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  • 1.Trading Partnershipsand the Canadian Cattle & Beef IndustryAMEG PRESENTATIONMexico City, April 28, 2010 Ted Haney President Canada Beef Export Federation

2. Canada Beef Export Federation Established in 1989 to expand and diversify export sales of Canadian beef in the global marketplace2 3. CBEF Membership represents approx. 95% of Canadas cattle and beef industry Head HeadMexicoHong KongShanghaiOfficeMexicoHong KongShanghai Office Office OfficeOfficeOfficeOffice Office Calgary,Calgary,Monterey, PRC Alberta Monterey, PRCAlbertaMexicoMexico CanadaCanadaJapan Office Japan OfficeTokyo, Japan Tokyo, JapanKorea Office Korea OfficeSeoul, Korea Seoul, KoreaCBEF Fast Facts Established in 1989 7 offices world wide Taiwan Office Taiwan Office 23 Export MembersTaipei, Taiwan Taipei, Taiwan 11 Affiliate Members 11 Associate Members 7 Government Members 3 4. Market development programs generate recognition and drive demand for Canadian beef4 5. Foster exporter-client relationships 5 6. Working in pursuit of market access 6 7. Current 2009-2010 fiscal year:Federation delivered over 500 individual export development projectsCanadian beef and veal exporters have attributed 41% of their total outside USA to Federation programs and services. 7 8. Canadian Beef & Veal Exports1990 2002 - tonnesUSAsia & MexicoOther 800,000700,000600,000500,000400,000300,000200,000100,000 01990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002Market share: 199020020.7%6.9%8 9. The Canadian Beef Advantage 9 9 10. Canadian beef industry- more than 80,000 farms and ranches raise beef cattle- 2008 income from cattle production - $6.6 billion 10 11. Canadian Beef Herd Genetics Canada has 100% Bos Taurus Genetics11 11 12. Canadian Beef Herd Genetics Bos Indicus influence in southern USA Studies completed in Australia and USA found meat from Bos Indicus less tender than from Bos Taurus Canada only has Bos Taurus 1212 13. Specializing in grain finishing13 13 14. Dynamic Processing SectorFocus on international competitiveness Positioned to serve our clients needs commodity boxed beef to valued-added, further processed productsProcessing capacity of 4.4 million head per year14 15. Confidence of international clients in Canadian beef is facilitating our steady return to the marketplace Canadas science-based food safety systems and measures considered among the best in the world15 16. Canadian Food Inspection Agency (CFIA) Empowered by Government of Canada under federal law to safeguard Canadas food supply and animal health Monitors all establishments exporting beef and beef product Authorized for administration and enforcement of Canadas Meat Inspection Act under federal law 16 17. Canadas Food Safety Systems Govern every aspect of production from importation of livestock genetics & safety systems at the farm to slaughter fabrication, packing and shipping 17 18. Hazard Analysis and Critical Control Point (HACCP) system Each establishment and each process of that individual establishment is under supervision of CFIA CFIA employs over 7,000 highly-trained professionals, including veterinarians, research scientists and inspectors, who operated from 600 field offices across Canada.18 19. Canadas food safety system includes disease control and prevention systems, which have been developed over many years in accordance with recommendations of the OIE.19 20. The Canadian Cattle Identification SystemPlays important role in containment and eradication of animal diseases through trace- back capabilitiesEnforced by federal law, requires all cattle permanently leaving herd of origin be tagged with RFID tagCanada first country in North America to have this system 20 21. The Canadian Cattle Identification System 2005 database enhanced to enable registration and documentation of cattle birth dates Provides effective and internationally-recognized Age-Verification Program 21 22. Canadas Beef Grading System Regulated by Federal law Canadian Beef Grading Agency accredited by CFIA to assign grades in accordance with national standards Canada A, Canada AA, Canada AAA and Prime grades reserved for high quality Canadian beef Each quality standard must be satisfied22 23. 23 24. 2006 Federation commissioned independent Beef Quality Perceptions Survey (BQPS) in key markets Determine importance of individual beef quality attributes to retail and food service leaders 734 participants in Japan, Korea, Taiwan, Hong Kong and Macao and Mexico were interviewed 24 25. 