is a very hardy virus. It can live for a long time in the freezer. It is only

killed with heat at high temperatures for long periods of time. It can be

easily transmitted from animal to animal. It can be passed to hogs by

feeding scraps, by coming in contact with wild boards, by feeding them

infected feed or through employees bringing the disease into farms via

trucks, boots, etc.


#6 African Swine Fever Spread of African Swine Fever

- 35 -

2007 Spread to Georgia, Russia 2010 – 2018 Eastern Europe 2018 – Current Southeast Asia


#6 African Swine Fever Pre-ASF Consumption Patterns

- 36 -

Pork Consumption in Selected Countries and Rest of the World (ROW)Source: USDA-FAS. Billion Pounds. Carcass Weight Equivalent.

0

20

40

60

80

100

120

140

China EU USA Russia Brazil Vietnam Japan Mexico S. Korea ROW


#6 African Swine Fever Russia’s Experience with ASF

- 37 -

Russia Pork Production + Imports000 MT. Source: USDA-FAS. Analysis by Steiner Consulting

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Lesson from Russian producers:

“Get bigger and cleaner or get out”Source: Miratorg quoted in South China Morning Post


#6 African Swine Fever Current Hog Situation in China

- 38 -

Sows: -16M head-39% Y/Y

All Hogs: -156M head-41% Y/Y

China Sow Inventory M/M % ChangeSource: Ministry of Agriculture of China

-9.10%

-2.80%

-10.00%

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

2017 2018 2019

-38.9%

China Live Hog Inventory M/M % ChangeSource: Ministry of Agriculture of China

-9.40%-9.80%

-3.00%

-12.00%

-10.00%

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

2017 2018 2019

-41.1%


#6 African Swine Fever China Prices Skyrocket

- 39 -

▪ Piglet: +174%

▪ Hog: +136%

▪ Retail Pork: +112%

Y/Y Price Changeas of Oct 23, 2019

China Price of Baby Pigs, Live Hogs and Retail Pork, Yuan per KG.Source: China Ministry of Agriculture. Analysis by: Steiner Consulting

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

50.00

55.00

60.00

65.00

70.00

75.00

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Piglet Price

Live Hog Price

Pork Price


#6 African Swine Fever Historical China Pork Consumption

- 40 -

Per Capita Pork Consumption in China. Assumption: Production down 40% vs. 2017. Imports up 150%.Source: USDA-FAS. Converted to Pounds per Person. Carcass Weight Equivalent.

25

77

72

95

88

77

57

20

30

40

50

60

70

80

90

100

1980 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Blue EarDisease(PRRS)

African SwineFever

???

lb./pp (carcass wt. basis)35% decline

How much of

this will be

replaced by

pork imports

and other

meat proteins,

including

chicken


#6 African Swine Fever China beef and pork imports YTD

- 41 -

Sep: +72%YTD: +44%

Sep: +52%YTD: +33%Pork Beef

China Beef Imports in Jan - Sep 2019. Metric Ton.Source: China Customs

Import Partners 9/1/2018 9/1/2019 Y/Y MT Y/Y %

Jan - Sep

2018

Jan - Sep

2019 Y/Y MT Y/Y %

Brazil 31,652 36,294 4,642 15% 221,566 200,624 (20,942) -9%

Uruguay 19,096 23,747 4,650 24% 160,701 193,148 32,448 20%

Argentina 20,969 35,445 14,477 69% 119,053 217,778 98,725 83%

Australia 15,657 33,451 17,794 114% 126,719 181,051 54,333 43%

New Zealand 9,198 16,059 6,861 75% 87,821 149,011 61,190 70%

Canada 649 - (649) -100% 4,650 9,948 5,298 114%

South Africa 769 - (769) -100% 4,058 1,872 (2,186) -54%

Costa Rica 517 832 315 61% 3,667 6,525 2,858 78%

United States 471 1,045 573 122% 5,194 5,284 90 2%

Other 773 4,466 3,694 478% 4,612 14,456 9,844 213%

Total 99,752 151,339 51,588 52% 738,040 979,698 241,658 33%

China Pork Import Update: Latest Data is for September 2019Source: China Customs Statistics. Data is in Metric Ton, Product Wt.

