state corn executives mission usa poultry & egg export council what’s the big deal about...
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State Corn Executives MissionState Corn Executives Mission
USA Poultry & Egg Export USA Poultry & Egg Export CouncilCouncil
What’s the Big Deal About Poultry?What’s the Big Deal About Poultry?
April 28, 2005April 28, 2005
Warsaw, PolandWarsaw, Poland
State Corn Executives MissionState Corn Executives Mission
What is USAPEEC?What is USAPEEC?
• Non-Profit Trade Non-Profit Trade AssociationAssociation
• Founded in 1984Founded in 1984• About 200 member About 200 member
companies that account companies that account for more than 95% of all for more than 95% of all poultry & eggs exported poultry & eggs exported from U.S.from U.S.
State Corn Executives MissionState Corn Executives Mission
USAPEEC’s MissionUSAPEEC’s Mission
• To increase U.S. poultry To increase U.S. poultry & egg exports by & egg exports by opening, maintaining and opening, maintaining and developing markets developing markets around the world.around the world.
• To serve as the To serve as the industry’s voice on trade industry’s voice on trade policy issues.policy issues.
State Corn Executives MissionState Corn Executives Mission
USAPEEC Atlanta StaffUSAPEEC Atlanta Staff
Ernesto Ernesto BaronBaron
Brent Brent DanielsonDanielson
Dr. Mark Dr. Mark LobsteinLobstein
Kay PhielKay Phiel
Jennifer Jennifer GeckGeck
Shep TullerShep Tuller
Jean Jean MurphyMurphy Greg TylerGreg Tyler
Toby MooreToby Moore
Nanci JohnsNanci Johns
Barbara Barbara MooreMoore
Jim SumnerJim Sumner
State Corn Executives MissionState Corn Executives Mission
Resources of USAPEEC’s foreign offices
• On location On location market & market & economic economic intelligenceintelligence
• Relation Relation building with building with potential potential importersimporters
• Educational & Educational & promotional promotional activitiesactivities
• Trade Shows, Trade Shows, buying buying missions, and missions, and other activitiesother activities
State Corn Executives MissionState Corn Executives Mission
USAPEEC MembersUSAPEEC Members
ProcessorsProcessors5252Trading CompaniesTrading Companies7979Commodity GroupsCommodity Groups1111Associate Members Associate Members 6969TotalTotal 211211
State Corn Executives MissionState Corn Executives Mission
FMD17%
Industry32%
Commodity17%
MAP34%
FMD
MAP
Commodity
Industry
USAPEEC’s Funding: Total budget $7.5 millionUSAPEEC’s Funding: Total budget $7.5 million
State Corn Executives MissionState Corn Executives Mission
Non-Government FundingNon-Government Funding
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
$2,000,000
2002 2003 2004 2005
Increase of Increase of 45.3%45.3%
State Corn Executives MissionState Corn Executives Mission
Don’t the big Don’t the big producers like Tyson producers like Tyson control USAPEEC?control USAPEEC?
State Corn Executives MissionState Corn Executives Mission
•Board of Directors is structured on a one-Board of Directors is structured on a one-company, one-vote basis, regardless of company, one-vote basis, regardless of dues.dues.
•Board has up to 25 members from Board has up to 25 members from processors, trading companies, and processors, trading companies, and associate members.associate members.
•Elected to 3-year termsElected to 3-year terms
•Commodities get a seat on the board Commodities get a seat on the board for 1-year termsfor 1-year terms
•Board members are nominated by a Board members are nominated by a nominating committee, which is made up nominating committee, which is made up of members from the Executive of members from the Executive Committee.Committee.
•Executive Committee has 8 members.Executive Committee has 8 members.
All For One and One for AllAll For One and One for All
State Corn Executives MissionState Corn Executives Mission
•Summary of the U.S. poultry industrySummary of the U.S. poultry industry
•Volume of grains used by the U.S. Volume of grains used by the U.S. poultry industrypoultry industry
•Effects of poultry trade on grain Effects of poultry trade on grain farmersfarmers
•Summary of the Russian marketSummary of the Russian market
•Value of your supportValue of your support
•Questions?Questions?
