brazilian beef

BRAZILIAN BEEFBRAZILIAN BEEFBRAZILIAN BEEFBRAZILIAN BEEFProfileProfileProfileProfile

A INDÚSTRIA DA CARNE

Cattle herd 195 million

Anual slaughtering 44 million

Industrial units 1.100 plants

Cattle herd 195 million

Anual slaughtering 44 million

Industrial units 1.100 plants

Overview on Brazilian Overview on Brazilian Overview on Brazilian Overview on Brazilian Beef IndustryBeef IndustryBeef IndustryBeef Industry

BrazilianBrazilianBrazilianBrazilianEnvironmentEnvironmentEnvironmentEnvironment

Amazon: 84,98%

Caatinga: 62,76%

Cerrado: 60,41%

Pantanal: 86,77%

Atlantic For.: 26,77%

Pampas: 41,36%

Remaining area of original forests in Europe: 0,3%

Remaining Areas of Remaining Areas of Remaining Areas of Remaining Areas of Original Biomes in BrazilOriginal Biomes in BrazilOriginal Biomes in BrazilOriginal Biomes in Brazil

Livestock per MunicipalityLivestock per MunicipalityLivestock per MunicipalityLivestock per Municipality

Production CostsProduction CostsProduction CostsProduction CostsUS$ per 100kg carcass weightUS$ per 100kg carcass weightUS$ per 100kg carcass weightUS$ per 100kg carcass weight

Carro de boi, interior de SP

1916

Livestock per MunicipalityLivestock per MunicipalityLivestock per MunicipalityLivestock per Municipality

Brazilian Livestock per Region %Brazilian Livestock per Region %Brazilian Livestock per Region %Brazilian Livestock per Region %

Livestock 1974:Livestock 1974:Livestock 1974:Livestock 1974: +/+/+/+/---- 100 million100 million100 million100 million2008:2008:2008:2008: +/+/+/+/---- 200 million200 million200 million200 million

BrazilBrazilBrazilBrazil’’’’s Rains Rains Rains RainSeasonsSeasonsSeasonsSeasons

80% 20% 80%

Green mass production in tropical weatherGreen mass production in tropical weatherGreen mass production in tropical weatherGreen mass production in tropical weather

Animal Production onAnimal Production onAnimal Production onAnimal Production onIntensified SystemsIntensified SystemsIntensified SystemsIntensified Systems

55,00

60,00

65,00

70,00

75,00

80,00

85,00

90,00

95,00

100,00

ab

r/9

6

ou

t/9

6

ab

r/9

7

ou

t/9

7

ab

r/9

8

ou

t/9

8

ab

r/9

9

ou

t/9

9

ab

r/0

0

ou

t/0

0

ab

r/0

1

ou

t/0

1

ab

r/0

2

ou

t/0

2

ab

r/0

3

ou

t/0

3

ab

r/0

4

ou

t/0

4

ab

r/0

5

ou

t/0

5

ab

r/0

6

ou

t/0

6

ab

r/0

7

ou

t/0

7

ab

r/0

8

ou

t/0

8

ab

r/0

9

ou

t/0

9

Boi gordo em R$/@ corrigidos pelo IGP-DI em SP a partir de 1996

Fonte: Scot Consultoria – www.scotconsultoria.com.br - twitter.com/scotconsultoria

Anos de preços altos Anos de preços baixos

Livestock price cycleLivestock price cycleLivestock price cycleLivestock price cycle

Brazilian Beef ProductionBrazilian Beef ProductionBrazilian Beef ProductionBrazilian Beef Production

-

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

10.000

Série1 5.200 5.400 6.045 5.820 6.040 6.270 6.650 6.900 7.300 7.700 8.350 8.776 9.053 9.297 9.000 9.180

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008* 2009**

Thousand TON CWE

Source: CNPC

Beef Trade Flows 90Beef Trade Flows 90Beef Trade Flows 90Beef Trade Flows 90’’’’ssss

Beef ExportsBeef ExportsBeef ExportsBeef Exports

0,0

0,5

1,0

1,5

2,0

2,5

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Brazil

Australia

USAArgentina

Canada

UE-27

Millions TON CWE

Source: USDA

Beef Trade Flows 00Beef Trade Flows 00Beef Trade Flows 00Beef Trade Flows 00’’’’ssss

Brazilian Beef ExportsBrazilian Beef ExportsBrazilian Beef ExportsBrazilian Beef ExportsUSD MillionUSD MillionUSD MillionUSD Million

1.590

2.5253.060

3.9244.425

5.325

4.116

0

1.000

2.000

3.000

4.000

5.000

6.000

2003 2004 2005 2006 2007 2008 2009

Product 2003 2004 2005 2006 2007 2008 2009FRESH BEEF 1.155 1.963 2.419 3.135 3.486 4.006 3.022

PROCESSED 338 447 525 654 694 853 649

OTHERS 97 115 116 135 245 466 445

TOTAL 1.590 2.525 3.060 3.924 4.425 5.325 4.116

+ 28%+ 20% - 24%

Source: MDIC

Brazilian Beef ExportsBrazilian Beef ExportsBrazilian Beef ExportsBrazilian Beef ExportsFresh 2009 Fresh 2009 Fresh 2009 Fresh 2009

