USMEF General Session

U.S. Meat Export Federation

Western HemisphereThad Lively

Senior Vice President,Policy, Planning & Research

USMEF’s Staff in the Western Hemisphere Region

•Caribbean–Liz Wunderlich, Caribbean Consultant

•Central & South America–Ricardo Vernazza-Paganini, Director

•Mexico, Dominican Republic & Cuba–Gilberto Lozano, Director

Importance of the Region to U.S. Pork, Beef & Lamb Exports

• The region is a major export market for U.S. pork, beef & lamb today and in the future

• “Good neighbor” policy

• Home to some of our primary competitors

Demographics

• Population of the region is 500 million today and projected to grow to nearly 600 million by 2010

• Population is young – 50% of Mexicans are under the age of 25

• Majority of population lives in urban areas

• More women entering workforce

Political and Economic Situation

• Spreading political and economic stability

• Growing political & economic ties to the U.S. through trade agreements & investment

• Growing modern retail sector

Trade Policy & Market Access Environment

• Trend toward trade liberalization throughout the region

-- FTAs with Mexico, Chile & CAFTA countries

• Politically active producer sectors result in protectionist policies

• Rising importance of Brazil in the WTO

Mexico

Mexico:General Market Situation

• Mexico is currently our second largest export market for pork and our leading export destination for beef.

• Young, rapidly growing population and rising per capita incomes make Mexico a key growth market for the future.

• The U.S. enjoys preferential access to Mexico under NAFTA and benefits from its close proximity to the market.

• Still, we face determined competition, especially from Canada for beef and pork and Chile for pork.

Mexico:Top Priorities for U.S. Pork

• Improve consumer perception of pork in general (health and nutrition) while positioning U.S. pork as a leader.

• Expand the penetration of fresh pork into the market by developing new distribution channels to overcome supply bottlenecks.

• Foster relationships with domestic producers.

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Pork Pork Variet Meats

U.S. Pork Export Forecast Metric Tons (1,000’s)

Mexico:Top Priorities for U.S. Beef

• Develop market for new cuts (not only rounds and variety meats).

• Further educate consumers on food safety and “freshness.”

• Foster relationships with domestic producers.

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Beef Beef Variety Meats

U.S. Beef Export Forecast Metric Tons (1,000’s)

Central/South America

Central & South America:General Market Situation

• Growing populations and steadily increasing per capita incomes result in rising red meat consumption in many countries in the region.

• FTAs give U.S. preferential access to many of the markets in the region.

• But some of our main competitors also are located in the region.

Central & South America:Top Priorities for U.S. Pork

• Focus resources on priority markets in the region

• Build demand for U.S. processed pork items in the upper-end retail segment

• Position pork as an affordable source of protein with consumers in the medium/low socioeconomic group, many of whom have negative perceptions of pork

• Collect and report market intelligence on competitor countries in the region

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Pork Pork Variety Meats

U.S. Pork Export Forecast Metric Tons (1,000’s)

Central & South America:Top Priorities for U.S. Beef

• Focus resources on priority markets in the region

• Build demand for U.S. high quality cuts in the high-end HRI and retail segments

• Identify opportunities for adding value and “de-commoditizing” selected offal items that are exported to the region

• Collect and report market intelligence on competitor countries in the region

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Beef Beef Variety Meats

U.S. Beef Export Forecast Metric Tons (1,000’s)

Caribbean

Caribbean:General Market Situation

• U.S. pork and beef have established a strong market presence in the islands

• Compete in the import market with Canada, Brazil and the EU for pork and with Brazil, Argentina and Australia for beef

• Diversity of the island cultures fosters creative and innovative marketing strategies

• High recognition of U.S. brands throughout the region.

Caribbean:Top Priorities for U.S. Pork

• Support the introduction of U.S. brands

• Build demand for value-added items and boutique pork (e.g., Kurobuta)

• Develop the market for specialty and non-traditional cuts

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U.S. Pork Export Forecast Metric Tons (1,000’s)

Caribbean:Top Priorities for U.S. Beef

• Support the introduction of U.S. brands

• Build demand for underutilized cuts and value-added items

• Develop market for portion control cuts

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Beef Beef Variety Meats

U.S. Beef Export Forecast Metric Tons (1,000’s)

Market Priorities and/or Areas for Greatest Growth for U.S. Pork

• Favorable quota allocation gives good potential for growth of US pork exports to Russia

• The improving economy expands opportunities for US enhanced pork in the HRI sector

• Demand for high-quality US pork exists in the growing retail sector 0

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U.S. Pork Export Forecast Metric Tons (1,000’s)

Market Priorities and/or Areas for Greatest Growth for U.S. Beef

• The trade are waiting for the ban to be lifted

• No replacement for quantity and quality of US beef variety meats

• US high quality beef will quickly regain its premium niche in the HRI sector

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U.S. Beef Export Forecast Metric Tons (1,000’s)