9/1/2018 9/1/2019

Jan-Sep

2018

Jan-Sep

2019

European Union 59,828 100,974 41,146 69% 572,991 810,437 237,446 41%

Spain 19,366 31,459 12,093 62% 173,425 247,070 73,645 42%

Germany 16,579 26,720 10,140 61% 173,702 221,539 47,837 28%

Netherlands 6,957 12,768 5,812 84% 62,755 98,610 35,855 57%

Denmark 5,328 9,826 4,498 84% 55,887 88,728 32,842 59%

France 3,675 8,539 4,864 132% 36,476 56,337 19,861 54%

United Kingdom 4,300 6,502 2,201 51% 35,236 52,553 17,317 49%

Ireland 3,057 4,051 994 33% 24,803 36,765 11,962 48%

Austria 71 1,060 989 71 7,513 7,443

Portugal - 51 51 - 1,321 1,321

Belgium 494 - (494) 3,628 - (3,628)

Hungary - - - 7,003 - (7,003)

Romania - - - - - -

Italy 1 - (1) 5 - (5)

Lithuania - - - 1 - (1)

Estonia - - - 1 - (1)

- - -

Brazil 15,554 22,438 6,884 44% 108,423 143,984 35,560 33%

Canada 10,749 2,896 (7,853) -73% 124,153 171,565 47,412 38%

United States 3,623 26,248 22,625 625% 80,466 139,428 58,962 73%

Chile 4,243 7,773 3,530 83% 34,239 50,904 16,665 49%

Finland 251 249 (2) -1% 1,381 2,967 1,586 115%

Mexico 70 1,258 1,188 1698% 1,398 6,417 5,019 359%

New Zealand - - - - -

Total 94,317 161,836 67,519 72% 923,053 1,325,701 402,649 44%


#6 African Swine Fever USA and EU hog price comparison

- 42 -

EU hog price: $90/cwt

+12% tariff: $108/cwt

USA hog price:

$58/cwt

+62% tariff:

$94/cwt

*** addl. 10% tariff was

suspended

Hog Carcass Prices in USA and EUSource: USDA and European Comission. Prices Converted to USD/cwt.

58.5

88.2

95.0

90.5

89.8

40.0

50.0

60.0

70.0

80.0

90.0

100.0

2018 2019

USA

France

Germany

Spain

Denmark

As of 10/18


#6 African Swine Fever Shortfall in China Pork Production in Global Context

- 43 -

Shortfall in China pork production vs. Global SupplySource: USDA-FAS 2017 Pork Production & Steiner Calculations

0

5

10

15

20

25

30

ChinaShortfall

USA Production EU Production ROW


#6 African Swine Fever Pork Consumption Preferences in China

- 44 -


#6 African Swine Fever Decline in China Meat Protein Supply Availability

- 45 -

Change in China Production of Pork, Chicken and BeefSource: USDA-FAS and Steiner Consulting

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2017 2020

Pork

Chicken

Beef21.8 MMreduction in pork supply


#6 African Swine Fever USA and China Meat Consumption Comparison

- 46 -

USA Consumption of Red Meat & Poultry. Lb./PP China Consumption of Red Meat, Poultry and Fish. Lb./PPSource: OECD Dataset for 2017. Red Meat Data in CWE. Poultry in RTC. Source: OECD Dataset for 2017. Red Meat Data in CWE. Poultry in RTC.

Beef57

26%

Pork51

24%

Poultry10850%

Sheep Meat, 1, 0%

217pounds per person

Beef9

8%

Pork67

62%

Poultry26

24%

Sheep Meat

76%

108pounds per person


#6 African Swine Fever China Beef Imports, Metric Ton, Carcass wt. basis

- 47 -

China now accounts for:

- +70% of Argentina

exports

- +65% of Uruguay

exports

- +40% of Brazil exports

(incl. HK)