US$ 3.022.566.000US$ 3.022.566.000US$ 3.022.566.000US$ 3.022.566.000

Source: MDIC

LEBANON 3%

ITALY118.544

4% ALGERIA141.774

5%

VENEZUELA 164.934

5%

EGYPT200.122

7%

HONG KONG 316.214

10%

IRAN335.352

11%

NETHERLANDS 3%

SAUDI ARABIA 3%

RUSSIA 910.651

31%

OTHER 18%

Source: MDIC

USA223.148

34%

JORDAN2%

PUERTO RICO2%

UK157.555

24%

ITALY35.548

5%

NETHERLANDS33.355

5%

GERMANY23.967

4%

JAPAN16.558

3%

BELGIUM2%

FRANCE2%

OTHER17%

Brazilian Beef ExportsBrazilian Beef ExportsBrazilian Beef ExportsBrazilian Beef ExportsProcessed 2009 Processed 2009 Processed 2009 Processed 2009

US$ 649.072.000US$ 649.072.000US$ 649.072.000US$ 649.072.000

Financial Crisis ImpactFinancial Crisis ImpactFinancial Crisis ImpactFinancial Crisis Impact

Main markets of Fresh Beef EvolutionMain markets of Fresh Beef EvolutionMain markets of Fresh Beef EvolutionMain markets of Fresh Beef Evolution

000 US$000 US$000 US$000 US$

Source: MDIC

0

25.000

50.000

75.000

100.000

125.000

150.000

175.000

200.000

225.000

ago/08 set/08 out/08 nov/08 dez/08 jan/09 fev/09 mar/09 abr/09 mai/09 jun/09 jul/09 ago/09

000

US

D

Russia Hong Kong Egypt Iran Venezuela

Financial Crisis ImpactFinancial Crisis ImpactFinancial Crisis ImpactFinancial Crisis ImpactTrendsTrendsTrendsTrends

Fusions and AcquisitionsFusions and AcquisitionsFusions and AcquisitionsFusions and Acquisitions

+ Merger - may/2009 6% of bovine slaughter in 2008;

Merger - sept/2009 25% of bovine slaughter in 2008;

Acquisition - sept/2009 Chicken division;

Renting of 11 slaughterhouses -set/2009 increased capacity of 8.800 heads/day;

R

Selected Brazilian Beef

+

+

+ :

:

Financial Crisis ImpactFinancial Crisis ImpactFinancial Crisis ImpactFinancial Crisis ImpactTrendsTrendsTrendsTrends

InternacionalizationInternacionalizationInternacionalizationInternacionalization

Argentina: Swift

USA: Swift and Co., National Beef Packers, Smithfield

Foods, Pilgrim’s Pride (chicken);

Australia: Swift, Tasman, Tatiara Meat

Europe: Inalca

Uruguay: Canelones

Paraguay: Quality Meat and San Antonio

Argentina: AB&P, Estancias del Sur, Quickfood, Best Beef, Mirab

Uruguay: Tacuarembó, Inaler, Colonia

Chile: Quinto Cuarto, Patagonia

UK: CDB Meats, Weston, Kitchen Ham Packers

Northern Ireland:Moy Park, Dungannon Protein

Netherlands: Albert van Zoonen

France: Moy Park France

R

Selected Brazilian Beef

:

Trends in the Beef Production: Trends in the Beef Production: Trends in the Beef Production: Trends in the Beef Production: AssociationsAssociationsAssociationsAssociations

• In 2007 the world’s urban population surpassed the rural population

• In 2050, the world population will be of

about 9 billion people (UN)

• In 2014, the GDP of developing

countries will surpass the GDP of developed countries (IMF)

•In 2009, about 1 billion people were

living in some degree of subnutrition

(FAO)

Future PerspectivesFuture PerspectivesFuture PerspectivesFuture Perspectives

The State of Food and The State of Food and The State of Food and The State of Food and AgricultureAgricultureAgricultureAgriculture

“Food production must expand by 70% in the world and double in developing countries, tomeet the food needs of a world population expected to reach 9.1 billion in 2050.”

Dr Jacques DioufFAO Director-General

Meat Consumption and GDPMeat Consumption and GDPMeat Consumption and GDPMeat Consumption and GDP

Future ChallengesFuture ChallengesFuture ChallengesFuture Challenges

PoliticalOpening new markets

Negotiations at OMC Protectionism

SanitaryFoot and Mouth Disease

BSETraceability

EconomicExchange rates

EnvironmentalGreenhouse gases emissions Deforestation

Sustainability in beef production

Free zone without vaccination (Santa Catarina)

Free zone with vaccination

Alert Zone

Not free zone

FMD Map 2009FMD Map 2009FMD Map 2009FMD Map 2009

INDUSTRIA

ENGORDA

CRIA

CMERCADO

RECRIA

CMERCADO

FEED LOT

TraceabilityTraceabilityTraceabilityTraceability

2005 2006 2007 2008 2009 2010

Exchange RateExchange RateExchange RateExchange RateR$ x US$R$ x US$R$ x US$R$ x US$2005200520052005----2010201020102010