94% agreed:Grading standards designed to consistently deliver beef with white/amber fat, bright red meat color and firm muscle texture would provide their company with a quality advantage in the marketplaceTHESE ARE THE ATTRIBUTES OF HIGH QUALITY CANADIAN BEEF Source: CBEF BQPA, BIC BQPA 25 26. 2009 Domestic Production & Consumption Canadas beef and dairy cow herd: 5.6 million headBeef production: estimated 1.5 million tonnes Domestic marketRequires production from about 3 million cows approx. 1 million tonnes Canadian market not large enough to absorb beefproduction from our 6-million-head national cowherd26 27. Deriving full value from international markets Our success in creating commercially viableaccess not only to Asia and Mexico but toEurope, Russia, Middle East and South Americawill determine eventual size of our industrydifference between an industry maintaining 6 million cows and one maintaining 3 million cows27 28. Beef Export Premiums Commercially-viable access to major markets in Asia and Mexico has the ability to add $85 per head in value for beef derived from Under-30- Month (U30M) cattle over what can be generated in Canada. Further, these markets have the ability to add $100 per head in value over what can be generated for these same products in the US. 28 29. Increases in Fed Cattle Prices Expanded market access has direct impact on fed cattle prices Recent CANFAX study indicates: export market openings outside of US since2004 have increased Canadian fed cattleprices by $270 per headincreases in markets yet to open = $130 perhead Total value received & coming of expanded market access outside of US: $400 PER HEAD 29 30. 2015 Export Goal Forecasts800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 20002002 200420062008 2010 Markets Outside US Total Exports30 31. Lowered expectations for 2015: Our industry going to process 300,000 fewer tonnes of beef for export Meaning 750,000 fewer head of cattle will be processed in Canada These extra cattle will either be exported to US; or Canadas cow herd drops by 825,000 head 31 32. Canada is one of the top beef producing &exporting nations Top Beef Producing Nations 2008 Top Beef Exporting Nations 2008 USA22.6% EU 27 15.0% Brazil13.7%Brazil 22% 11.7% 20% China Australia Argentina5.8%Canada12% < Third Largest USA 11%India5.2% India 8%Australia 4.0% Argentina6% Mexico 3.1%New Zealand 7%Russia3.1% Uruguay5% Canada 2.4% < Tenth LargestEU 27 2%New Zealand1.2%Mexico 1% Rest of the World12.2%Rest of the World7% 0%5% 10% 15% 20% 25% 0%5%10%15% 20%25% % of Total Global Production % of Total Global Exports32 Source: GIRA 33. Canada is the largest grain-fed beef exporter inthe worldTop Grain- and Grass-Fed Beef Exporters 2008 2500 Grain-Fed ExportsGrass-Fed Exports2000 1,76215001,298 9401000 876 526464 440500 0 da*na a Ain lia aidli zS a aal t a l Uan trn reBtr e as Zg u sCwu rAA A eN Key marketsKey marketsNorth America, Japan & South Korea EU, Russia, S.E. Asia, Africa & Middle East Note: *Assumes 30% of Australian exports Are fed-beef. Source GIRA 33 34. Markets Open to Canadian Beef Pre-BSE product exported to over 100markets Currently 72 markets effectively opento Canadian beef34 35. Comprehensive Market Access 16 Markets Bahrain Barbados Bermuda Cuba Colombia European Union (27) Jordan Macau Mongolia New Zealand Panama Philippines Russia St Pierre et Miquelon Switzerland USA 35 36. Countries which Accept U30M Canadian Beef 19 Markets Antigua & Barbuda Russia Cayman Islands St. Kitts and Nevis Dominican Republic Saudi Arabia Egypt Taiwan El Salvador Thailand Guatemala Trinidad and Tobago Honduras Tunisia Lebanon United Arab Emirates Macedonia Vietnam Mexico 37. Markets that Accept only U21M Japan 37 38. Commercial Risk Markets No Formal Protocol 36 markets Albania Dutch Antilles Angola French Polynesia Anguilla Gabon Georgia Senegal Armenia Ghana Surinam Aruba Greenland St. Vincent & the Azerbaijan GrenadaGrenadines Br India Overseas Guinea TogoTer. Guyana Turkmenistan Br Virgin Islands Iceland Turks & Caicos Is. Comoros Islands Iran US Outlying Is. Cote dIvore Kazakhstan Uzbekistan Dominica Kyrgyzstan Moldova Mozambique Nigeria North Korea 38 39. Major Markets Closed to Canadian Beef South Korea Mainland China 39 40. CANADIAN BEEF & VEAL EXPORTS Asia & Mexico1990: 7,000 tonnes $24 million2002: 133,000 tonnes $500 million2009: 84,000 tonnes $322 million140,000120,000100,000 80,000 60,000 40,000 20,000 01990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010Asia & Mexico Estimated40 41. In closing .41


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