- +50% of New Zealand

exports

- +20% of Australia

exports

China Annual Beef Imports: 2000 - 2020Source: USDA-FAS, Actual + Estimates

1,467

2,400

2,900

0

500

1,000

1,500

2,000

2,500

3,000

3,500


#6 African Swine Fever China Pork Imports, ‘000 Metric Ton, Carcass wt. basis

- 48 -

China Annual Pork Imports: 2000 - 2020Source: USDA-FAS, Actual + Estimates

1,561

2,600

3,500

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000 '000 MT


#6 African Swine Fever China Chicken Imports, ‘000 Metric Ton, Carcass wt. basis

- 49 -

China Annual Chicken Imports: 2000 - 2020Source: USDA-FAS, Actual + Estimates

342

625

750

0

100

200

300

400

500

600

700

800 '000 MT


#6 African Swine Fever China Accounts for a Larger Share of Global Exports

- 50 -

China Share of Global Exports of Beef, Pork and Chicken China Share of Global Exports of Beef, Pork and ChickenSource: USDA-FAS Source: USDA-FAS

7%

14%

3%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Beef Pork Chicken

2015

25%

34%

6%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Beef Pork Chicken

2020


#6 African Swine Fever China production response

- 51 -

Recently the Chinese government has pushed for more domestic pork

production

- By easing environmental constraints

- By encouraging new and larger hog farms be built

Also, the current high price for hogs in China has given an economic

incentive for people to enter the pork business. However, past government

programs, which failed to pay famers for hogs that died from ASF gives

many pause because of risks.


#6 African Swine Fever Biological Constraints to Immediate Ramp up

- 52 -

A female pig becomes sexually active at about 190 – 230 days

The gestation period for hogs is about 114 days. In the US, the growout

time from birth is about 182 days.

So for a female pig born today and added to the breeding herd, the pigs

from her first litter will go to market in about 526 days.

In China grow out time varies much more than in the US and on

average it is longer than 182 days.

So if the push for more production in China started hard in August

2019, the effect would not be expected to show up in the market until

January 2021, at the earliest.


#6 African Swine Fever Conclusions

- 53 -

China will be critically short of their preferred animal protein in 2020

There is not enough tradeable pork in the world for China to realistically

supplement 100% of the shortfall.

The question will be:

Do the Chinese do without?

Do the Chinese increase imports of pork as much as they can ????

Do the Chinese change their diet to replace pork with other animal

proteins and is so which one?

Certainly it appears the Chinese second preference for animal protein is poultry

and the Chinese poultry mix is probably 90% chicken and 10% duck.

World protein production of chicken, pork and beef in major countries in 2020

will be 7% below pre-ASF levels and because of biological constraints this

shortfall is largely a fixed number.


#7 Demand in US Domestic MarketConsumer Confidence Bolstered by Strong Balance Sheets

All-Transactions House Price IndexIndex 1980: Q1 = 100. Quarterly. Not Seasonally Adjusted

270

290

310

330

350

370

390

410

430

450

470

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

- 54 -

S&P 500 IndexData updated through: October 10, 2019

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


#7 Demand in US Domestic MarketRobust job market underpins beef demand

55

0.00

2.00

4.00

6.00

8.00

10.00

12.00

percent

USA UNEMPLOYMENT RATE: %

Sep 20193.5%

Dec 2020 Forecast

3.8%

95.0

96.0

97.0

98.0

99.0

100.0

101.0

102.0

103.0

104.0

-900

-720

-540

-360

-180

0

180

360

540

720

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

NRA Restaurant Performance Index vs. Monthly Job Gains/Losses Rest.index

JobGains

monthly job gains/losses (L)

restaurant index (R)


#7 Demand in US Domestic Market

Demand Drivers: Income

- 56 -

45721

30,000

32,000

34,000

36,000

38,000

40,000

42,000

44,000

46,000

48,000

2000 '01 '02 '03 '04 2005 '06 '07 '08 '09 2010 '11 '12 '13 '14 2015 '16 '17 '18 '19