DeforestationDeforestationDeforestationDeforestation

Productivity EvolutionProductivity EvolutionProductivity EvolutionProductivity Evolution

Livestock X Pasture area

0

20.000.000

40.000.000

60.000.000

80.000.000

100.000.000

120.000.000

140.000.000

160.000.000

180.000.000

1940 1950 1960 1970 1975 1980 1985 1996 2006

(hea

ds)

0

20.000.000

40.000.000

60.000.000

80.000.000

100.000.000

120.000.000

140.000.000

160.000.000

180.000.000

200.000.000

(ha)

Livestock Pasture

Source: IBGE, Mapa

Greenhouse Gases EmissionsGreenhouse Gases EmissionsGreenhouse Gases EmissionsGreenhouse Gases Emissions

Reduction on CH4 emissions between 1988 and 2007% of emissions reduction of CH4/kg of beef

Source: FMVZ

Artificial insemination

Salt

MineralSalt

Fertilization

Irrigation

Rotational Pasturesystem

CrossbreedingGenetic

selection

Electronic tag

Feedlot

IntegrationBreedingAgricultureForest

Protein supplement

Pasture management

Medication

TECHNOLOGYTECHNOLOGYTECHNOLOGYTECHNOLOGYAND BEEF AND BEEF AND BEEF AND BEEF

PRODUCTIONPRODUCTIONPRODUCTIONPRODUCTIONFutures

ProductivityProductivityProductivityProductivity

BRAZILBRAZILBRAZILBRAZIL 1975197519751975 2007200720072007

Meat ProductionMeat ProductionMeat ProductionMeat Production 2,162,162,162,16 7,057,057,057,05 + 227%+ 227%+ 227%+ 227%Million tonMillion tonMillion tonMillion ton

Pasture area Pasture area Pasture area Pasture area 165,63 165,63 165,63 165,63 171,85171,85171,85171,85 + 4%+ 4%+ 4%+ 4%Million haMillion haMillion haMillion ha

WORLDWORLDWORLDWORLD 1975197519751975 2007200720072007

Meat productionMeat productionMeat productionMeat production 43,7343,7343,7343,73 59,8559,8559,8559,85 + 37%+ 37%+ 37%+ 37%Million tonMillion tonMillion tonMillion ton

Pasture area Pasture area Pasture area Pasture area 3.193,323.193,323.193,323.193,32 3.378,17 3.378,17 3.378,17 3.378,17 + 6%+ 6%+ 6%+ 6%Million haMillion haMillion haMillion ha

Source: FAO

ProductivityProductivityProductivityProductivity

Source: IMEA

MATO GROSSOMATO GROSSOMATO GROSSOMATO GROSSO 2000200020002000 2008200820082008

Livestock Livestock Livestock Livestock 18 18 18 18 26262626 + 44,4%+ 44,4%+ 44,4%+ 44,4%Million headsMillion headsMillion headsMillion heads

Pasture area Pasture area Pasture area Pasture area 23,323,323,323,3 25,825,825,825,8 + 10,7%+ 10,7%+ 10,7%+ 10,7%Million haMillion haMillion haMillion ha

OccupationOccupationOccupationOccupation 0,760,760,760,76 0,990,990,990,99 + 30,2%+ 30,2%+ 30,2%+ 30,2%Heads/haHeads/haHeads/haHeads/ha

5,4 million hectares of forest were saved between 2000 and 5,4 million hectares of forest were saved between 2000 and 5,4 million hectares of forest were saved between 2000 and 5,4 million hectares of forest were saved between 2000 and 2008 only because of evolution in productivity2008 only because of evolution in productivity2008 only because of evolution in productivity2008 only because of evolution in productivity

LAND USELAND USELAND USELAND USESOIL DISTRIBUTION (Million hectares)

853Total

Source: CONAB *Safra 2008/09

7,6%Area used for agriculture

Amazon Rain Forest 350 41%

Native and Cultivated Pastures 220 26%

Legal Reserve 55 6,4%

Annual crops 48* 5,6%

Permanent Crops 14 1,6%

Cities, lakes, roads, etc. 20 2,4%

Cultivated forests 5 0,6%

Other uses (indian reserves, etc) 51 6%

Avaliable area 90 11%

Brazilian slaughterhouses are selecting suppliers using strict criteria on sustainability.

If you buy Brazilian Beef, you can be sure that beef is not coming from:

• Ilegally deforastated areas• farmers involved on using forced labor

That information is provided by competent government departments and controled daily by slaughterhouses on every animal purchase.

Suppliers controlSuppliers controlSuppliers controlSuppliers control

R

Selected Brazilian Beef

ABIEC AssociatesABIEC AssociatesABIEC AssociatesABIEC Associates

Gracias!Gracias!Gracias!Gracias!

Fernando SampaioFernando SampaioFernando SampaioFernando SampaioSustainability Coordinator

fernando@abiec.com.brwww.abiec.com.br