Global Industry Perspective Greg Tyler, Vice President of Marketing USA Poultry & Egg Export Council UNECE Meetings Atlanta, Georgia April 24 th, 2012
USAPEEC & its Mission The USA Poultry & Egg Export Council (USAPEEC) is a non-profit trade association whose members account for more than 95% of all U.S. poultry and egg exports. USAPEEC exists for the purpose of increasing U.S. poultry & egg exports by protecting, opening and developing markets throughout the world and by serving as the industry s voice on trade policy issues.
USAPEEC s Global Network
USAPEEC Locations Based in Stone Mountain, Georgia, USAPEEC has 14 international offices in major export markets: Mexico City Monterrey Hong Kong Singapore Moscow Beijing Central Asia Shanghai Tokyo Seoul Middle East South Africa Europe Latin America/Caribbean
It s tough making poultry sexy. But we do our best!!!
BAHRAIN KOREA JAPAN PANAMA THAILAND
KOREA MEXICO PHILIPPINES MALDIVES KAZAKHSTAN
JAPAN MEXICO HONG KONG JORDAN
VIETNAM SINGAPORE RUSSIA YEMEN YEMEN
WORLD DEMAND FOR BROILER MEAT Billion 8 7 6 5 4 3 2 1 0 World population (left axis) 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011(e) Per capita consumption (right axis) 12 10 8 6 4 2 0 kilogram Global demand for broiler meat has continued to rise as both population and per capita consumption increase. Source: USDA and U.S. Census Bureau
Top Poultry Producers in the World 40% 35% 30% 25% 22.4% 2007 2008 2009 2010 2011 30.1% 20% 15% 15.6% 15.3% 13.2% 10% 5% 0% United States 3.4% Brazil China EU-27 Mexico ROW Source: USDA/FAS
Top Chicken Exporters in the World (In 1,000 metric tons) 4,000 3,500 3,750 3,547 2008 3,000 2009 2,500 2,000 1,500 1,000 500 1,121 2010 2011 467 423 269 143 90 1,421 0 Brazil USA EU27 Thailand China Argentina Canada Chile ROW Source: Global Trade Atlas
Top Poultry Consumers in the World (2011) USA 18.0 16.0 16.2 China Brazil million tons 14.0 12.0 10.0 8.0 6.0 13.1 11.0 EU-27 Mexico Russia India Japan Iran 4.0 South Africa 2.0 Argentina 0.0 Saudi Arabia Source: USDA/FAS
Per Capita Broiler Consumption Varies Significantly across the Countries (2010) Brazil 50 45.4 43.6 USA Argentina 40 South Africa Mexico Kilograms 30 20 10 9.2 6.0 2.2 Iran Russia EU-27 Japan China Indonesia 0 India Source: USDA/FAS
2011 Broiler Exports to Set Record in Value 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Quantity (left axis, million tons) Value (right axis, billion US$) $4.5 $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 2004 2005 2006 2007 2008 2009 2010 2011 (e) 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 An average annual increase of 9.8% in volume and 9.6% in value during 1991-2010. Source: USDA/FAS
Share of U.S. Broiler Production Exported 30% 25% 20% 15% 21.7% 21.0% 19.8% 10% 5% 0% 3.1% 6.0% 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 ROW 36.1% Russia 20.5% ROW 52.6% Hong Kong 16.4% Cuba 4.1% = Mexico 13.2% Iraq 4.5% Hong Kong 4.6% 2009 Mexico 10.4% China 19.9% Iraq 4.0% Canada 4.0% 2011 Angola 4.7% Russia 5.1% Broiler exports in 2011 are expected to set record in value this year, despite the major losses in China and Russia.
