export opportunities
DESCRIPTION
EXPORT OPPORTUNITIES. WHERE TO GO AND WHAT TO AVOID. MODERATOR Janie Gabbett Executive Editor, Meatingplace. Opportunities for Exporting Beef & Pork. Erin Borror Economist for the U.S. Meat Export Federation. Longer Term Pork Export Trends. - PowerPoint PPT PresentationTRANSCRIPT
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
Source: USDA/FAS Fall PS&D, Carcass weight equivalent
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.
Source: Global Trade Atlas
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
Source: USDA/FAS Fall PS&D, Carcass weight equivalent
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
Source: Global Trade Atlas
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
Source: Global Trade Atlas
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
Source: USDA/FAS Fall PS&D, Carcass weight equivalent
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
Source: Global Trade Atlas
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
Source: USDA/FAS Fall PS&D, Carcass weight equivalent
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
Source: Global Trade Atlas
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
Source: Global Trade Atlas
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
Source: USDA/FAS Fall PS&D, Carcass weight equivalent
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
Source: USDA/FAS Fall PS&D, Carcass weight equivalent
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
Source: Global Trade Atlas
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
Quantity (left axis) Value (right axis)
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
Quantity (left axis) Value (right axis)
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]
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