Real Per Capita Disposable Income, US$Latest data is for: August 2019

recession


#7 Demand in US Domestic MarketUSA Per Capita Meat Protein Consumption

- 57 -

200

210

220

230

240

250

260

270

280

290

19

71

19

73

19

75

19

77

19

79

19

81

19

83

19

85

19

87

19

89

19

91

19

93

19

95

19

97

19

99

20

01

20

03

20

05

20

07

20

09

20

11

20

13

20

15

20

17

PO

UN

DS P

ER P

ERSO

N P

ER Y

EA

R

TOTAL BEEF, PORK, POULTRY PER CAPITA DISAPPERANCE(Carcass Wt. Basis)

20

19

20

20

20

21

Forecast

270.4273.2

269.9


#7 Demand in US Domestic MarketUSA Per Capita Beef Consumption

- 58 -

60

70

80

90

100

110

120

130

19

71

19

73

19

75

19

77

19

79

19

81

19

83

19

85

19

87

19

89

19

91

19

93

19

95

19

97

19

99

20

01

20

03

20

05

20

07

20

09

20

11

20

13

20

15

20

17

PO

UN

DS P

ER P

ERSO

N P

ER Y

EA

R

BEEF PER CAPITA DISAPPERANCE (Carcass wt. Basis)

20

18

20

19

20

20

Forecast

82.3 80.879.3


#7 Demand in US Domestic MarketUSA Per Capita Lamb Consumption

- 59 -

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

19

71

19

73

19

75

19

77

19

79

19

81

19

83

19

85

19

87

19

89

19

91

19

93

19

95

19

97

19

99

20

01

20

03

20

05

20

07

20

09

20

11

20

13

20

15

20

17

PO

UN

DS P

ER P

ERSO

N P

ER Y

EA

R

LAMB, PER CAPITA CONSUMPTION (Carcass wt. Basis)

1.18 1.18 1.18

2019

2020

2021

Forecast


#8 Competing Proteins – Plant Based Protein

- 60 -

239.71

87.01

-64%


#8 Competing ProteinsPork Situation and Outlook

Supplies ( Y/Y % change)

Production: +5.1% in 2019

+3.0% in 2020

+1.5% in 2021

Exports: +8.9% in 2019

+16.2% in 2020

+3.4% in 2021

Per Capita: +2.6% in 2019

-1.5% in 2020

+0.7% in 2021

ESNR9EP

22,843

26,315

27,653

28,478 28,912

15,000

17,000

19,000

21,000

23,000

25,000

27,000

29,000

31,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

PORK PRODUCTION: MILLION POUNDS


#8 Competing ProteinsRatio of Beef Cutout vs. Pork Cutout

Beef Price Continues to Gain on PorkRatio of Weekly Choice Beef Cutout vs. Pork Cutout Value

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020


#8 Competing ProteinsPrice Ratio of Ground Beef vs. Pork Chops

- 63 -

0.50

2.00

-

0.50

1.00

1.50

2.00

2.50

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

Ratio

Ratio: 78CL Meat Block /1/4" Pork Loins, USDA Wt Avg

52wk Mo. Avg.

2009-10 Avg = 1.22


#8 Competing Proteins

Long Run Price of B/S Chicken Breasts

- 64 -

60

110

160

210

260

310

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

LONG TERM PRICE CHART: 1990 -2019$/cwt

Price History and Forecast for B/S Chicken Breast Price. USDA-AMS. $/cwt


#8 Competing ProteinsBroiler Situation and Outlook

1.88

4.719

6.831

0.669

14.099

42,96443,594

43,939

30,000

32,000

34,000

36,000

38,000

40,000

42,000

44,000

46,000

20082009201020112012201320142015201620172018201920202021

MILLIO

N P

OU

ND

S

BROILER PRODUCTION: MILLION POUNDS

- 65 -

Forecast Source: Steiner Consulting Group

Supplies ( Y/Y % change)

Production: +1.9% in 2019

+1.5% in 2020

+0.8% in 2021

Exports: +2.4% in 2019

+6.4% in 2020

+2.2% in 2021

Per Capita: +1.2% in 2019

+0.2% in 2020

+0.1% in 2021


#8 Competing ProteinsGround Beef vs. Chicken Breasts

- 66 -

Forecast Source: Steiner Consulting Group78CL Meat Block = 70% 90CL Boneless Beef, Central, Fresh, USDA, Wt. Avg. + 30% 50CL Beef Trim, Fresh, National, USDA, Wt. Avg.