Today’s Hot TopicsToday’s Hot Topics
State Corn Executives MissionState Corn Executives Mission
Total poultry meat Total poultry meat production = production = estimated 41.2 estimated 41.2 billion pounds in billion pounds in 2005. (18.7 million 2005. (18.7 million metric tons)metric tons)
85% broiler meat 85% broiler meat 14% turkey meat 14% turkey meat 1% other chicken1% other chicken
State Corn Executives MissionState Corn Executives Mission
Why doesn’t the Why doesn’t the poultry industry have a poultry industry have a check-off?check-off?
State Corn Executives MissionState Corn Executives Mission
•Research, promotion, and education are Research, promotion, and education are very important to our industry.very important to our industry.
•Industry-supported organizations:Industry-supported organizations:
•US Poultry & Egg AssociationUS Poultry & Egg Association
•Spends millions each year on research Spends millions each year on research projects at universitiesprojects at universities
•Organizes the International Poultry Expo Organizes the International Poultry Expo every January every January
•National Chicken Council & National Turkey National Chicken Council & National Turkey FederationFederation
•Promote consumptionPromote consumption
•Engage in lobbyingEngage in lobbying
Poultry: Please don’t let me be MisunderstoodPoultry: Please don’t let me be Misunderstood
State Corn Executives MissionState Corn Executives Mission
•Vertically integratedVertically integrated
•Single company involved in every stage of Single company involved in every stage of production, processing, and marketing.production, processing, and marketing.
•Allows industry to take advantage of new Allows industry to take advantage of new technologies to be more efficient, responsive, technologies to be more efficient, responsive, and profitable.and profitable.
Poultry: Please don’t let me be MisunderstoodPoultry: Please don’t let me be Misunderstood
State Corn Executives MissionState Corn Executives Mission
Broiler ProductionBroiler ProductionGrower supplies:Grower supplies:
–Growout houseGrowout house
–LaborLabor
Processor Processor supplies:supplies:
–ChicksChicks
–FeedFeed
–MedicinesMedicines
State Corn Executives MissionState Corn Executives Mission
•Poultry companies prefer to do their own Poultry companies prefer to do their own advertising.advertising.
•They spend millions advertising their brands They spend millions advertising their brands every year.every year.
•They know that competition in export They know that competition in export markets is between themselves NOT poultry markets is between themselves NOT poultry and beef.and beef.
•USAPEEC doesn’t engage in branding USAPEEC doesn’t engage in branding promotions.promotions.
Poultry: Please don’t let me be MisunderstoodPoultry: Please don’t let me be Misunderstood
State Corn Executives MissionState Corn Executives Mission
Isn’t poultry really just Isn’t poultry really just a “Southern” thing?a “Southern” thing?
State Corn Executives MissionState Corn Executives Mission
Chicken Production, 2003Chicken Production, 2003(In Million lbs)(In Million lbs)
0-.5 mil .5-2 mil 2 mil+
Source: NASSSource: NASS
State Corn Executives MissionState Corn Executives Mission
Turkey Production, 2003Turkey Production, 2003(In Million lbs)(In Million lbs)
0-50 50-300 300+
Source: NASSSource: NASS
State Corn Executives MissionState Corn Executives Mission
Egg Production, 2003Egg Production, 2003
0-$75 $75-200 $200+
(Value in Million US$)(Value in Million US$)
Source: NASSSource: NASS
State Corn Executives MissionState Corn Executives Mission
Last year the U.S. Last year the U.S. broiler and turkey broiler and turkey industries spent industries spent $7.9 $7.9 BillionBillion on corn and on corn and soybean meal.soybean meal.
Believe It or Believe It or Not…Not…
Source: National Chicken CouncilSource: National Chicken Council
State Corn Executives MissionState Corn Executives Mission
Soybean Production, 2000Soybean Production, 2000(In million bushels produced)(In million bushels produced)
0-50 50-100 100+
Source: USB Soy StatsSource: USB Soy Stats
State Corn Executives MissionState Corn Executives Mission
Corn Production, 2003Corn Production, 2003(In million bushels produced)(In million bushels produced)
0-100 100-200 200+
Source: NCGASource: NCGA
State Corn Executives MissionState Corn Executives Mission
Since the Midwest Since the Midwest produces a wealth of produces a wealth of corn and soybeans, corn and soybeans, these states are vital these states are vital to the poultry to the poultry industry’s success.industry’s success.