Top Turkey Exporters in the World 1,000 MT 400 350 300 250 200 150 100 50 0 2008 319 2009 2010 2011 147 141 22 21 8 USA Brazil EU-27 Canada Chile ROW Source: Global Trade Atlas
2011 Turkey Exports Set Record 700 600 500 Quantity (left axis) Value (right axis) $481 $600 $700 $600 $500 1,000 MT 400 300 200 306 319 $400 $300 $200 million US$ 100 $100 0 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 An average annual growth of 4.2% in volume and 9.3% in value in 2000-2011. Source: USDA/FAS
Share of Turkey Production Exported 15% 12% 11.8% 11.0% 9% 9.6% 10.6% 6% 3% 0% 0.9% 1.6% 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011(e) Source: USDA/FAS
Top U.S. Turkey Export Markets (In 1,000 metric tons) 250 225 200 175 150 125 100 75 50 25 0 181.0 37.6 17.2 2008 2009 2010 2011 10.3 6.9 Mexico China Hong Kong Canada Dominican Republic ROW 66.0 Source: USDA/FAS
300 250 200 150 100 50 0 2011 Egg Exports To Set New Record in Value Quantity (left axis) Value (right axis) 300 250 200 150 100 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011(e) million dozen million U.S. dollars Note: include table eggs and egg products in shell egg equivalent. 50 0 Source: USDA/FAS
Share of Table Egg Production Exported 5.0% 4.0% 3.0% 2.0% 3.1% 3.0% 1.0% 0.0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: USDA
Top Table Egg Export Markets (share of export volume) 60% 50% 40% 30% 20% 10% 0% 2007 45.9% 2008 2009 2010 Jan - Sep 2011 20.2% 18.0% 12.7% 1.7% 1.6% Hong Kong Canada UAE Bahamas Israel ROW Source: USDA/FAS
Top Egg Product Export Markets (share of export value) 60% 50% 52.9% 2007 2008 40% 2009 30% 20% 18.6% 2010 Jan - Sep 2011 16.8% 10% 0% 6.0% 1.7% Japan EU-27 Canada Mexico South Korea 4.1% ROW Source: USDA/FAS
U.S. Poultry & Egg Export Value (In million U.S. dollars) $6,000 $5,000 $4,000 T able egg & egg products Other poultry Turkey Value Broiler Value $3,000 $2,000 2006 2007 2008 2009 2010 2011(e) $1,000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 $0 Total export value in 2011 is expected to reach 5.2 billion, up 19% from last year Source: USDA/FAS
World Broiler Net Exports in the Next Decade 12.0 11.0 10.4 million tons 10.0 9.0 8.0 7.0 6.0 5.0 8.1 10.2 Net exports is expected to increase at an average rate of 3.0 percent throughout 2020. 4.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: FAPRI
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. 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
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 costinefficient in halal production have dissuaded U.S. poultry processors from selling products to those markets.
Importance of Trade Descriptions to the Industry The trade standard creates better communication between buyer and seller as to product and packaging specifications for raw poultry products. The trade descriptions provide concise word and picture descriptions of product composition and define a coding system to precisely specify product and packaging characteristics. This will help to greatly reduce disputes between interested parties.
Possible Problem Areas and Miscues. Pack Style: The arrangement of product in a package or shipping container Bulk Pack Layer Pack Regular Layer Pack Honeycomb Soldier pack Flat pack
Possible Problem Areas and Miscues. Slaughter System Traditional Kosher Halal Other
Possible Problem Areas and Miscues. Production and Feeding Systems (Prod/Feed) Traditional Production and Diet Free-Range Production with Traditional Diet Pastured/Pasture-Raised Production with Traditional Diet Traditional Production with Organic and/or Antibiotic-Free Systems Free-Range Production with Organic and/or Antibiotic-Free Systems Pastured Production with Organic and/or Antibiotic-Free Systems Other
Conclusions The prolonged economic downturn leads to weak market demand. High feed and energy cost, combined with depressed sales, have put many poultry companys in an unprofitable situation. Animal diseases such as AI impact trade. Religious barriers are often encountered in predominately-muslim countries. For example, entry to Malaysia, Indonesia, and Saudi Arabia must meet the halal regulations. Trade barriers in major export markets:
Conclusions 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 Do a better job delivering our positive message to consumers and government. Support trade based on sound science, not political science.
Greg D. Tyler Vice President of Marketing USA Poultry & Egg Export Council www.usapeec.org e-mail: gtyler@usapeec.org