Chicken Breast = USDA N.E. Broiler Breast Boneless, Skinless, Wt. Avg.

1.68

-

0.50

1.00

1.50

2.00

2.501

990

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

Ratio

Ratio: 78CL Meat Block (Using Dom 90LC and 50CL) /Bnls Skinless Chicken Breast

52wk Mo. Avg.


#8 Competing Proteins

Broiler Supplies

- 67 -

59.4

57.3

-2.1

51500

53000

0.029126255,063

57,403

59,717

59,892

50,000

52,000

54,000

56,000

58,000

60,000

62,000


LAYERS ON 1ST OF MONTH: BROILER TYPE HATCHING'000

2017

2018

2016

5-Yr. Avg.

Source: USDA/NASS Chicken and Eggs Monthly Report

2019

US WEEKLY BROILER EGG SETS Source: USDA Broiler Hatchery Report

185,000

195,000

205,000

215,000

225,000

235,000

245,000


5 Yr. Avg (2012-16) 2018 2019

1000 eggs


#9 USA Lamb/Mutton/Goat Market SituationUS Lamb Inventories Remain Flat

- 68 -

0

2,000

4,000

6,000

8,000

10,000

12,000

US LAMB INVENTORYmil head


#9 USA Lamb/Mutton/Goat Market SituationLower Weights Have Limited US Domestic Supplies

- 69 -

Weekly USA Lamb & Sheep Slaughter'000 Head/Week. Source: USDA. Compiled and Analysis by Steiner Consulting

26.0

31.0

36.0

41.0

46.0

51.0


5-Yr 2018 2019

Weekly USA Lamb Dressed Weights'000 Head/Week. Source: USDA. Compiled and Analysis by Steiner Consulting

59.0

61.0

63.0

65.0

67.0

69.0

71.0

73.0

75.0

77.0


5-Yr 2018 2019


#9 USA Lamb/Mutton/Goat Market SituationDomestic Lamb Prices Above Year Ago This Fall

Slaughter Lamb Price, Sioux Falls, SD BasisMonthly Average Prices, 90-115 lb., $ per 100 lb.

100

110

120

130

140

150

160

170

180


5-Yr. Avg. 2018 2019


#9 USA Lamb/Mutton/Goat Market Situation

Imported Racks Remain Very Firm

- 71 -

Australian Lamb Racks, Fresh, Cap-off, 28 oz/up. 4-WK Moving Avg.Weekly Prices. Source: USDA

700

800

900

1,000

1,100

1,200

1,300


2019 2018 2017 2016


#9 USA Lamb/Mutton/Goat Market SituationLamb Imports Share Continues to Expand. 2019 Share @63.4%

- 72 -

267

154

421

0

50

100

150

200

250

300

350

400

450

500

Domestic Lamb Production + Importsmil lb.

US domestic production

Imports


#9 USA Lamb/Mutton/Goat Market Situation

Trade Flows so Far in 2019

- 73 -

Quantity of US Imports of Fr/Frz Mutton, Goat, Lamb: World TotalSource: USDA/FAS. Units: Metric Ton. Analysis by: Steiner Consulting (800.526.4612)