State Corn Executives MissionState Corn Executives Mission
Does poultry really Does poultry really consume that much consume that much corn and soybeans?corn and soybeans?
State Corn Executives MissionState Corn Executives Mission
Source: NCGASource: NCGA
U.S. Corn Use by LivestockU.S. Corn Use by Livestock5.2 Billion Corn Bushels Consumed Annually by 5.2 Billion Corn Bushels Consumed Annually by
LivestockLivestock
Beef30%
Poultry28%
Pork23%
Dairy14%
Other5%
State Corn Executives MissionState Corn Executives Mission
Annual Annual production of production of U.S. poultry U.S. poultry consumes consumes
more than 1.3 more than 1.3 billion bushels billion bushels
of corn.of corn.Source: National Chicken CouncilSource: National Chicken Council
State Corn Executives MissionState Corn Executives Mission
Poultry consume about Poultry consume about 15% of the U.S. corn and 15% of the U.S. corn and
soybean cropssoybean crops
State Corn Executives MissionState Corn Executives Mission
Source: Soy Source: Soy Stats, USBStats, USB
How Important is Your #1 How Important is Your #1 Customer?Customer?
U.S. Soybean Meal Use by LivestockU.S. Soybean Meal Use by Livestock
Pet Food2%
Dairy6%
Poultry and Eggs53%
Other3%
Beef12%
Pork24%
State Corn Executives MissionState Corn Executives Mission
1 out of every 1 out of every 6 bushels of 6 bushels of soybeans is soybeans is
consumed by consumed by the U.S. the U.S. poultry poultry
industry.industry.
Source: Soy Stats, USBSource: Soy Stats, USB
State Corn Executives MissionState Corn Executives Mission
Feed/Residual58%
Export19%
Other8%
Ethanol9%
HFCS6%
U.S. Corn U.S. Corn UsageUsage
Source: NCGASource: NCGA
State Corn Executives MissionState Corn Executives Mission
Doesn’t it seem like Doesn’t it seem like poultry is so efficient poultry is so efficient in feed conversion that in feed conversion that it barely uses any it barely uses any corn?corn?
State Corn Executives MissionState Corn Executives Mission
•Grow-out is only 4-6 weeks.Grow-out is only 4-6 weeks.
•Chicken consumption is higher Chicken consumption is higher than all other meats.than all other meats.
•A more efficient poultry industry A more efficient poultry industry helps you too.helps you too.
•Poultry becomes cheaper for Poultry becomes cheaper for consumers, consumption rises, consumers, consumption rises, and production goes upand production goes up
Did You Consider…Did You Consider…
State Corn Executives MissionState Corn Executives Mission
00.5
11.5
22.5
33.5
44.5
5
Feed Conversions: 1925-2005Feed Conversions: 1925-2005(Pounds of feed to 1 lb of broiler, (Pounds of feed to 1 lb of broiler,
liveweight)liveweight)
Source: National Chicken CouncilSource: National Chicken Council
State Corn Executives MissionState Corn Executives Mission
Chicken is the FutureChicken is the Future
State Corn Executives MissionState Corn Executives Mission
Total U.S. Broiler ProductionTotal U.S. Broiler Production
0
5
10
15
20
25
30
35
40
1955 1965 1975 1985 1995 1997 1999 2001 2003 2005p
Billion Pounds
p=projection
State Corn Executives MissionState Corn Executives Mission
U.S. Broiler ExportsU.S. Broiler ExportsIn Corn & Soybean Million Bushel EquivalentsIn Corn & Soybean Million Bushel Equivalents
Source: USDA/FAS, NCCSource: USDA/FAS, NCC
020
406080
100
120140160180
200
soybean
corn
State Corn Executives MissionState Corn Executives Mission
U.S. Broiler Export MarketsU.S. Broiler Export Markets20042004
Primary MarketsPrimary MarketsRussiaRussia ($492 million, 28% of U.S. ($492 million, 28% of U.S.
