Brett Stuart, Global AgriTrends, 2015 Pork Management Conference, June 16-19 in New Orleans.

1. June 17, 2015
Brett Stuart
Global Demand
and Outlook for
U.S. Pork
NPB Pork Management
Conference

2. Outline
• Global Protein & Pork
• U.S. Pork Challenges and Opportunities
• Forecasts

3. Global Protein & Pork
Protein Supply, Demand, Prices
Global Protein Shifts

4. Source: USDA/FAS

5. Source: USDA/FAS
0
20
40
60
80
100
120
Beef Pork Broiler
MMT Global Meat and Broiler Production
2006-2015F

6. 2015 IS NOT 2014
Mood and Money
• Does crude matter?
• Petro-economies as importers (Africa and
Middle East nations)
Competing Meats
• PEDv a non-issue, ABUNDANT pork & poultry
• Poultry breeding flock expansion
• Strong dollar pulling imports/hindering
exports
• HPAI

7. Global HPAI

8. U.S. HPAI
• 45+ million birds affected
– 3% of turkeys, 11% of layers, <.0001% of broilers
• Virus now coming under control
– Assisted by warmer temps
– But what about fall/winter (when birds fly south)
• But trade bans are problematic
– China (and lesser others) banned all U.S. poultry
– Roughly 40+ others banning states, or counties
– MEXICO: allowing U.S. poultry for processing
– Estimated 17% of 2014 broiler export access now
closed

9. Source: Urner Barry

10. Source: USDA/FAS

11. Source: GTIS, AgriTrends
Petro Economies: Russia, Saudi Arabia, Angola, Venezuela, United Arab
Emirates, Iraq, Kuwait, Qatar, Iran, Algeria, Kazakhstan, Niger

12. Source: USDA/FAS, AgriTrends 2015 forecasts

13. 0.0
0.5
1.0
1.5
2.0
2.5
MillionMetricTons
Global Pork Imports
China+Hong Kong
Japan
Mexico
U.S.
Russia
S. Korea
Source: GTIS, AgriTrends

14. Source: USDA/FAS

15. U.S. Pork Challenges and
Opportunities
Supply/Demand
Export Challenges: US$, EU pork, China
Export Opportunities: China, Africa,
Competitive pricing?

16. Source: USDA, AgriTrends 2015 export forecast

17. Source: USDA/ERS, YTD through April 2015

18. Source: Pacific Exchange, AgriTrends

19. Source: Pacific Exchange, AgriTrends

20. Source: BPEX, USDA

21. Source: BPEX, USDA

22. Source: World Pork Import Report, Feb. 28, 2015, GTIS,

23. The Dilemma
• Ractopamine is an FDA-approved and Codex
recommended compound that adds $2-
4/head benefit for pork producers ($220-440
million/year)
• China is the largest and potentially largest
pork export market on earth with enormous
market diversity and opportunities
• China has a zero-tolerance for ractopamine
residues

24. Even more complicated by…
• An impending pork gap is building in China as
as many as 9 million sows have been
liquidated over the past 19 months
• Prices will rise, import demand will surge
• Remember 2008/2011
– China/HK bought 6% of our entire pork production
for 4 months in the fall of 2011
– U.S. prices surged
• U.S. pork production is up +7% YTD; forecast
+6% for 2015

25. Source: China Ministry of Agriculture (calculated based on y/y percentage
changes by AgriTrends)

26. Source: Average of various Chinese market reports

27. U.S. Pork to China
The China Pork Paradox:
Forego the largest pork market on earth, or
bow to non-scientific barriers that reduce U.S.
competitiveness
• This is a “theoretical debate”
• Is the customer always right?
• Is this a “slippery slope”?
• Are we entering a new phase of “customer-
driven trade policy”?

28. Source: GTIS, AgriTrends

29. Source: USDA, AgriTrends forecasts
2014: $450 million

30. Source: GTIS, AgriTrends

31. Forecasts

32. Source: USDA, AgriTrends forecasts

33. Source: USDA, AgriTrends forecasts

34. Outlook
With larger domestic production, and export
challenges, EXPORTS HINGE ON:
• CHINA: Will the U.S. have meaningful access,
and if not, how much EU pork will be pulled
away from Japan, Korea, and others?
and
• RUSSIA: Will EU pork be allowed (ASF ban)?
And will the food import ban be lifted (main
impact – Canada)?

35. Trade Policy Acronyms
• MCOOL
– The clock is ticking…
• TPA: Trade Promotion Authority
– TAA: Trade Adjustment Assistance – precursor
needed, next step, by end of July?
• TPP: Trans Pacific Partnership
– Will progress quickly once TPA is granted
– Could be HUGE for U.S. pork longer term

36. Denver, Colorado
36
Services Offered:
• Global market research
• Specific market reports
• Email alerts/analysis
• Monthly newsletter
• Webinars / presentations
Brett Stuart
bstuart@globalagritrends.com
303-803-8716
www.globalagritrends.com
Get plugged in!