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

5-Yr Avg 2017 2018 2019


CURRENT FORECAST


Price Forecasts: 2019 and 2020

- 75 -

Close on

Oct 25,

2019 Q1 Q2 Q3 Q4 Annual

LIVE STEERS

FIVE AREA DIRECT AVERAGE LIVE STEER

5-YR AVERAGE 2014-18 137.69 136.57 127.90 125.68 131.96

2018 HISTORY 125.42 116.36 110.11 114.41 116.57

2019 HISTORY 109.75 125.33 119.99 108.26

2019 FORECAST 114.76 117.08

% CHANGE FROM 2017 -0.1% 3.1% -1.7% 0.3% 0.4%

% CHANGE FROM 5-Yr Avg. -9.0% -12.1% -15.4% -8.7% -11.3%

2020 FORECAST 125.67 124.00 120.67 126.67 124.25

% CHANGE FROM 2018 0.3% 3.3% 11.5% 10.4% 6.1%

% CHANGE FROM 5-Yr Avg. -8.7% -9.2% -5.7% 0.8% -5.8%

90% BONELESS BEEF, CENTRAL, FRESH, WT. AVG., USDA

5-YR AVERAGE 2014-18 233.80 240.87 245.38 221.50 235.38

2018 HISTORY 215.22 219.22 209.84 192.20 209.12

2019 HISTORY 219.93 209.65 221.77 223.06

2019 FORECAST 227.57 220.51

% CHANGE FROM 2018 -2.6% 1.2% 6.3% 18.4% 5.4%


2020 FORECAST 246.33 251.33 255.00 243.33 249.00

% CHANGE FROM 2019 17.5% 13.3% 14.3% 6.9% 12.9%

% CHANGE FROM 5-Yr Avg. 5.4% 4.3% 3.9% 9.9% 5.8%


Price Forecasts: 2019 and 2020Close on

Oct 25,


50CL BEEF TRIM, FRESH, OMAHA BASIS, WT.AVE, USDA

5-YR AVERAGE 2014-18 89.89 102.19 77.82 62.79 83.17

2018 HISTORY 82.38 82.29 67.32 59.22 72.80

2019 HISTORY 65.17 68.14 88.29 82.53

2019 FORECAST 63.38 75.58

% CHANGE FROM 2018 -17.3% 7.3% 22.6% 7.0% 3.8%

% CHANGE FROM 5-Yr Avg. -24.2% -13.6% 6.0% 1.0% -9.1%

2020 FORECAST 90.33 101.67 80.00 71.00 85.75

% CHANGE FROM 2019 32.6% 15.2% -3.1% 12.0% 13.4%

% CHANGE FROM 5-Yr Avg. 0.5% -0.5% 2.8% 13.1% 3.1%

7:45, E. COAST 90CL AUSTRALIAN BLENDED COW, TOP, YELLOW SHEET

5-YR AVERAGE 2014-18 217.86 219.19 231.47 219.91 222.11

2018 HISTORY 217.42 209.69 200.61 183.61 202.83

2019 HISTORY 254.50 213.02 226.93 228.89

2019 FORECAST 256.45 231.32

% CHANGE FROM 2018 -2.0% 8.2% 14.1% 39.7% 14.0%

% CHANGE FROM 5-Yr Avg. -2.2% 3.5% -1.1% 16.6% 4.1%

2020 FORECAST 263.67 271.33 274.00 262.67 267.92

% CHANGE FROM 2019 23.8% 19.6% 19.7% 2.4% 15.8%


- 76 -



- 77 -

Close on

Oct 25,


CME 1-DAY Cash Hog Index

5-YR AVERAGE 2014-18 72.88 81.62 80.54 66.41 75.36

2018 HISTORY 69.09 67.80 62.66 60.66 65.05

2019 HISTORY 65.49 57.06 80.94 70.69

2019 FORECAST 66.53 68.81

% CHANGE FROM 2018 -17.4% 19.4% 12.8% 9.7% 5.8%


2020 FORECAST 77.33 89.67 87.33 79.33 83.42

% CHANGE FROM 2019 35.5% 10.8% 23.5% 19.3% 21.2%


NEW YORK BROILER WEIGHTED AVERAGE, WTD AVG, USDA

5-YR AVERAGE 2014-18 93.12 105.69 93.15 86.35 94.58

2018 HISTORY 94.16 114.42 97.52 88.25 98.59

2019 HISTORY 78.46 95.54 96.46 82.82

2019 FORECAST 80.30 88.78

% CHANGE FROM 2018 1.5% -15.7% -15.1% -9.0% -9.9%

% CHANGE FROM 5-Yr Avg. 2.6% -8.7% -11.1% -7.0% -6.1%

2020 FORECAST 91.33 105.67 93.00 87.67 94.42