Exports)Exports)CanadaCanada ($257 million, 15% of U.S. Exports)($257 million, 15% of U.S. Exports)MexicoMexico ($122 million, 7% of U.S. Exports)($122 million, 7% of U.S. Exports)UkraineUkraine ($85 million, 5% of U.S. Exports)($85 million, 5% of U.S. Exports)Hong KongHong Kong ($73 million, 4% of U.S. Exports)($73 million, 4% of U.S. Exports)TurkeyTurkey ($64 million, 4% of U.S. Exports)($64 million, 4% of U.S. Exports)CubaCuba ($57 million, 3% of U.S. Exports)($57 million, 3% of U.S. Exports)
State Corn Executives MissionState Corn Executives Mission
SourceSource: USDA/FAS, NTFUSDA/FAS, NTF
U.S. Turkey ExportsU.S. Turkey ExportsIn Corn & Soybean Million Bushel EquivalentsIn Corn & Soybean Million Bushel Equivalents
0
5
10
15
20
25
30
soybean
corn
State Corn Executives MissionState Corn Executives Mission
It Takes 3.5 lbs. of Feed to Produce 1 It Takes 3.5 lbs. of Feed to Produce 1 Dozen Shell EggsDozen Shell Eggs
Soybeans, including vitamins
34%
Corn66%
Corn
Soybeansincluding vitamins
Source: United Egg ProducersSource: United Egg Producers
State Corn Executives MissionState Corn Executives Mission
Don’ t the poultry and Don’ t the poultry and beef industries beef industries compete against each compete against each other?other?
State Corn Executives MissionState Corn Executives Mission
•Poultry is not in direct competition with Poultry is not in direct competition with other meats.other meats.
•Poultry actually competes more with Poultry actually competes more with other poultry products in the export other poultry products in the export markets.markets.
•Product taken off the domestic market Product taken off the domestic market benefits all US producers of meat (white benefits all US producers of meat (white and red).and red).
•Without int’l markets, more product Without int’l markets, more product stays on the US market.stays on the US market.
•Causes prices to be lower for all meats.Causes prices to be lower for all meats.
Poultry & Beef: Friends or Foes?Poultry & Beef: Friends or Foes?
State Corn Executives MissionState Corn Executives Mission
Source: National Chicken CouncilSource: National Chicken Council
•Russian Poultry Ban caused prices for all Russian Poultry Ban caused prices for all meats to go down.meats to go down.
•BSE crisis caused wholesale chicken BSE crisis caused wholesale chicken prices to depress by $.01 per lb.prices to depress by $.01 per lb.
•Caused our industry to lose $300-400 Caused our industry to lose $300-400 million in revenuemillion in revenue
Tumbling, Tumbling Down…Tumbling, Tumbling Down…
State Corn Executives MissionState Corn Executives Mission
•Food safety campaigns for meats Food safety campaigns for meats compliment each othercompliment each other
•Helps counteract misinformation in Helps counteract misinformation in foreign markets like Japanforeign markets like Japan
•St. Louis ProjectSt. Louis Project
•Grains, oilseeds, poultry and beef are Grains, oilseeds, poultry and beef are working togetherworking together
•Deli seminars in the Caribbean and Deli seminars in the Caribbean and Central AmericaCentral America
•Joint promotion for beef, pork, poultry, Joint promotion for beef, pork, poultry, and dairy industriesand dairy industries
Strength in NumbersStrength in Numbers
State Corn Executives MissionState Corn Executives Mission
Is poultry trade really Is poultry trade really that important?that important?
State Corn Executives MissionState Corn Executives Mission
•In 2004 about 140 million corn In 2004 about 140 million corn bushels and 40 million soybean bushels and 40 million soybean bushels were exported through bushels were exported through poultrypoultry
•Poultry exports to RussiaPoultry exports to Russia
•38 million corn bushels38 million corn bushels
•11 million soybean bushels11 million soybean bushels
•Poultry exports to MexicoPoultry exports to Mexico
•17 million corn bushels17 million corn bushels
•5 million soybean bushels5 million soybean bushels
Did You Consider…Did You Consider…
State Corn Executives MissionState Corn Executives Mission
•Without int’l markets, more product Without int’l markets, more product stays in the US.stays in the US.
•That’s a lot of dark meat.That’s a lot of dark meat.
•If China won’t take our chicken feet or If China won’t take our chicken feet or paws…paws…
•Lose of millions from a closed marketLose of millions from a closed market
•Will be forced to create a demand in Will be forced to create a demand in the USthe US
Beer & Wings or Beer & Paws?Beer & Wings or Beer & Paws?