% CHANGE FROM 2019 -4.4% 9.5% 12.3% 9.2% 6.3%

% CHANGE FROM 5-Yr Avg. -1.9% 0.0% -0.2% 1.5% -0.2%



- 78 -

Close on

Oct 25,


USDA, Carcass Pork Cutout, FOB Plant

5-YR AVERAGE 2014-18 82.07 88.56 90.11 80.54 85.32

2018 HISTORY 77.45 74.83 75.00 73.50 75.19

2019 HISTORY 76.15 67.98 83.30 77.34

2019 FORECAST 80.81 77.36

% CHANGE FROM 5-Yr Avg. -12.2% 11.3% 3.1% 9.9% 2.9%

2020 FORECAST -17.2% -5.9% -14.2% 0.3% -9.3%

% CHANGE FROM 2019 87.00 97.33 95.00 96.67 94.00


2021 FORECAST 6.0% 9.9% 5.4% 20.0% 10.2%

CME 1-DAY Cash Hog Index

5-YR AVERAGE 2014-18 72.88 81.62 80.54 66.41 75.36

2018 HISTORY 69.09 67.80 62.66 60.66 65.05

2019 HISTORY 65.49 57.06 80.94 70.69

2019 FORECAST 66.53 68.81

% CHANGE FROM 2017 -17.4% 19.4% 12.8% 9.7% 5.8%


2020 FORECAST 77.33 89.67 87.33 79.33 83.42

% CHANGE FROM 2018 35.5% 10.8% 23.5% 19.3% 21.2%




- 79 -

Close on

Oct 25,


USDA HEN TURKEYS, EAST, FROZEN 8-16LBS, WTD. AVG.

5-YR AVERAGE 2014-18 98.98 102.93 108.17 105.99 104.01

2018 HISTORY 79.20 80.07 82.88 81.17 80.83

2019 HISTORY 96.00 83.23 86.12 91.52

2019 FORECAST 100.32 90.30

% CHANGE FROM 2018 5.1% 7.6% 10.4% 23.6% 11.7%


2020 FORECAST 94.00 94.00 97.00 102.33 96.83

% CHANGE FROM 2019 12.9% 9.2% 6.0% 2.0% 7.2%


USDA TOM TURKEYS, EAST, FROZEN 16-24LBS, WTD. AVG.

5-YR AVERAGE 2014-18 99.27 103.87 107.40 105.58 104.03

2018 HISTORY 81.69 78.46 81.60 79.61 80.34

2019 HISTORY 96.00 82.63 84.55 90.49

2019 FORECAST 97.33 88.75

% CHANGE FROM 2018 1.1% 7.8% 10.9% 22.3% 10.5%


2020 FORECAST 93.00 93.00 96.00 101.33 95.83

% CHANGE FROM 2019 12.6% 10.0% 6.1% 4.1% 8.0%



Live Cattle Prices

70.00

80.00

90.00

100.00

110.00

120.00

130.00

140.00

150.00

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

FIVE AREA DIRECT AVERAGE LIVE STEER

5-YR AVERAGE 2014-18 2018 HISTORY 2019 HISTORY 2019 FORECAST 2020 FORECAST

US$/CWT

- 80 -


US Domestic 90CL Boneless Beef Prices

170.00

190.00

210.00

230.00

250.00

270.00

290.00


90% BONELESS BEEF, CENTRAL, FRESH, WT. AVG., USDA


US$/CWT

- 81 -


US Domestic 50CL Beef Trim

0.00

20.00

40.00

60.00

80.00

100.00

120.00


50CL BEEF TRIM, FRESH, OMAHA BASIS, WT.AVE, USDA


US$/CWT

- 82 -


Imported 90CL Australian Beef

160.00

180.00

200.00

220.00

240.00

260.00

280.00

300.00


7:45, E. COAST 90CL AUSTRALIAN BLENDED COW, TOP, YELLOW SHEET


US$/CWT

- 83 -


Spread, Domestic - Imported

-40.00

-30.00

-20.00

-10.00

0.00

10.00

20.00

30.00


DOMESTIC 90CL FRESH, FOB CENTRAL US MINUS 90CL IMPORTED, FROZEN, FOB US EAST COAST


US$/CWT

- 84 -


Whole Broiler Prices

70.00

80.00

90.00

100.00

110.00

120.00

130.00


N.E. BROILER BREAST BONELESS-SKINLESS, WT.AVG., USDA


US$/CWT

- 85 -

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