State Corn Executives MissionState Corn Executives Mission
It’s What’s For Dinner…It’s What’s For Dinner…
State Corn Executives MissionState Corn Executives Mission
2005 Projected World Broiler 2005 Projected World Broiler ProductionProduction
Dominated by Five PlayersDominated by Five Players
0
2
4
6
8
10
12
14
16
U.S. China Brazil EU-25 Mexico Rest ofthe World
Million Metric Tons
State Corn Executives MissionState Corn Executives Mission
Isn’t BSE really the Isn’t BSE really the only disease outbreak only disease outbreak that can hurt grain that can hurt grain farmers?farmers?
State Corn Executives MissionState Corn Executives Mission
•BSE hurt poultry too!BSE hurt poultry too!
•Newcastle Disease (END) in California Newcastle Disease (END) in California and Western USand Western US
•NE corn is going to the California NE corn is going to the California poultry industrypoultry industry
•First outbreak occurred Oct. 2002First outbreak occurred Oct. 2002
•11 months from discovery to 11 months from discovery to eradicationeradication
•4 countries imposed nationwide bans 4 countries imposed nationwide bans and all others imposed regionalized and all others imposed regionalized bansbans
•Over 3 million birds depopulatedOver 3 million birds depopulated
•$262 million in estimated losses$262 million in estimated losses
What You Don’t Know Can Hurt YouWhat You Don’t Know Can Hurt You
State Corn Executives MissionState Corn Executives Mission
•Avian InfluenzaAvian Influenza
•Over 50 countries imposed bans on Over 50 countries imposed bans on US poultryUS poultry
•Impact of these unjustifiable bans is Impact of these unjustifiable bans is worst in memoryworst in memory
•We stand to lose We stand to lose $10 Billion$10 Billion due to AI due to AI
•China imposed a 9-month nationwide China imposed a 9-month nationwide banban
•Brazil and Argentina were able to enter Brazil and Argentina were able to enter the marketthe market
What You Don’t Know Can Hurt You, cont.What You Don’t Know Can Hurt You, cont.
State Corn Executives MissionState Corn Executives Mission
Russia may be the top Russia may be the top market for US poultry, market for US poultry, but are there still but are there still opportunities for opportunities for growth?growth?
State Corn Executives MissionState Corn Executives Mission
Should the corn Should the corn industry be active in industry be active in organizations like organizations like USAPEEC?USAPEEC?
State Corn Executives MissionState Corn Executives Mission
What Can USAPEEC Do for Grain What Can USAPEEC Do for Grain Farmers?Farmers?
• Provide information on trade Provide information on trade issuesissues
• Your support could start a new Your support could start a new market or maintain an existing onemarket or maintain an existing one
• Attend USAPEEC Winter, Staff, and Attend USAPEEC Winter, Staff, and Annual MeetingsAnnual Meetings
• Receive a weekly newsletter on Receive a weekly newsletter on trade analysistrade analysis
• Resources of USAPEEC foreign Resources of USAPEEC foreign officesoffices
• Receive copies of quarterly reports Receive copies of quarterly reports concerning all commodity funded concerning all commodity funded promotionspromotions
State Corn Executives MissionState Corn Executives Mission
USAPEEC: Your Source for USAPEEC: Your Source for InformationInformation
• Frequent, even daily e-Frequent, even daily e-mail updatesmail updates
• Monitor all issues Monitor all issues affecting poultry tradeaffecting poultry trade
• Keep pressure on both Keep pressure on both Washington and foreign Washington and foreign governmentsgovernments
• Conduit for getting U.S. Conduit for getting U.S. industry info to industry info to American negotiatorsAmerican negotiators
State Corn Executives MissionState Corn Executives Mission
•Get to know our staff and membersGet to know our staff and members
•Visit our newly expanded office in Stone Visit our newly expanded office in Stone MountainMountain
•Learn what we stand forLearn what we stand for
•Learn what you can/can’t impactLearn what you can/can’t impact
•Visit a poultry plantVisit a poultry plant
•Attend more of our meetingsAttend more of our meetings
•Be involved on our Trade Policy Task Be involved on our Trade Policy Task Force or Market Development CommitteeForce or Market Development Committee
Get To Know Us BetterGet To Know Us Better
State Corn Executives MissionState Corn Executives Mission
Let USAPEEC a”maize” Let USAPEEC a”maize” you!you!
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